Not interested in ‘short term gains’

Yahoo! dismissed a search-advertising deal with Google due to certain antitrust concerns just one day prior to Microsoft made its offer, according to court documents made public a few days back. The issue was revealed in a complaint filed by the lawyers representing two Michigan pension funds in a shareholder lawsuit that aims to revoke Yahoo! takeover defenses and make the company to reconsider merger talks with Microsoft.

A document prepared for Yahoo! executives, said that the company is mostly interested in focusing on long-term value creation and not short-term gains which was agreed upon by all the members present at the meeting on 30 January just a day before Microsoft’s merger offer. Yahoo! employees were confused over whether the company is in the position to outsource its search-ad sales to Google. Company executives were confident to explain that any short-term gains would result in derailment of Yahoo!’s long-term plan to become a “must have” for the advertisers.

An extract from the company document said: “Short-term analysis of the revenue potential of outsourcing monetization may not take into account the longer term impact on the competitive market if search becomes an effective monopoly.” Here monetization refers to sales of search-related ads.

With these latest comments revealed recently it appears contrasting with Yahoo!’s subsequent notice when on 9 April it announced that it was already conducting a test with Google, to rely on the company’s goodwill to sell its search-ads. The fact that interested Microsoft to possibly but-out Yahoo! was to challenge Google citing its growing dominance of the web search business and mega share of ad sales tied to web search results. Interestingly, now even government regulators said they would investigate any possibility of Google-Yahoo! partnership.