Yahoo to Test Google Ads

In what looks like a last ditch effort to fend of Microsoft's bid Yahoo is close to announcing a deal that with Google that would carry search advertising from Google Inc. as part of a test that could lead to a broader partnership.

According to the WSJ Online it will be a two week test limited to no more than 3% of US traffic of Yahoo's Web search results. The test will allow the two sides to evaluate the revenue potential of a broader search ad outsourcing arrangement.

The announcement looks like an effort to signal to investors that alternatives to the Microsoft deal exist. If that is the case it is a poor way of doing it. This doesn't come close to offering shareholders $31 share. Or it may be a new strategy for Yahoo - try to irritate Microsoft just enough hoping that they eventually drop their offer.

The way things are going shareholders may end up wanting $31/share to get out of this thing. The big day that will decide everything is Yahoo's Q1 results which are scheduled 2 weeks from now. If the numbers disappoint shareholders will want out. If they beat we could see Yahoo! survive. I've haven't seen such anticipation for any companies Q1 result in a while! Hold on to your seats....

Vassilios

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Vassilios
Co-Founder
OuterVillage.com
http://outervillage.com

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