| Yahoo! to test Google's
AdSense
10 April, 2008
By Vanessa Ho
Yahoo! has announced that it will begin a limited test
of Google Inc.'s AdSense for Search service, which will
deliver relevant Google ads alongside Yahoo!'s own search
results in order to explore strategic alternatives to maximize
stockholder value.
The test will apply only to traffic from yahoo.com in the
U.S. and will not include Yahoo's extended network of affiliate
or premium publisher partners. The test is expected to last
up to two weeks and will be limited to no more than three
per cent of Yahoo! search queries.
This partnership also includes the exploration of potential
commercial business arrangements but Yahoo! stressed that
the testing does not necessarily mean that the company will
join the AdSense for Search program or that any further
commercial relationship with Google will result.
Warren Shiau, senior associate and lead analyst in IT research
at the Strategic Counsel, said that the Yahoo! and Google
partnership was a smart and strategic move on Yahoo!'s behalf
in trying to get a better deal from Microsoft's bid to acquire
them.
Two months ago Microsoft made an unsolicited bid for Yahoo!
for $44.6 billion.
"Yahoo! wants a better price from them," said
Shiau. "They don't want it at the price Microsoft is
offering and everything they are doing is intended to put
them in a situation where Microsoft has to offer more."
He added that if Yahoo and Google form a strong alliance,
it is something that would strategically force or motivate
Microsoft to increase their offer.
"It is sending a message to Microsoft that says 'we
are not beyond doing something with Google and if you want
us, you better stump up more money for us'."
Even if Microsoft doesn't come up with a better deal, the
partnership with Google will be good to Yahoo's bottom line
bringing them additional revenue, said Shiau.
But Thursday, news hit that News Corporation is in talks
with Microsoft about joining forces in its contested bid
for Yahoo. The combination would join Yahoo, Microsofts
MSN and News Corporation's MySpace.
In addition, there is also news of Yahoo! holding discussions
with Time Warner's AOL to form some kind of partnership.
Shiau believed that news of all these companies interested
in Yahoo! might make the company's board of directors play
a wait-and-see approach to review who has the better offer.
But one thing for sure is that the asking price for Yahoo!
is most likely going to go up.
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