SiliconBeat

Confirming recent scuttlebutt, Google announced Wednesday that it was walking away from its advertising partnership with Yahoo. According to a press release from the U.S. Department of Justice, the agency had told the pair that it planned to file a suit to block the deal:

“Yahoo! Inc. and Google Inc. abandoned their advertising agreement after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the implementation of the agreement. The Department said that, if implemented, the agreement between these two companies accounting for 90 percent or more of each relevant market would likely harm competition in the markets for Internet search advertising and Internet search syndication.

“The companies’ decision to abandon their agreement eliminates the competitive concerns identified during our investigation and eliminates the need to file an enforcement action,” said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division. “The arrangement likely would have denied consumers the benefits of competition–lower prices, better service and greater innovation.”

As I wrote the other day, I think the notion that this deal raised anti-trust issues was wrongheaded. And I think Google and Yahoo could have won a court fight. The problem was that this would take time and money. And the deal didn’t really matter that much to Google from a financial perspective to invest all those resources in fighting to save it. Google was doing it, probably, just to thumb its nose at Microsoft and disrupt its bid for Yahoo.

For Yahoo, on the other hand, this is a body blow. Read the rest of this entry »

It’s become increasingly clear that the U.S. Department of Justice is building a case against the proposed ad deal between Google and Yahoo. And now there are rumblings that Google may walk away from the deal. Amid this speculation, there’s more talk that Yahoo and AOL are sniffing around each other again for some possible deal. If the Google deal collapses, Yahoo apparently feels it needs something to get its stock price going and buy it some time to implement its new “open” strategy.

All this hand wringing over the Google deal, however, has left me shaking my head.

Recall that Yahoo signed the deal with Google as a way to thwart the takeover bid by Microsoft. Not the greatest move in the world. But still, I don’t understand the firestorm of protest over it.

Here’s why: Read the rest of this entry »

So Steve Ballmer says he’s given up trying to buy Yahoo. If that were true, than it would be good news. Merc reporter Elise Ackerman wrote the following last Friday:

Ballmer said Microsoft’s strategy is to win through innovation, reinvention and investment in “semantic expertise,” referring to Microsoft’s recent acquisition of Powerset, a San Francisco search company with technology for helping machines better understand the meaning of Web pages and human queries.

The question is whether he really believes that. After all, hasn’t Microsoft been trying to do that on the Internet for more than a decade? And where has it gotten them? Answer: Total disarray. Read the rest of this entry »

Jim Hedger and Dave Davies asked me to come on Webcology, their Internet Radio show, on Thursday to talk about the Yahoo settlement with shareholder Carl Icahn and where things go from here. My part starts about 10 minutes in and lasts about 30 minutes (and there was a brief technical glitch where I got cut off). But otherwise, it was a good discussion. You can stream or download the episode here. And I’ve uploaded it to this post as well.

Let me know what you think. And be sure to check out their show.

Given that everyone seems to love a deal, any deal, the valley is once again salivating that something seems to be happening between Microsoft and Yahoo. That something seems to be some deal involving selling or outsourcing Yahoo’s search business to Microsoft. In theory, a sale would result in Yahoo getting some big chunk of change, while an outsourcing deal might include some cash and some share of ad revenues. In theory.

But if Yahoo punts on search, then what’s left? Read the rest of this entry »

There’s all sorts of nuttiness floating around late Sunday night now that Microsoft and Yahoo have announced that talks are back on. The twist now is that apparently Microsoft just wants Yahoo’s search business and may be willing to pay a bundle for it. PodTech founder John Furrier has been tweeting all night about being camped out in a Palo Alto hotel where Microsoft and Yahoo reps are supposedly hunkered down trying to furiously finish up a deal.

But Furrier thinks there’s another twist in store: Microsoft wants to turnaround and buy Facebook. For $20 billion! Furrier doesn’t cite any sources for this last bit of speculation. But it’s certainly intriguing.

Questions yet to be answered: How much would this really help Microsoft compete against Google? What would be left of Yahoo? Or rather, what would Yahoo do with the leftovers? It would certainly have a big bundle of cash to get a fresh start. But given the distinct lack of leadership (more on that tomorrow), lack of money and resources isn’t necessarily the problem. And if the Facebook thing is true, how will Microsoft pull off this massive integration challenge?

So much for a quiet week before the Memorial Day holiday.