Yahoo Castrates Microsoft Talks, Forms Search Relationship with Google

Yahoo to Microsoft: no, you can't have the company, and no, you can't buy our search, either. This follows FOUR MONTHS of hardcore media drama between the two of them. Here's a word from stock market angryman Carl Icahn (who, btw, is trying to oust Y!'s board):

In my opinion it will be extremely difficult for Microsoft or any other companies to trust, work with and negotiate with a company that would go to these lengths [to scuffle a deal].

Background: some investors believe the Microsoft deal might've benefited Yahoo and presented a serious search/ad/mobile contender against Google. They also contend that Yahoo CEO Jerry Yang ended talks for emotional, largely personal reasons.

More at MarketingVOX.

And Google saves the day, sweeping Yahoo out of its two seconds of obsolescence. Shortly after MicroHoo talks fell out, the companies announced Yahoo will outsource its US and Canada search and contextual ad business to Google. The deal spans 10 years and is non-exclusive, meaning Google ads will be mixed with ads from Yahoo's own sponsored search business, as well as any other companies it wants to menage with.

But analysts say that if the ad placement is algorithmically merit-based, Google ads will probably win out every time, which may drive some marketers to disregard Yahoo's search business entirely, putting all their eggs in the Google basket and driving prices up, up, up.

More incentive to go all-Google: Google served 68 percent of US searches last month and 87 percent in the UK. Right now, it's very good to be Larry and Sergey.

Cheers to a homogenous future.