it must have been a busy day at yahoo. lots of developments on all fronts. First yahoo decided to use google advertising along side yahoo search results. As part of the deal google will serve advertisements along side 3% of yahoo search results for the next 2 weeks. This is an attempt by yahoo to prove the real earning power of its web properties to the investors. Hopefully that will make the investors realize that yahoo is much more valuable than what microsoft is offering.

Microsoft responded by saying “Any definitive agreement between Yahoo! and Google would consolidate over 90% of the search advertising market in Google’s hands. This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo!”“. Definitely any long term relationship between yahoo and google will run into monopoly issues.

Next techcrunch is reporting that a yahoo and aol deal may be very close to completion. As part of the deal Time Warner would fold its AOL unit into Yahoo and make a cash investment in return for about 20% of the combined entity.

News Corp seems to have switched sides and joined the microsoft side.

The story just became more interesting. I am more interested in the result of yahoo’s experiment with google ad as that may alter the competitive landscape of online advertising for quite sometime to come.

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