After killing all hopes of getting a deal done with Microsoft, Yahoo has quickly jumped up to up a non-exclusive deal with Google that would give access to Yahoo to their AdSense for search and AdSense for content advertising.
This means that the search advertising for Yahoo will now be a mix of ads from Google’s AdSense and various other third parties along with its existing Panama system. All this as thought of by Yahoo will bring up to $800 million additional revenues a year with an immediate revenue of $250 – $450 million in the first twelve months. Despite all the colours that are filling up Yahoo’s cash canvas; it still; cannot achieve a staggering $31 per share that it could have had by giving a green go the deal with Microsoft.
The agreement is said to enhance Yahoo’s potential to achieve its target of growing its operating cash flow at large along with providing an open opportunity to invest in ongoing initiatives and a complete freedom to use its Panama paid search results (all this might just have been at a spindle had it signed a deal with Microsoft). President Sue Decker added;
‘This agreement provides a source of funds to both deliver financial value to stockholders from search monetization and to invest in our broader strategy to transform display advertising and advance our starting point objectives with users.’
Yahoo’s CEO and co-founder, Jerry Yang, who has been the target of Icahn-ic fire, added that the convergence represents an important step towards their open strategy and lets Yahoo, build up on the progress it has made so far.However I found something quite misplaced in President Sue Decker’s statement;
‘It enhances competition by promoting our ability to compete in the market place where we are especially well positioned: in the convergence of search and display.’
-Sounds pretty contradictory from the shareholders perspective as the idea to remain independent has wiped off $12 billion in value and concretes Yahoo’s position to remain Number 2 with a staggering difference.
The modus turns out that the clouds of confusion that Yahoo has had the entire world in now side away with the ouster of Microsoft from the deal/no deal picture.