If reports from the Associated Press are correct, then it appears that Google is meeting with private equity firms about financing a third-party purchase of Yahoo! Regardless of the potential antitrust issues this type of deal might open given the positions of Google and Yahoo! in Internet search, this type of deal raises many questions.
Analysts are having a field day trying to guess why Google would pursue such a deal and what it might mean to the future of online search and publishing. Jeremy Scott of ReelSEO summed up some of the most likely reasons Google is looking at getting Yahoo! through a backdoor deal as the following:
- Google might purchase Yahoo! then shut it down as it has done with other competitors in the past.
- Google might want to break up the Yahoo! and Microsoft relationship. Microsoft has a heavy hand in Yahoo! ad sales and search, and there is certainly no love lost between Google and Microsoft.
- Google might simply want to make further deals between Yahoo! and Microsoft more difficult (such as a Microsoft acquisition of Yahoo!) by getting in the game and driving up acquisition costs making such a deal either painfully expensive to Microsoft or completely cost-prohibitive.
- Google might want to remove the obstacle that Yahoo! has become. In recent years, Yahoo! has become even more of a thorn in Google’s side as it eyes the same companies for acquisition as Google. For example, remember when both Google and Yahoo! were rumored to be in the market to buy Hulu?
This isn’t the first time that Google has pursued Yahoo! in one way or another. There is no doubt that Google would love to power the ads displayed on the massive amounts of highly-trafficked Yahoo! content. However, reports say that Microsoft is also pursuing options related to Yahoo!, and no one inside any of the companies is talking publicly yet.
As with all of these types of rumors, we’ll have to wait and see how it plays out. The one thing we do know is that Yahoo! has a large audience and a lot of content. There is equity in the brand, but that equity might not save it this time.
What do you think about the future of Yahoo!?