From Greg's Head

Back in May, I blogged about the Microsoft/Yahoo! merger falling apart. Now, according to reports, Yahoo! is seeking a partnership with Google. Well…at least to handle some of its advertising sales.

Announced last Thursday, the deal is a 10 year, non-exclusive partnership that gives Yahoo! the ability to use Google’s search and contextual advertising technology.

The deal still has to face the Department of Justice to determine if it breaches anti-trust regulations. 

I’ve got to admit, I’m skeptical about this latest move and I’m curious to see the reaction from Yahoo!’s shareholders. I wouldn’t be surprised if there’s some sort of corporate coup in the future. There’ve been rumblings about it for a month or two now, since the Microsoft deal fell through.

Though folding into Microsoft might not have been ideal, I’m not sure how partnering with Google will be beneficial in the long term. In the short term I see the influx of cash as a positive, but can’t see much beyond that.

Tameka Kee, from Online Media Daily, wrote a great piece about it including Yahoo! president Sue Decker’s official statement.

Would you partner with one of your direct competitors? What do you think about this latest move from Yahoo!? 

Not sure what Yahoo! is trying to accomplish. We all know they are trailing Google in the race, but this seems as if they are giving up. They are basically admiting that they can not develop a better contextual advertising platform than Google so they are not even trying to compete. They are just going to "rent" Google's technology for 10 years. As a shareholder, I would want them to develop their own system that worked better or as good as Googles. If they are going to stop trying, they might have been better off selling out to Microsoft. One of the last things Yahoo! needs is for Google to get even stronger than they already are.