Microsoft’s ultimatum has renewed Yahoo’s search for an alternative to being acquired by the software giant. Yahoo said it will begin a limited test of Google’s AdSense for Search service, which will deliver relevant Google ads alongside Yahoo’s search results. The company said the test is expected to last up to two weeks and will be limited to no more than 3 percent of Yahoo search queries.
“As previously announced, Yahoo’s board of directors is exploring strategic alternatives to maximize stockholder value, including exploration of potential commercial business arrangements,” the company said. It noted that “the testing does not necessarily mean that Yahoo will join the AdSense for Search program or that any further commercial relationship with Google will result.”
Old Names, New Negotiations
Yahoo and Time Warner’s AOL are also reportedly talking again. If reports in The Wall Street Journal hold true, it’s possible that Time Warner would fold AOL into Yahoo and make a cash investment for a 20 percent stake in the merged company. Yahoo would then repurchase billions of its shares at a price in the mid-$30s.
The Journal and The New York Times have both reported that Microsoft is talking with News Corp. about a joint bid for Yahoo. News Corp. had previously said it would not compete with Microsoft for Yahoo, but a joint bid could be a different story.
Microsoft CEO Steve Ballmer sent what amounts to an ultimatum to Yahoo’s board of directors on Saturday. Ballmer wanted Yahoo to authorize a team to negotiate and come to an agreement on a merger. Ballmer then gave the board a three-week deadline to reach an agreement or Microsoft will take the matter to Yahoo’s shareholders.
In a lengthy joint letter, Yahoo Chairman Roy Bostock and CEO Jerry Yang reiterated the company’s initial position that the merger is not in the…