Google May Scrap Yahoo Deal

JagsLive points out a Reuters story which suggests that Google may walk away from its deal with Yahoo instead of accepting possible antitrust limitations from the government. The ongoing investigation of the deal by the Department of Justice has caused new concerns to be raised over whether the two companies have adequately addressed issues such as privacy and competition. From Reuters: "'Are they more serious about walking away? Yes. Have they decided? I'm not sure,' one source told Reuters on Friday. 'Yahoo wants the deal, and they're willing to have Google sign anything at the Justice Department to have them do it.' ... Part of the impetus of Google's walking away could be Yahoo's talks with Time Warner Inc about buying the content and advertising operations of its AOL unit. Google initially struck the deal with Yahoo as a way to fend off Microsoft Corp's unsolicited bid. Yahoo and AOL are conducting due diligence to see what a combined company would look like."

Comments

Yahhooo!

[Anonymous Coward]

As someone at Microsoft yells Yaaahhhhoooo!!!

Re:Yahhooo!

[MrNaz]

While someone at Google throws a chair. How the tables have turned. Or chairs, as the case may be.

Re:Yahhooo!

[Anonymous Coward]

So wouldn't Microsoft be subject to the same antitrust limitations as well if they decide to make a play for Yahoo again? I would think it would have even more limitations since Microsoft has a dominate presence in more markets than Google does. Whatever concerns the DOJ has over a Google-Yahoo deal should be doubled for a Microsoft-Yahoo deal.

Re:Yahhooo!

[L4m3rthanyou]

Uh, not really. Microsoft and Yahoo are in separate markets, for the most part. Some of their stuff overlaps, but a combined MS and Yahoo would not have a massive marketshare dominance over any one thing (aside from the OS market, maybe, but M$ already has that).

It's very different from Google purchasing Yahoo, because those two companies offer many of the same services, and would have a huge portion of web searches if they combined.

Re:Yahhooo!

[mabhatter654]

since when does the DOJ care about privacy and competition? I guess they don't have enough on Google to blackmail their execs into a secret "backroom" like they did for Quest and the other telcos (you'll note they've allowed ATT/Version former monopoly to buy whatever they want for a decade).

I'd agree, again for privacy and competition, why does Microsoft need to buy another web search engine. They have their own and they have Windows.. that's not good to have 85%+ of the computers running 1 OS going to 1 search engine...

It's sad..

[dalurka]

It's sad that yahoo has to be sold at all.. I rarely use yahoo but it would be less than optimal to remove it from the competition. If it were removed there would only be MS and Google left as major search and advertising I think, please correct me if I'm wrong here.
But I'd like it more if Google was the future owner of yahoo.. Microsoft is large enough in my opinion.

Re:It's sad..

[MrNaz]

Google actually has a stronger foothold in its primary market than Microsoft does in its, at the moment. Google is not embattled by free alternatives to its main product line that are catching up rapidly.

If you ask me, Google is the company that we have the most to fear from at the moment, given that they are the biggest pushers (quietly) of "cloud" computing, which is essentially an effort to remove control from you of the computer on which you work.

You can be as much of a fanboy as you like, but accept it or not, Google is a business which has a very large interest in turning you into a controllable revenue asset.

Re:It's sad..

[dalurka]

I think you misinterpreted my post...
I know fully well that Google is the largest actor on the online Ad market. And their other free "web" based tools are being pushed at unsuspecting consumers. Which I believe is bad mostly from a privacy standpoint, therefore I don't use any of their offerings for private communication and such.
Also I don't like how the term "cloud" is gaining momentum. What is wrong with the good old Web or the Web 2.0? (which I also found silly)...

Re:It's sad..

[Anonymous Coward]

I think you misinterpreted my post...

He's still awake and drunk from last night's Hollow'een party. Give him a break.

Re:It's sad..

[owlnation]

I don't know if it's sad. Yahoo is a dead company. Its death is entirely of its own making -- corporate greed over user experience. For me their death is well deserved, can't happen fast enough, and I will revel in schadenfreude.

That said. Your point is valid. There is nothing like enough competition in search. I find that search has never really met my expectations, and that it is doing so less and less. There has to be new ideas and new players in this market. Google is the only show in town, and Google is well and truly gamed.

However, innovation in search is not going to come from Google, Yahoo or Microsoft. Corporations are far too bureaucratic, conservative, and slow to develop new ideas. If you work in a corporation it can take you months to get approval to even start work on a new idea. No, It is going to come in the same way it happened for Google. Two guys working in their garage, with a damn good idea. These guys can pick it up and run with it, much faster than any corporation ever could.

The sad thing is that with the current credit clusterfuck there may not be funding for innovators. This is good for Google, but it's really bad for everyone else. Google seriously needs competition, it would even be good for them too, they are getting stale and a shaking up would do them a lot of good. There's been no significant innovation in search for 10 years. This is bad for everyone.

Re:It's sad..

[univgeek]

I wish my dead company had a P/E of ~19 and make consistent profits.

http://finance.google.com/finance?client=ob&q=NASDAQ:YHOO

Re:It's sad..

[dalurka]

However, innovation in search is not going to come from Google, Yahoo or Microsoft. Corporations are far too bureaucratic, conservative, and slow to develop new ideas. If you work in a corporation it can take you months to get approval to even start work on a new idea. No, It is going to come in the same way it happened for Google. Two guys working in their garage, with a damn good idea. These guys can pick it up and run with it, much faster than any corporation ever could.

Google actually lets its developers use 20% of their time to work on own projects...which is an emulation of the twho guys in a garage I think...It leads to innovation and many of the best google services were born this way.

Re:It's sad..

[ionix5891]

I really feel sad for their employees

I love their support for open source projects such as YUI and PHP :(

My sites rely so heavikl

Re:It's sad..

[Moebius Loop]

Google actually lets its developers use 20% of their time to work on own projects...which is an emulation of the twho guys in a garage I think...It leads to innovation and many of the best google services were born this way.

True, but by most reports, as the company has grown, internally it's been more and more difficult to get that 20% time. It's kind of the dark secret of the HR department that although they pitch 20% time pretty heavily to applicants, the reality is not the same.

I get the impression the ones that do are either pet projects of higher-ups, or those who happen to be ahead in the internal corpo-political geek battles.

Furthermore, it I've read that search is (not surprisingly) the most difficult team to get involved with and actually innovate with. There seems to be a general attitude of "don't meddle with the thing thats paying for all these crazy side projects."

Re:It's sad..

[owlnation]

Even if it's the case that 20% of their time can be spent on side projects, that's still not really a mirror of the 2 guys in their garage model.

Obviously those 2 guys can spend 100% of their work time on their idea (as well as much of their free time most likely). They should obviously do documentation and will wear a lot of hats, but they don't report to anyone and don't spend half their week in meetings, reports or preparing powerpoint presentations probably. I assume Google, like all corporations, requires some sort of reporting. So that 20% is in reality 15% on developing, and 5% (at least) on reports, BRD's, evaluations, project documentation etc. Plus, they will be getting lots of distractions from the job they do the other 80% of the time.

Secondly, if the 20% of their time model worked, why is their search engine so gamed? And why has there been no significant progress in search? They even have developers (I assume) working 100% of their time on search. The results speak for themselves, and HR promises almost never do.

Competition is the only answer. They need it, they are distracted from their core search business into apps, and whatever the "cloud" is. They don't have any burning need to improve since they are making lots of money from search, as there is no serious competition. Much, like Yahoo did before them. While Google has made much more of an effort to include user experience than Yahoo ever did, it still falls short of many user's expectations. Today's Yahoo could still be tomorrow's Google. For Google, Yahoo should stand as a warning from history.

Re:It's sad..

[ronocdh]

Google actually has a stronger foothold in its primary market than Microsoft does in its, at the moment.

I read this as saying that Microsoft's marketshare in the OS market is less than Google's in the search market. This would definitely be false.

Re:It's sad..

[Anonymous Coward]

True, but by most reports, as the company has grown, internally it's been more and more difficult to get that 20% time. It's kind of the dark secret of the HR department that although they pitch 20% time pretty heavily to applicants, the reality is not the same.

This is not really true. Anyone in engineering can take their 20% time, and if their manager gets in their way this can be brought to the attention of the right people and corrected. Outside of engineering, the implementation is spotty at best, since it often doesn't make sense (what would 20% time be for someone in legal?).

There is a problem though, and that's in engineers using their 20% time. I have a 20% project but I haven't worked on it in a few months, as I've been too busy with my main project. As the company has gotten bigger people spend more of their time purely within their group, which makes it harder to venture outside without feeling like you are letting someone down. However, this is all up to the engineer finding a project other engineers will believe in/support, doing good planning, and proper time management. So it's not really the manager's fault in nearly every case where 20% time isn't fully used. I certainly wouldn't blame my manager for my lack of taking 20% time recently.

The cool thing is, it's correctly seen as a problem by the higher ups, and they are trying to figure out how to fix it. IMO it's probably more of a training issue than a political/bureaucratic problem.

Furthermore, it I've read that search is (not surprisingly) the most difficult team to get involved with and actually innovate with. There seems to be a general attitude of "don't meddle with the thing thats paying for all these crazy side projects."

ITYM web search and search ads, as the two are quite separate organizationally, and combine to bring in a lot of traffic and money respectively. It's not hard to get involved with either, though on core parts there is a level extra trust required, because the design and algorithms would be worth so much to well-funded outsiders. It is harder to innovate, but that's not really all that surprising; It's far easier to do something new and cool in a group of five people that's been around for a year, rather than a group of 50-100 that's been around for 5-10 years. It's hard to think of things that haven't already been tried, or that aren't already in use.

That said, it pains me to see people calling something stagnant; It's more like running to keep still ahead of spammers, scammers, shady SEO[1]. If people in search and ads stopped working on it, it'd go to hell in a matter of months. The crime rate in your neighborhood may be the same as 10 years ago, but that doesn't mean the police have done nothing in that time; People, processes, training, tools, and technology have mostly or all probably gotten better. That just what it takes to keep ahead and not fall behind.

[1] There's good SEO and bad SEO, and I don't wish to give the whole industry a bad name. Laying out your pages for a better human and machine readability for example is fine, whereas loading up on keywords marked as invisible on the page or buying into link farms is not. Of course like any industry, the operators within it span the gamut.

Re:It's sad..

[Anonymous Coward]

Stronger foothold != more marketshare.

Re:It's sad..

[mmwithpeanuts]

Oh, so right. Garages are our way of future inovations. If we can park a car in a garage, why not park an idea, or two on what to do next. We need to take this, next level. No playing around. A clusterfuck is putting things mildly. This is a sm clusterfuck with no orgasm. How whorable! Don't give up, maybe you, or someone like you can come up with a good concept, so we can take this BIG! How about artful official intelligence, where the search asks, "How are you doing? Would you care to see some pop ups in your tastes?" "Tell me exactly what you are seeking, and I will find..." Geared exactly to your tastes. The search may take a little longer, but who cares, if it will narrow things down to what you may want? But what about those who don't mind searching through everything, no matter what? Some people go out of their way, just to be nosey, even if thedon't need to. I know someone who will look through everything, even though the thing is staring right at them. They just want to see what else is there. Aside from that, a good many people just want to get to what they are seeking, so a program that helps one do that will take a lot of familiarity with the user, if you know what I mean, jelly bean?

Re:It's sad..

[stephanruby]

(what would 20% time be for someone in legal?).

Hey! That's not a fair statement. Someone in legal could find new innovative ways to sue competitors, create patents for areas that were previously unpatentable, and create new profits centers where previously none existed before. There is always more room to grow in that area.

Re:First post!

[Anonymous Coward]

Second is the first of the losers, so in a way, you're right.

Google should just buy it already

[Anonymous Coward]

It's like $13 a share... Offer $15, call it a day.

What was Microsoft's top offer?

[kclittle]

$33 per share, right? And now it's at $12 or $13? Hmmm... can you say "stockholder lawsuit"?

Re:What was Microsoft's top offer?

[Anonymous Coward]

I think it was $34? Either ways, they've hit below $12 numerous times (last time being 2 days ago). Some reputable business analysts said they're worth more like $7.50 (their P/E ratio is WAY over-inflated).

And now that MS said they didn't want them anymore, and that Google is doing the same, they're probably going to drop some more.

If I was a shareholder, I'd want nothing less than Jerry Yang's head on a stake. Firing him (with a multi-million dollar golden parachute) when he lost 2/3 of my investment money isn't what I'd want for sure.

Yahoo is the new AOL.

Re:What was Microsoft's top offer?

[Frosty Piss]

Is what's "good" for the company always high shre price? Maybe over the long run, if selling for a good price results in the demise of the company, than it's not really "good" for the sare holders?

Re:What was Microsoft's top offer?

[Anonymous Coward]

>Is what's "good" for the company always high shre price?

What's good for the company is whatever it's owners (i.e. shareholders) say it is. Period.

Re:What was Microsoft's top offer?

[ardle]

Here's something I find interesting: let's say Yahoo was only ever really worth 7.50. Yet brokers etc. were willing to trade them for much more than this. Microsoft claimed to be willing to pay much more than this with its own shareholders' money. Why does Jerry Yang get the lawsuit?
Is trading over-inflated stock - and artificially inflating stock prices - really much different to trading sub-prime mortgages?

Re:What was Microsoft's top offer?

[peektwice]

The shareholders have a say in what the board does, but often boards of directors are myopic, and will do ANYTHING to return "value" to the shareholders in the short term, and long term value be damned. But in the end, the shareholders, who themselves are near-sighted, determine what "value" is.

Re:What was Microsoft's top offer?

[Jorophose]

Except, you know, what happens to all those free software developpers at Yahoo! and Zimbra and such?

You want to tell me that doesn't draw any income at all?

Being bought up by Microsoft would lead to a tear-down of the company, effectively. Just steal the search engine and keep rolling.

(and there was a lawsuit, IIRC, but it may have been thrown out for excess idioticy)

Re:What was Microsoft's top offer?

[mabhatter654]

I always likened it to the beanie baby craze. They will always have some value slightly more than retail like $7 buck each to the right person, but selling them for $50 or $100 is "opportunity cost", Microsoft jacked the price of Yahoo up because they want it for the value of removing competition in the long term.. they were basically offering the $30/share to close it and keep the Microsoft shares from being watered down by competition. Microsoft will take their $180B cap and add $17B to it.. and in another year it will be all gone, absorbed into bureaucracy and all the products killed.

Re:First post!

[Anonymous Coward]

Speaking of losers, what the fuck was Sun thinking when they decided to ask users to install the Yahoo! toolbar upon installation of java?!

That's the kind of shit Apple or Microsoft would pull. Come on, sun, you're more profesional than that, aren't you?

And what about the employees?

[OakLEE]

What's really sad is that Yahoo's CEO Jerry Yang had a lot of support from employees who feared that Microsoft would can them. The threat of their revolt was in part what drove Microsoft away.

Now he's turning around and repaying them by announcing a second around of layoffs that will total about 10% of the workforce. Source. Looks like everyone got the raw deal out of this. It makes you wonder if Yang even had a plan for Yahoo post-merger.

Re:There was a man

[Anonymous Coward]

Do these trolls never get it?

We can see the flipping links before even needing to click it, or hover it.

Fail trolls really are fail.

oh the irony

[Anonymous Coward]

The DOJ wants more competition in web advertising but Yahoo just isn't competitive without this deal. They need this deal to go through otherwise they're dead in the water. What's going to happen? Yahoo will get bought out, reducing competition. Thank god the DOJ saved us from this collusion.

Google should encourage M$ to buy Yahoo!

[i_want_you_to_throw_]

Yahoo! has lost the search engine war. If M$ buys Yahoo! they will basically whore out the Yahoo! page with ads and compete just as ineffectively as they always have.

Google is ahead because M$ and Yahoo! don't know how to give the people what they want and until they get that down, they are doomed to failure.

Google has always been in the dominant position because, let's face it, Google doesn't HAVE to buy Yahoo! They might buy Yahoo! to keep M$ from getting them but if it's too difficult why should they?

As everyone knows who knows anything about Carl Icahn it's this: he has a history of buying companies, stripping off the good parts and profiting. Now that he has two people on Yahoo!'s board and Google's unwillingness to help, it's almost a sure bet that M$ is going to get the search engine part........and they will fail ultimately in the search engine arena.

closer to $23-24

[Trepidity]

Microsoft made a mainly stock offer, of slightly over one share of MSFT per share of YHOO. At the time, MSFT was trading at about $28-29 per share, so this valued Yahoo at ~$31-32 per share. However, MSFT is now at $22, so had Yahoo's investors taken that offer, they would be sitting on something worth ~$23-24.

Of course, they could've sold the Microsoft stock immediately upon completion of the deal for ~$31-32. But if they had wanted to do that, they could've just sold their Yahoo stock in the first place, deal or no deal, because it was trading at about $30 itself at the time.

Re:closer to $23-24

[Anonymous Coward]

The offer was 50% cash, 50% stock, not "mainly stock". With MSFT being down ~$7/share, that brings the offer down ~$3.50/share, valuing YHOO at around ~$28/share.

Gooya

[Anonymous Coward]

It has been reported that google and yahoo would merge and change the company name to Gooya

Booya!

Re:There was a man

[css-hack]

I fear that such trolls are attempting to google-bomb, by associating the keywords "barack obama" with the goatse link.

The Department of Justice?

[dwarg]

I can't believe the government suddenly wants to regulate a merger. I thought that went out the window the day they let Microsoft off the hook with a slap on the wrist. Funny what a little economic meltdown will do.

At least the Fed didn't decide Yahoo needs a bailout. Why not throw a few billion their way while they're at it? And I hate to bring it up, but my company could use a little propping up too. It's a one person business so a few million would probably do it.

MODS: read parent

[Anonymous Coward]

That's pretty insightful.

Re:MODS: read parent

[Anonymous Coward]

That's pretty insightful too.

Re:First post!

[Anonymous Coward]

Smallest penis!

*wince*

[Tubal-Cain]

Yahoo and AOL are conducting due diligence to see what a combined company would look like.

Why does the Titanic come to mind?

Re:First post!

[Tubal-Cain]

Adobe does the same thing, and Google has a whole toolbar suite of it's own. It's hard to download something popular without such an "offer".

Yahoo knows

[S77IM]

A cat is no trade for integrity.