Only a few days into what was described as a limited test of AdSense for Search in Yahoo’s search results, rumors began that Yahoo would hand over more business to Google.
Well that didn’t take long. A week into the AdSense test on Yahoo, and already Jerry Yang wants to leap into Eric Schmidt’s open arms.
The Wall Street Journal cited people close to the matter on the likely expansion of this current partnership. Dropping AdSense into a limited set of Yahoo search results proved a positive experience.
Any expansion of the deal will have to be restricted in scope. Google and Yahoo own the top two search ad businesses; attempts to give Google a substantial part of Yahoo’s paid search probably means lawsuits from Microsoft over antitrust concerns.
Microsoft already protested the initial test, claiming a Yahoo-Google tie-up places 90 percent of the search ad market in one place. They are extremely unlikely to sit idle in the face of an expansion of this first test.
Rob Hof believes there is something fishy about the accelerated pace being suggested by the Journal. “Of all the back-and-forth negotiating tactics we’ve seen in this overlong Kabuki dance so far, this one takes the cake,” he said of the drawn out process of Microsoft’s takeover bid for Yahoo.
“Even the $1 billion a year that Citigroup thinks an outsourcing deal could add to Yahoo’s cash flow probably wouldn’t sway Yahoo shareholders staring at a $45 billion Microsoft buyout offer, so why would some smaller portion of that sway them any more?” he asked.
