Jun 13, 2008 : Yahoo Signs Deal with Google
📅 - Seach engine provider Yahoo! announced it has reached an agreement with search engine giant Google (google.com) that will enhance its ability to compete in the converging search and display marketplace, advancing the company's open strategy.
According to reports on Thursday, the deal was announced just a few hours after revealing it unsuccessfully tried to persuade software giant Microsoft (microsoft.com) to renew its previous offer of $33 per share,
Yahoo! says the deal enables it to run ads supplied by Google alongside Yahoo!'s search results and on some of its web properties in the United States and Canada and could boost the company's annual revenue by $800 million.
Under the non-exclusive agreement, Yahoo! will also be able to display paid search results from other third parties, as well as from its own Panama marketplace, Yahoo's seemingly lackluster search advertising engine, which has been seen as a fairly unsuccessful initiative thus far, generating significantly fewer dollars per search query than AdSense.
"We believe that the convergence of search and display is the next major development in the evolution of the rapidly changing online advertising industry," says Jerry Yang, CEO and co-founder of Yahoo! "Our strategies are specifically designed to capitalize on this convergence and this agreement helps us move them forward in a significant way. It also represents an important next step in our open strategy, building on the progress we have already made in advancing a more open marketplace."
Despite on-going rumors of working on a deal with Google amidst negotiations with software giant Microsoft, in April, The Wall Street Journal reported that Yahoo had begun testing Google's AdSense for Search service in the US in an effort to pressure Microsoft into raising its bid.
It is believed the tests confirmed Google's technology will generate more revenue for Yahoo! than its own system.
After approximately four and a half months of negotiations, Microsoft officially withdrew its acquisition offer in May sparking a a disastrous shareholder proxy fight to oust current board members.
Yahoo! says its current agreement with Google has a term of up to ten years: a four-year initial term and two, three-year renewals at Yahoo!'s option.
The deal also includes an escape hatch should Microsoft or another suitor show interest in buying the company. If Yahoo! is sold, Google can receive a termination fee of up to $250 million.
Although Google and Yahoo! are not required to receive regulatory approval of the deal before implementing it, the companies have voluntarily agreed to delay implementation for up to three and a half months while the US Department of Justice reviews the arrangement due to anti-trust concerns that have been brought up by Microsoft, politicians and consumer-interest groups.
Google already holds about 75 percent of the $11 billion search advertising market in the US with Yahoo! a distant second at nine percent, according research firm eMarketer.
According to reports on Thursday, the deal was announced just a few hours after revealing it unsuccessfully tried to persuade software giant Microsoft (microsoft.com) to renew its previous offer of $33 per share,
Yahoo! says the deal enables it to run ads supplied by Google alongside Yahoo!'s search results and on some of its web properties in the United States and Canada and could boost the company's annual revenue by $800 million.
Under the non-exclusive agreement, Yahoo! will also be able to display paid search results from other third parties, as well as from its own Panama marketplace, Yahoo's seemingly lackluster search advertising engine, which has been seen as a fairly unsuccessful initiative thus far, generating significantly fewer dollars per search query than AdSense.
"We believe that the convergence of search and display is the next major development in the evolution of the rapidly changing online advertising industry," says Jerry Yang, CEO and co-founder of Yahoo! "Our strategies are specifically designed to capitalize on this convergence and this agreement helps us move them forward in a significant way. It also represents an important next step in our open strategy, building on the progress we have already made in advancing a more open marketplace."
Despite on-going rumors of working on a deal with Google amidst negotiations with software giant Microsoft, in April, The Wall Street Journal reported that Yahoo had begun testing Google's AdSense for Search service in the US in an effort to pressure Microsoft into raising its bid.
It is believed the tests confirmed Google's technology will generate more revenue for Yahoo! than its own system.
After approximately four and a half months of negotiations, Microsoft officially withdrew its acquisition offer in May sparking a a disastrous shareholder proxy fight to oust current board members.
Yahoo! says its current agreement with Google has a term of up to ten years: a four-year initial term and two, three-year renewals at Yahoo!'s option.
The deal also includes an escape hatch should Microsoft or another suitor show interest in buying the company. If Yahoo! is sold, Google can receive a termination fee of up to $250 million.
Although Google and Yahoo! are not required to receive regulatory approval of the deal before implementing it, the companies have voluntarily agreed to delay implementation for up to three and a half months while the US Department of Justice reviews the arrangement due to anti-trust concerns that have been brought up by Microsoft, politicians and consumer-interest groups.
Google already holds about 75 percent of the $11 billion search advertising market in the US with Yahoo! a distant second at nine percent, according research firm eMarketer.
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