Senior Google executives have publicly expressed interest in a potential advertising partnership with search engine rival Yahoo.
The comments from chief executive Eric Schmidt and co-founder Sergey Brin follow a two-week shared advertising trial which many analysts saw as an attempt to derail Microsoft’s bid for Yahoo.
The two-week test saw Google supplying selective advertisements served to Yahoo search engine users.
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Microsoft officially withdrew its offer to acquire Yahoo on Saturday — but only after it threw an additional US$5 billion on the table.
In a letter to Yahoo CEO Jerry Yang, Microsoft chief Steve Ballmer confirmed that Microsoft was willing to offer US$33 a share, but that Yahoo was holding out for at least US$37 a share, or US$5 billion more than Microsoft was prepared to spend. In the letter, Ballmer also says he is ruling out a direct offer to shareholders.
“This approach would necessarily involve a protracted proxy contest and eventually an exchange offer,” Ballmer said. “Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft.”
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The Board of Directors of Yahoo! Inc. today sent the following letter to Steve Ballmer, Chief Executive Officer of Microsoft Corporation.
Dear Steve:
Our Board has reviewed your most recent letter with regard to the unsolicited proposal you made to acquire Yahoo! on January 31, 2008.
Our Board carefully considered your unsolicited proposal, unanimously concluded that it was not in the best interests of Yahoo! and our stockholders, and rejected it publicly on February 11, 2008. Our Board cited Yahoo!’s global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision.
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