As the U.S. Department of Justice prolongs its review of their search advertising deal, Google and Yahoo lean further toward scrapping their plans, the Wall Street Journal reported Friday.
Signed in June, the deal would let Yahoo run Google search ads and split the revenue. The companies voluntarily delayed implementing the agreement until early October to give the DOJ a chance to review the deal's antitrust implications.
[ Keep up on the latest tech news headlines at InfoWorld News, or subscribe to the Today's Headlines newsletter. ]
However, as October draws to a close, the DOJ has yet to sign off on the deal, which represents a much needed annual revenue opportunity of about $800 million for Yahoo.
In its first 12 months after implementation, the deal could give Yahoo between $250 million and $450 million in incremental operating cash flow, the company has said.
A collapse of the deal would hurt Yahoo more, considering it is struggling financially and its stock price is hovering between $12 and $13 per share.
If the deal is scrapped, it would fan the flames of criticism that have been roasting Yahoo's executives ever since they got blamed by many stockholders for derailing Microsoft's acquisition attempt.
Right before walking away from the negotiating table in early May after a tumultuous three-month bid, Microsoft offered to buy all of Yahoo for $33 per share.
At the time, Microsoft CEO Steve Ballmer said that the possibility that Yahoo might enter into a search ad deal with Google had played a big part in Microsoft's decision to drop its bid.
Later, Microsoft came back and tried to buy Yahoo's search advertising business, but Yahoo instead opted for the more limited Google deal.
Now it looks like Yahoo might end up with its hands empty -- no deals with either Google or Microsoft, and a precarious financial situation that has led to two rounds of layoffs this year, a voluntary exodus of many high-ranking business and technology leaders, and much distress among shareholders.
Recently, there have been rumors that Yahoo and AOL are in talks to merge, but there is skepticism over how beneficial that deal would be in the long run.
Although fusing the companies would give Yahoo an instant revenue and market share boost, it's not clear how bringing together two struggling Internet companies would solve their respective problems.
According to the Journal, Google and Yahoo met on Thursday with the DOJ, which apparently wants the companies to sign a consent decree outlining the deal's terms and subjecting their compliance to a judge's oversight.
This condition is particularly unappealing to Google, and might lead both companies to cancel the deal as early as next week, reported the Journal, citing anonymous sources.
A variety of ad industry groups and search market competitors have voiced objections to the deal, saying it would strengthen Google's already dominant position in search advertising.
This whitepaper explains the terminology and concepts behind Data Replication technologies and establishes some sizing rules through worked examples. Learn the new paradigm in disaster tolerance—protect data anywhere.
Download now »
Server virtualization is a popular option for dealing with mounting datacenter costs. Another equally promising approach is the use of an Application Delivery Controller. Citrix NetScaler provides a low-cost way for organizations to reduce their server count and accrue cost savings from a reduction in space, cooling, power and personnel.
Download now »
The emergence of WLANs has created a new breed of security threats to enterprise networks.
Included in HP ProCurve WLAN solutions is security technology that alleviates threats from WLANs through:
* Monitoring wireless activity inside and out of the enterprise
* Classifying WLAN transmissions into harmful and harmless
* Preventing transmissions that pose a security threat to the enterprise network
* Locating participating devices for physical remediation
Effectively address data protection challenges, implementing solutions that help store and protect business–critical data while cutting costs and improving efficiency and reliability.
Download now »
Sign up to receive Security Resource Alerts
This white paper provides guidance on how to develop a strategic approach to managing and monitoring logs, a key function required for compliance with many regulatory mandates and a critical defense against security threats.
Download now! »
Learn about the processes and technologies that support security information management (SIM) operations, as well as the business case for SIM. The series examines different options for implementing SIM and gives you evaluation criteria for selecting the best option for your organization.
Download now! »
Learn the strategies, actions, and capabilities that Best-in-Class organizations employ and technologies they choose to obtain superior performance against various security performance metrics. This report provides guidelines for identifying which security solutions to consume as a MSS and defines best practices for choosing and managing MSSPs.
Download now! »
3 Recommendations
