Yahoo dodge the bullet

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June 16th, 2008 by Click Consult

There haven't been many bigger stories in search marketing than Yahoo & Microsoft's potential get-together and it is set to continue on to soap opera proportions.

In the previous episodes Yahoo the falling giant of pay per click (PPC), receives an unsolicited offer of $33 per share for a complete take over. The Yahoo board, thinking these undervalued the Yahoo brand, turn Microsoft down but not outright. Yahoo wanted to hang on for a $37 per share price approximately 25% more than the market value.

While Yahoo's market value did not reflect the potential value of the search marketing company brand and web site properties, many share holders would have been happy to take the cash on offer. This created a number of factions within the share holder base voicing themselves on any platform possible.

Yahoo looked for a way out of the impending take over. Even opening some of their pay per click (PPC) properties to the biggest rival, Google. This was frowned upon by both pay per click marketers and more importantly privacy advocates who worry Google’s power is spreading too far.

Last week this really came to a head, when Carl Icahn invested in a huge amount of Yahoo shares. Not know for his work in search marketing, Mr Ichan is a clever business man who has forced many a merger and made a tidy profit. With a number of other backers, mostly investment firms. The plan was, with enough backing to over through the Yahoo board and install a board more favourable to a Microsoft takeover.

Into this week and Carl Icahn is deflected by the Yahoo board and Jerry Yang stays at the helm. All is not over for the deal but in a step that could both appease the shareholders and benefit Yahoo, an alternative deal is offered… And that is the cliff hanger!

What the deal comprises of is not clear, but many people speculate this could be the sale of a number of Yahoo properties and even the sponsored links rights for Yahoo search results. This would allow Yahoo to continue as a search engine and develop into the modern markets earning profits as a Microsoft partner.

As we all wait for the next episode, many are growing weary and the show is losing viewers. I for one would like this to be resolved quickly for the benefit of advertisers every where.

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