Going through the news,
The reasons behind Google’s decision:
• Even before the deal; Google is under the radar of antitrust regulators (Government) and customers (who believe the size of Google kills any scope for healthy competition). The post deal size will attract even more scrutiny.
• Lately it realized that the deal may have strategic importance as it will prevent Microsoft from getting Yahoo; which can use yahoo to get Google; but if this threat is taken aside, Google is not going to gain much from the deal(Yahoo, although second is way behind Google, that is no. 1)
So Google found that by going with the deal, it’ll risk alienating the Government and the advertisers.
What Yahoo lost by this development:
• An opportunity to boost its annual revenue by $800 million.
• An opportunity to appease its stakeholders who are incensed from the time it rejected a $ 47.5 billion takeover bid from Microsoft six months ago.
• Lost the right to negotiate if it goes back to Microsoft. Yahoo will have to settle for something far below what Microsoft offered in May, 2008.
• Lost an opportunity to benefit from Google’s superior technology in some areas.
[If the deal would have materialized the Google and Yahoo combine would have got under its control more than 80% of the U.S. search advertising market.]
The reasons behind Google’s decision:
• Even before the deal; Google is under the radar of antitrust regulators (Government) and customers (who believe the size of Google kills any scope for healthy competition). The post deal size will attract even more scrutiny.
• Lately it realized that the deal may have strategic importance as it will prevent Microsoft from getting Yahoo; which can use yahoo to get Google; but if this threat is taken aside, Google is not going to gain much from the deal(Yahoo, although second is way behind Google, that is no. 1)
So Google found that by going with the deal, it’ll risk alienating the Government and the advertisers.
What Yahoo lost by this development:
• An opportunity to boost its annual revenue by $800 million.
• An opportunity to appease its stakeholders who are incensed from the time it rejected a $ 47.5 billion takeover bid from Microsoft six months ago.
• Lost the right to negotiate if it goes back to Microsoft. Yahoo will have to settle for something far below what Microsoft offered in May, 2008.
• Lost an opportunity to benefit from Google’s superior technology in some areas.
[If the deal would have materialized the Google and Yahoo combine would have got under its control more than 80% of the U.S. search advertising market.]
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