Yahoo tests Google’s Adsense, in talks with AOL
- Added:
- Apr 10, 2008
Yahoo! is to test Google’s online ad platform Adsense, dealing a major blow for Microsoft’s bid for the Internet giant in the process.
In an official statement released on Wednesday, Yahoo said that it will test Google's AdSense for two weeks on just 3% of its search queries.
The deal will see ads from Google’s Adsense appear on a small portion of Yahoo! search results.
Yahoo’s own search marketing system for advertisers was a major rival to Google's AdSense.
Microsoft had shown interest in buying Yahoo! in January this year, but Yahoo! declined the $44.6bn takeover bid saying that the offer undervalues the company.
Meanwhile, The Wall Street Journal reports that Yahoo is in the final stages of negotiations on a partnership plan with Time Warner-owned America Online (AOL) which would see the internet giants combine their online operations.
The WSJ reported that under the plan, Time Warner would fold its AOL unit into Yahoo and make a cash investment in return for about 20% of the combined entity.
As part of the deal, Yahoo would use the Time Warner cash and additional funds to buy back several billion dollars worth of its own stock at a price somewhere in the middle of the range between $30 and $40 a share, the reports said.
The partnerships with AOL and Google could be seen as efforts to either subvert Microsoft's bid to acquire Yahoo or prompt Microsoft to enhance its bid for the company.
Time Warner/AOL already has business ties with Google, with Google handling search advertising sales for AOL. Google has also acquired a 5 percent stake in AOL.
At the same time, Microsoft was taking steps of its own to strengthen its chances for the buy-out. A New York Times report indicated Microsoft was in negotiations with the Rupert Murdoch-controlled News Corp to put together a joint bid for Yahoo.
The partnership, which would add the internet site MySpace.com to the MSN/Yahoo service under a Microsoft acquisition, could help Microsoft’s deal appeal to Yahoo.
Microsoft Chief Executive Steve Ballmer said in a letter to Yahoo directors Saturday that if Yahoo does not accept the bid, his firm would make the bid a hostile one, bypassing the Yahoo directors and soliciting shareholders directly. In a letter Monday responding to Ballmer, they called his ultimatum "counterproductive."