Google and Yahoo, the two most popular search engine and Internet service providers, had made plans five months ago to build partnership with each other to boost advertising revenue.
But in a different turn of evident, Google decided to back out from its initial plan to build partnership with Yahoo which is now struggling to its feet because of the alarming decline of advertising revenue which it has experienced for the past few months.
Because of this event, Yahoo may experience again another financial setback which has irked most investors who are still not yet convinced with the management’s decision to turn down Microsoft’s $47.5 billion takeover bid six months ago.
Because of this incident, Yahoo management may be forced to renew its deal with Microsoft which would mostly likely offer them with a much lesser deal compared to its initial offer. According to experts, Yahoo may find itself in sheer desperation which may force it to sell its share much less than $33 per share (the initial offer by Microsoft). While this prediction may be ironic—since Yahoo’s main reason for making a deal with Google is to avoid the aggressive attempt of Microsoft to acquire the company—most experts believe that this may only be the most pragmatic move that will allow Yahoo to survive in this trying time.
Google’s main reason for cancelling the proposed partnership with the company is that this plan may not be viable since antitrust regulators in Canada and US would most likely block this agreement.
With this turn of event, Yahoo CEO Jerry Yang should find another way to boost his company’s revenue which had started to decline almost 50 percent since 2007.
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