The Yahoo-Google (GOOG) search partnership test was a brilliant move by Yahoo (YHOO) to extract a few more dollars out of Microsoft (MSFT). Which it did. Which Yahoo sniffed at.
And now that the original raison d’etre for the Google partnership has disappeared, Yahoo shareholders are banking on another one, which is the ONE BILLION DOLLARS in incremental cash flow (not) that investors expect to immediately receive from a formal Yahoo-Google search deal.
Not so fast, says the WSJ. Now that Google has thumbed its nose at Redmond yet again by breaking up the Yahoo deal, Google is apparently having second thoughts:
Google executives are now divided over whether to pursue a search-advertising deal with Yahoo, according to a person familiar with the matter.
ONE BILLION DOLLARS. Poof.
Maybe this leak is just an elaborate scheme by Messrs Yang and Schmidt to lure Steve Ballmer back to the table? (Yahoo and Google having been initially in cahoots to drive him away). Unlikely.
More likely, now that its see-red hatred of Microsoft has dissipated in the wake of another victory, Google is now remembering that having 85% market share in a $20 billion global market probably isn’t a winning strategy for keeping regulators happy. Far better to keep one foot on Yahoo’s throat and the other on the defibrillator paddles, so you can always say, “See, we have a real live competitor here! It moved an hour ago. We swear!”
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