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Suing Google over Yahoo

ryan-kevin
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The ongoing election drama might be over, but the Yahoo-Google partnership drama continues. Rumors floating about the Web included Google walking away from the deal. Confirmed reports of advertisers around the world being opposed to the deal threw a monkey wrench or two into the deal.

Yahoo's last ditch effort to generate additional revenue and thwart a hostile purchase from Microsoft might have provided sufficient impetus for a partnership six months ago, but we're a long way from the world we all knew then.

Yahoo's stock is now trading in the $12-$13 per share range. Yahoo is also chatting it up with AOL about picking up the lucrative content business. The Justice Department has frowned on Google and Yahoo teaming up, bringing in a big gun anti-trust litigator. The drama is far from over.

Anti-disensearchentarianism

The word monopoly comes up a lot. The phrase "restrictive monopolistic behavior" is thrown around in context quite a bit. Very few people actually realize that technically, a monopoly isn't illegal. However, using said monopoly to thwart efforts of potential competitors leads to legal complications.

What's most likely happening in the realm of search polygamy?

Yahoo wants access to Google advertiser bandwidth to help monetize a potential acquisition of AOL's advertising assets. Google likes the idea of a monkey wrench in Microsoft's Yahoo-acquisition machine. It's a pretty simple equation that has become more convoluted over the last few months.

The deal between Yahoo and Google was never really all that clear, a strategy that may have been engineered to be sufficiently vague. If vague was the plan for a quick regulatory approval, let this plan be known as the backfire heard 'round the world.

Digging up Bones

There's an awful lot of discussion surrounding the Yahoo-Google deal. There's even more discussion around Google in general. Last week, while CEO Eric Schmidt (in no way representing Google's interests) was out campaigning for Barack Obama, news came across the wire that the Yahoo-Google deal might not see approval until 2009.

I wonder why something like that might be delayed. Sandy Litvack is a very well known litigator in DOJ and anti-trust circles, the operative word being litigator.

You don't load the big guns without the intention of firing said guns. You don't apply the prophylactic unless you're ready for action. Do you get where I'm going with this?

There's a great deal more going on than a simple "should they or shouldn't they be allowed to buy each other's search ads." Consumer watchdog groups are making noise about Chrome's apparent shortcomings in privacy and transparency. People all over the world are more than a bit concerned about Google's data-capturing habits.

Possible Paths From Destruction

One might hope that Schmidt might help make some solid Washington contacts for the big search site, but that might not be enough.

Yahoo needs Microsoft, and Microsoft needs Yahoo. Even if this deal is somehow approved, the Google/Yahoo partnership has now been reduced to level of "why bother at all?" Estimates are now placing the deal at about $80 million in pre-tax revenue for Yahoo. Now that's exciting.

Here's my prediction; Yahoo will be purchased by Microsoft at a bargain basement price well below the original $31 per share.

Sometime in between, AOL's Internet advertising assets will go to one or the other and Google will see big time government intervention.

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