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Yahoo Cuts a Deal with Google

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Yahoo has entered into a non-exclusive agreement with Google (NASDAQ:GOOG) to allow Google to run ads on Yahoo’s web properties. The deal is estimated to ad approximately $800M a year in cash flow to Yahoo. As of June 8th, Microsoft and Yahoo have concluded their negotiations as well.

Microsoft (NASDAQ:MSFT) has expressed interest in continuing negotiations for a portion of Yahoo, but supposedly is no longer interested in an outright takeover of all of Yahoo. Yahoo still is not out of the woods though, their will undoubtedly be some anti-trust scrutiny of the deal, as well as continued pressure from Carl Icahn, Boone Pickens, and other large shareholders as they likely still seek to oust Jerry Yang and supplant the board with their own, presumabely so they can push through a deal with Microsoft.

Yahoo’s shares (NASDAQ:YHOO) ended down the day 10% to $23.63, roughly 30-40% less than where a deal with Microsoft could have been struck a few months ago.

As for the real estate plans of both companies, Google recently signed a deal with NASA [2] for a ground lease to build a campus, and Yahoo owns some 50 acres in Santa Clara that is available to it to construct a campus if need be. As of now, Yahoo is mainly spread out between its Sunnyvale and Santa Clara campuses, with much of the Santa Clara campuses and buildings owned by Sobrato.

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1 Comment To "Yahoo Cuts a Deal with Google"

#1 Comment By Helen Yi On June 13, 2008 @ 11:34 am

Yahoo is terrible. I can’t believe they are doing this. They opened the door to Google in the first place and ten years later this. Unbelievable.

Jerry Yang’s performance would be laughable if so many jobs and money wasn’t at stake.