In a move that would quite bad for the domain industry, if it became permanent, Yahoo announced today that it was beginning a 2 week test of about 3% of its traffic through Google’s adsence program.
Yahoo stated that “The testing does not necessarily mean that Yahoo will join Google’s AdSense for Search program or that any further commercial relationship with Google will result,”
This is clearly a missile fired by Yahoo at Microsoft.
Yahoo insists it’s worth more than the initial bid of $44.6 billion, or $31 per share, that Microsoft made more than two months ago.
But Microsoft hasn’t budged and recently threatened to lower the bid unless Yahoo capitulates by April 26.
In a statement Wednesday, Microsoft reiterated its belief that the current bid is fair and questioned whether antitrust regulators would allow Google and Yahoo to form a permanent partnership.
Google and Yahoo together control about 81 percent of the U.S. search market, according to the most recent data from comScore Media Metrix. If Yahoo were sold to Microsoft, those two companies would have a combined 31 percent market share in the United States, far behind Google’s 67 percent.
Microsoft responded to Yahoo announcement saying any definitive deal would would make the ad search market far less competitive.
‘Any definitive agreement between Yahoo and Google would consolidate over 90% of the search advertising market in Google’s hands,’ said Brad Smith, Microsoft’s general counsel, in a statement. ‘This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo.’
‘We will assess closely all of our options. Our proposal remains the only alternative put forward that offers Yahoo shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.’
Sen. Herb Kohl, D-Wisconsin, said an antitrust committee that he chairs would scrutinize any long-term alliance between Yahoo and Google.
Kohl indicated lawmakers are particularly concerned at signs that competition may lessen in the Internet ad market because Google just bought DoubleClick Inc., a major online marketing service, for $3.2 billion.
Certainly if a deal got done between Yahoo and Google domainers would be left with only one PPC choice.
As we all know certain domains and categories perform better at Yahoo than Google and of course the other way around.
Having a monopoly on the market certainly would not be good for domainers or advertisers.
I do not see how the justice department would allow such a deal to go through.
We will keep you updated
