Google, Verizon Possible Suitors For Yahoo - InformationWeek

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IT Leadership // Digital Business

Google, Verizon Possible Suitors For Yahoo

Embattled Internet pioneer Yahoo has extended its deadline for bidders by a week as it entertains interest from Verizon Communications and possibly Google -- both of which may face anti-trust scrutiny.

10 Top Tech Companies Poised For Massive Layoffs
10 Top Tech Companies Poised For Massive Layoffs
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Yahoo reportedly has postponed the deadline for seeking bids for its assets by an extra week, as the embattled Internet pioneer entertains offers from the likes of Verizon Communications and possibly Google, according to reports.

But should Verizon, which now owns Yahoo rival AOL, or Google succeed in wooing Yahoo, the parties may potentially face a challenge from anti-trust regulators. For Yahoo, it has been down that path before when it tried to strike a search deal with Google eight years ago.

The telecom behemoth Verizon is interested in bidding for Yahoo's portal, and also its Yahoo Japan stake, according to a Bloomberg report.       

Verizon is looking at putting a valuation at under $8 billion for Yahoo's core business. The telecom company would also be interested in distributing Yahoo's 35.5% stake in Yahoo Japan, which carries a market value of approximately $8.5 billion, to either its shareholders. Otherwise it would seek a buyer for that investment, Bloomberg reported.

(Image: maybefalse/iStockphoto)

(Image: maybefalse/iStockphoto)

The telco would kick out current Yahoo CEO Marissa Mayer and replace her with AOL's CEO Tim Armstrong and the company's executive vice president Marni Walden, the report noted.

Meanwhile, Google may be toying with the idea of making a play for Yahoo's core business. But back in 2008, when Yahoo was fending off a buyout, and later a search-only deal with Microsoft, the struggling Internet pioneer announced plans to do a search-only deal with Google.

Under the nonexclusive Yahoo-Google search advertising partnership, Google ads would have appeared on Yahoo's search pages. Yahoo, in turn, would have received $800 million in revenue from Google in the first year. Yahoo would have been free to put the Google ads wherever it chose on its site and decide to what extent they appeared.

But the Association of National Advertisers objected to the proposed deal, expressing concerns that it would result in higher advertising rates to its advertisers, and that it would especially limit competition if Yahoo ultimately outsourced all of its advertising to Google.

The Department of Justice's anti-trust regulators reviewed the proposal and wanted to put a cap on the percentage of Google search ads that could appear on Yahoo's search pages. The DOJ and Yahoo wrangled over the Yahoo-Google deal. Ultimately Yahoo and Google backed away, citing the potential for a long legal fight.

[Read Yahoo Releases Massive Data Set to Academic Institutions.]

Last year, Yahoo and Google ultimately struck a search advertising partnership that is slated to expire in 2018, notes a Business Insider report. Nonetheless, Yahoo and Google may likely face scrutiny from anti-trust regulators should they push past a partnership and into a buyout of assets.

According to comScore's February 2016 US desktop search engine rankings, Google held 64% of the market and Yahoo 12.2%. Verizon's AOL was barely a blip at 0.9%, according to comScore's study.    

Verizon's AOL, which mirrors a number of features as Yahoo with its portal, may find less intense anti-trust scrutiny.

As Yahoo weighs its potential offers for its various assets, it is pushing back its deadline for offers by one week to April 18, noted a report in Re/Code.

Dawn Kawamoto is an Associate Editor for Dark Reading, where she covers cybersecurity news and trends. She is an award-winning journalist who has written and edited technology, management, leadership, career, finance, and innovation stories for such publications as CNET's ... View Full Bio

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