Yahoo to announce reorg, Google ad deal

Yahoo's long-awaited deal to show Google ads on search results and an unrelated executive reorganization in its technology group could be announced today, CNET News.com has learned.

The Google deal, tested for two weeks in April and under development since then, could help improve the revenue generated by Yahoo's search. But investors probably shouldn't expect a significant financial lift until 2009, because the deal won't necessarily kick in immediately, a source familiar with the plan said.

The Google ad deal isn't the only change afoot at Yahoo, which has been under intense scrutiny with Microsoft's acquisition attempt and the machinations of activist shareholder Carl Icahn. The company is also dealing with at least two executive departures.

Jeff Weiner, the executive vice president who runs Yahoo's network division, is leaving, but another senior executive also is departing Yahoo's technology group, the source said.

The technology group runs Yahoo's infrastructure and its Yahoo Open Strategy effort to make the Internet company a foundation for others' Web applications, among other things.

Hilary Schneider could be taking over some duties at Yahoo held by the departing Jeff Weiner.

(Credit: Stephen Shankland/CNET News.com)

Yahoo declined to comment for this report.

The executives who report to Weiner could report to Hilary Schneider, Yahoo's executive vice president of global partnerships and the leader of Yahoo's efforts to make money from its products, the source said.

Update 11:20 a.m. PDT: TechCrunch reports the Yahoo-Google deal could be announced after the market closes this afternoon.

Update 11:54 a.m. PDT: The Wall Street Journal reported Thursday that Microsoft is no longer willing to pay $33 per share for Yahoo and that talks between the companies ended without a deal. Icahn earlier had told Yahoo Chairman Roy Bostock to offer itself to Microsoft for $34.375 per share.

Update 12:03 p.m. PDT: Usama Fayyad, Yahoo's chief data officer and executive vice president of research and strategic data solutions, is the departing technology executive, The New York Times reported Thursday.

Usama Fayyad, chief data officer at Yahoo

(Credit: Yahoo )

Update 12:15 p.m. PDT: Microsoft talks are indeed over. Yahoo said in a statement that "discussions with Microsoft regarding a potential transaction--whether for an acquisition of all of Yahoo or a partial acquisition--have concluded...with respect to an acquisition of Yahoo's search business alone that Microsoft had proposed, Yahoo's Board of Directors has determined, after careful evaluation, that such a transaction would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo stockholders."

Update 12:32 p.m. PDT: It looks like another departure is Jason Zajac, who'd at various times has been general manager of social media, head of finance for the audience division, and vice president of corporate strategy for Yahoo. He's bound for Hewlett-Packard, a source familiar with the situation said.

Update 12:48 p.m. PDT: Yahoo's search-ad partnership with Google raised Microsoft's antitrust hackles; Google dominates the market. But Google's top executives, who have said they would rather Yahoo remain independent than be acquired by Microsoft, have downplayed Google-Yahoo antitrust concerns by arguing that the relevant market is online advertising, not just online search advertising.

Google CEO Eric Schmidt reiterated that point Wednesday in an onstage interview.

Google is a "relatively small part" of the advertising market, Schmidt said. "Yahoo is the No. 1 player by far in the display ad business...If we were to deal with Yahoo or the like, we would be sure to structure in such a way that (antitrust) concerns were not the primary concerns."

A source has said that in order to allay antitrust concerns, the Yahoo-Google ad deal would involve an open bidding process in which Microsoft also could participate, with the ad being delivered by the company that would generate the most revenue when a searcher clicked on the ad. Further details about the scope of the deal remain unclear.

Update 2:16 p.m. PDT: Hewlett-Packard confirmed that Zajac will start working in the company's Personal Systems Group on June 23.

News.com staff writer Erica Ogg contributed to this report.

[FutureGuy]

Yahoo is a mess, they should first send that Jerry guy packing.

[NWLB]

The irony, is even if Microsoft had managed to buy them, they'd have wound up screwing it all up anyway, and still ended as a tiny second or third place player.

The amusing part is simply seeing a big company run like crazy, to avoid being sucked into the MS void.

[ross613]

The irony is - for those like NWLB who refuse to see it - just how many anti-MS folk there are out there willing to argue the exact opposite point of view on antitrust the second it's Google that's sitting in the defendant's box. As for what's amusing in all this: it's just how daft Yahoo management has to be to think it is either making a sound business decision walking away from MS (which is, still very much, the most successful software company on Earth), or that its own shareholders - who can see the value Microsoft brings to the table - want Microsoft in at the behest of the apparent hubris and prejudices of Yahoo management.

[romancoor]

and now what will happen with advertisers like me who use Yahoo...less clicks for us which will lead me to recommend pulling my yahoo ads/spend in favor of Google and other engines..what a joke Yahoo is. First, they negelected my million dollar plus account years back, denied anything was wrong with there system(inflated click prices..never got even a sorry from them), thought they were kings of the world and now they are crumbling before our eyes

Showing Google ads on Yahoo...why will anyone even bother going to Yahoo anymore....MSN was smart and not caving into there BS....they have been in trouble for a long, long time

[notesrules]

ross613, I rooted for Yahoo! remaining independent and am glad to see Microsoft lose again. There were questions Microsoft was unwilling to answer that might have persuaded me to reconsider my thoughts. Some questions were (and are): What was the long-term strategy after buying all of Yahoo!, what was the long-term strategy for buying part of Yahoo!, what would Yahoo! shareholders have gained in the long-term after Microsoft bought all of Yahoo! IF (not when) Microsoft fell further behind Google. There are more questions about how Microsoft's deals would have helped (not hurt) Yahoo! in the short-term and long-term. Folks have focused on Yahoo!' s inability to compete successfully against Google. How about some reporting on Microsoft's inability to compete successfully against Yahoo!? Do you have some answers for me and others? I am more than willing to read what you have to write.

[notesrules]

ross613, I rooted for Yahoo! remaining independent and am glad to see Microsoft lose again. There were questions Microsoft was unwilling to answer that might have persuaded me to reconsider my thoughts. Some questions were (and are): What was the long-term strategy after buying all of Yahoo!, what was the long-term strategy for buying part of Yahoo!, what would Yahoo! shareholders have gained in the long-term after Microsoft bought all of Yahoo! IF (not when) Microsoft fell further behind Google. There are more questions about how Microsoft's deals would have helped (not hurt) Yahoo! in the short-term and long-term. Folks have focused on Yahoo!' s inability to compete successfully against Google. How about some reporting on Microsoft's inability to compete successfully against Yahoo!? Do you have some answers for me and others? I am more than willing to read what you have to write.

[publish1]

What's really amazing is the venomous hatred of MS simply because they are successful. That hatred stems from nothing more than the fact that they made a heck of a lot of money developing and marketing their products.

Now, these folks seem to think that MS should make all of their products available free and anyone who likes should be able to alter them as they see fit.

For those who put their work out there for anyone to use free of charge, I say Thank You. For those who develop a product so good and so powerful that it has the ability to command a good price, I say Good Luck!

My part is to either show my liking by buying or express my displeasure by passing it by. But to attempt to bring down entire corporations because they simply won't allow competitors to exploit products as building blocks for their own, seems to be the extreme antipathy of the American free enterprise system.

[t8]

It's not because they are/were successful that people hate them, it is because of their monopolistic abuses.
After all Google and IBm are successful and they are much liked.

Microsoft have stolen, denied access to API's, copied, and done exclusive deals to kill lots of good and smart technologies.
Then they charge the customer high prices for buggy software and we are the ones who end up dealing with the viruses.

Microsoft has 2 problems.

One is there past behaviour which means their image suffers.
The other is that the Windows platform is big and clunky and the Web is starting to replace it because using online services on any device beats the hell out of installing gigabytes of clunky files.
On the Web platform, you don't have driver issues because everything is processed on the server and delivered to you in lite HTML and Javascript.

Also, how often does Windows have big hits on it's platform. Not often these days and whenever there is, you can bet Microsoft will try and take the idea as their own.
But the Web has hits all the time, and the success stories of companies developing for the Web are much more plentiful than the ones who develop for Windows.

If you don't believe me, then ask yourself why VCs do not finance ideas based on Windows, but put their money instead into Web tech.

VCs know that a killer app on Windows will be vulnerable to Microsoft bundling their own version and hence they will only ever have limited success. But the Web is not owned by a greedy corporation and for that reason, people can sell their wares without having to worry about a selfish platform provider putting them out of business.

Today, people choose Google because they want to. No one is tied to Google. You can switch tehm off very easily and because of that, they actually compete to get your attention and business.
But people are often forced to use Microsoft, because Microsoft is bundled and for that reason, tey can afford to give you crap and still get money for it.

[victoriarose6201]

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