Yahoo Inc. agreed to let Google Inc. sell search ads on its site, seeking to shore up sales after ending talks with Microsoft Corp. about a combination, the companies said on Thursday.
The deal may add 800 million U.S. dollars a year to sales, California-based Yahoo said in a statement. The companies will delay implementing the program for up to three and a half months to give the U.S. Justice Department time for review.
Separate statements from Microsoft and Yahoo signaled a more permanent rift between the two after months of on-again, off-again talks. It also heightened pressure on Yahoo to outline an alternative strategy.
Yahoo shares sank 10 percent Thursday after the company said talks with Microsoft failed. The partnership with Google may boost the amount of money Yahoo gets when people click on ads, part of Chief Executive Officer Jerry Yang's effort to deflect criticism from investor Carl Icahn, who said Yang scuttled a 47.5 billion dollar bid from Microsoft.
"Yahoo is being a reseller of Google whenever it makes sense and that is likely to be a lot of the time given how much more effective Google Web search ads have proven to be," Global Crown Capital analyst Martin Pyykkonen said.
The agreement with Google, which covers sites in the U.S. and Canada, may add as much as 450 million dollars in operating cash flow in the first 12 months, Yahoo said.
The agreement isn't exclusive, meaning that other companies in addition to Yahoo and Google will be able to sell ads to appear on Yahoo's pages. Yahoo's revenue last year was 6.97 billion dollars.
Microsoft had sought a tie-up with Yahoo for more than a year and by early May had offered up to 47.5 billion dollars, or 33 dollars per share, to buy the Internet company.
Its latest offer included buying Yahoo's search business and paying 35 dollars per share for a 16 percent stake in Yahoo, said people briefed on the matter but not authorized to speak publicly about it.
Source: Xinhua\agencies
|
Comment
Tell A Friend
Print Format
Save Article