Wednesday, February 4, 2009

Yahoo, Google, AOL and Microsoft: Dance continues

It is now four companies - Yahoo, Google, AOL and Microsoft - continues «ritual dances», began the spring with Microsoft trying to buy the Internet Corporation of Yahoo. That attempt failed (Yahoo has made saving alliance with Google), but the nerves members destroying a lot of events. Meanwhile, the race around the deal is still in progress.

Yahoo Google AOL MicrosoftI'll start with the fact that Google has abandoned the transaction on the partnership with Yahoo in the market of internet advertising. The official blog search giant says that the review of conditions of transactions by United States competition authorities has been held for four months, but regulators are still many questions remained. According to Google, the Department of Justice antitrust investigation into the U.S. could negatively affect «the relationship with the company's valuable partners». In early October, Yahoo and Google have postponed the conclusion of transactions for a month due to negotiations with the Ministry of Justice. Originally the company planned to sign the final contract in October 2008 In addition, Google and Yahoo announced their intention to revise the terms of the transaction on the exchange of online advertising so as to obtain the approval of antitrust authorities. In particular, the term of the contract was to be reduced to two years (from the original ten). The emerging deal between Yahoo and Google became known on 12 June this year. Under the agreement, Yahoo's search results should have been placed contextual ads Google. This contract extends only to the USA and Canada. If the transaction was approved by the antimonopolschikov, Yahoo would raise the income of at least $ 800 million a year. However, preparing a contract has caused concerns among advertising companies, which found that Google and Yahoo could monopolize the market and improve pricing for Internet advertising. Indeed, in August, the share of Yahoo and Google accounted for about 80% of the market for online search. The transaction involved the use of advertising technology to Yahoo and Google AdSense advertising content from Google when displaying search results in Yahoo.

Meanwhile, the positions of the protagonists changed 180 degrees. Director Yahoo Jerry Yang, it turns out, is ready to revisit the deal with Microsoft. At the Web 2.0 Summit Young himself suggested that Microsoft buy Yahoo. Quote: «Buying Yahoo - the most advantageous option for Microsoft». Jerry Yang also said Yahoo was prepared to consider any options for cooperation, not only selling the company entirely. For example, he admits that could be sold only to the search business Yahoo. I recall that earlier this year, Microsoft offered to Yahoo for more than $ 40 billion, estimating the per share in the $ 31 search engine, which was then at 62% above the stock price. Microsoft later increased the offer to $ 33 per share, but Yahoo management found it undervalued the company. At the Microsoft proposal to buy Yahoo search business leaders also rejected the company. However, now the head of Microsoft, Steve Balmer said that Microsoft is not planning to return to negotiations on a full or partial purchase of Yahoo. Balmer said that Microsoft made the offer twice about buying Yahoo. In addition, Microsoft has offered Yahoo to sell only its search business. But the leadership of the Internet company has responded to these proposals rejected. New Microsoft search engine offers do not intend to. However, Microsoft added a chapter that does not refuse to cooperate with Yahoo. He believes that Microsoft and Yahoo could become partners in the market of Internet search. What exactly is meant by a partnership, Balmer, however, did not specify.

Meanwhile, Yahoo and AOL (the Internet division of Time Warner) for several weeks in negotiations about the merger and the joint business. The goal should be the reduction of costs and strengthening market position of each company. The final decision regarding the effectiveness of the merger will be decided shortly. For the first time the possibility of such a transaction was reported several weeks ago, when Yahoo reported a reduction of the state, and one way to optimize the company called its merger with AOL. Then the company looked for alternatives and not on a transaction with Microsoft. The point is that with the beginning of the financial crisis, the value of Yahoo shares dropped to a mark of $ 12,65. This decline was the biggest in the history of the company over the past five years, and for the entire market hayteka: Yahoo stock is cheaper most. During the negotiations on the merger being discussed actively integrating services and advertising business in the AOL business Yahoo. At this time, already know that Yahoo and AOL combine their web-projects, and the owner of AOL - a company Time Warner - will receive a share in the new company. The truth is, this time is more than just fear. For example, whether to retain two postal service, or would be better to merge them into one? And how will interact advertising service companies? Interestingly, while the deal under discussion at the level of rumor: the representatives of the companies did not formally comment on the deal between Yahoo and AOL, although an anonymous source reported that the deal is almost complete. Such secrecy is linked including the fact that in today's environment companies behave very carefully so as not to cause a greater drop the value of their shares.

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