So, anything special happen yesterday?
After months of speculation and brinkmanship, Yahoo has finally agreed to a ten-year, multi-million-dollar ad deal with Google, virtually ending the chance that Microsoft will buy Yahoo and position itself to challenge Google for dominance of the search market. Under the terms of the deal, as reported by the NYT, Google will place ads on some of Yahoo's search results and ad pages, netting Yahoo up to $450 million in revenue in the first year. But that didn't mollify investors, who sent Yahoo's stock plummeting ten percent (!) when news hit the street yesterday.
Silicon Alley Insider is crawling all over this deal, which will undoubtedly enhance Google's stranglehold on the search market. Henry Blodget thinks the deal will give Yahoo the cash and time it needs to abandon the search market altogether and focus on display ads and its display serving platform, whereas a Microhoo deal would have only prolonged the long, slow death of Google's competitors. Dan Frommer hits up former FCC staffer Blair Levin, who says the feds will give this deal a serious look; Yahoo will have to demonstrate that its own search function can operate separately from Google's and guarantee continued competition in the search market. (Ha!) Celebrity investor Carl Icahn, who launched a brutal campaign to force Yahoo CEO Jerry Yang to play ball with Microsoft, reportedly took a $120 million bath on the news.
Over at TechCrunch, Michael Arrington thinks Yahoo's leaders just wiped out billions of dollars in their company's value, destroyed their future, cost investors a fortune they'll never get back, and left no room for anyone to ever challenge Google again: "I don’t believe that there is anything Yahoo could do at this point to further destroy their business that would surprise me. ... When I accused Yahoo of playing the crazy card in their negotiations with Microsoft, I never thought these people were actually insane. ... Yahoo’s hatred of Microsoft runs so deep that they were actually, in the end, willing to destroy the future of their company just to keep it independent for a short while longer. ... he delicate power balance among the big players was disrupted today in a big way, and the consequences will be felt over the coming months and years. We need a competitive market in search to ensure the health of the Internet. Now, it's nearly impossible to see how that can happen." Wow, tell us how you really feel.