Yahoo! 'closing in' on Google search ad deal

Category: Digital Marketing

April 18th 08, 10:57

Yahoo! is edging closer to a search advertising outsourcing deal with Google, a new report suggests.

The Wall Street Journal notes that the transfer of Yahoo!'s search ad business to Google could stave off a purchase of the company by Microsoft.

According to the publication, the Silicon Valley giants have reported positive results from a preliminary test of an outsourcing system.

Mark Mahaney, an analyst with Citigroup, told the Telegraph that Yahoo! could see its cash flow receive an annual boost of £1 billion through such an alliance, as more revenue is generated per query on Google.

However, competition regulators in the US and Europe may be wary of the arrangement if it goes through, which would see the options available in the search ad industry narrowed further.

Meanwhile, the April 26th deadline set by Microsoft, by which Yahoo! must give a decision on Microsoft's $31 (£16)-per-share bid, is approaching.

The software giant has hired Bryan Cave Strategies LLC to lobby federal government over the prospective deal, the Associated Press reports.

This news story was brought to you by Bluhalo, a leading UK digital agency.


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