We saw that film

If you know anything about Microsoft history, you can easily see that, the battle between Microsoft and Google is just begin. Google, last week, agreed with yahoo about web-ads. That is probably people thinking is the end of the Microsoft absolutely wrong. Microsoft has a battle between, Netscape, ICQ, linux, which makes Microsoft stronger. In all these cases Microsoft wins the battle with absolutely the same way. Take the battle from technology to economy, which is their profesionality. As I said to Bill Gates on his last visit to Turkey, in my point of view Microsoft is not a technology company. They are a marketing company. They don’t produce technology, but selling technology. If Google try to fight with Microsoft in the market. They will probably lose the fight…

As Microsoft Walks Away, Yahoo Enters Google Ad Pact

Microsoft Corp. abandoned its pursuit of Yahoo Inc., opening the way for Yahoo to complete a search-advertising pact with rival Google Inc. that pits the industry’s two biggest forces against Microsoft.
Yahoo says talks with Microsoft are off, and it’s also not interested in selling parts of its business to the software giant. This means Yahoo’s future probably isn’t heading in the direction most investors would like. John Letzing reports.

Microsoft told Yahoo that it was no longer interested in pursuing a takeover, even at the $33 a share it offered for the Internet company last month. That price would have valued Yahoo at nearly $50 billion.

Microsoft also unsuccessfully floated an alternative proposal to acquire Yahoo’s search business for about $1 billion, a person familiar with Microsoft said. As part of that deal, Microsoft said it was prepared to acquire an additional 16% of Yahoo for $35 a share, or about $7.73 billion, according to people familiar with the situation.

Yahoo said Thursday that under the new Google pact, it will display some ads sold by its rival in a deal Yahoo estimated would generate $800 million in annual revenue through improved monetization of certain types of searches. Both companies said they were looking at ways to expand the limited partnership, possibly into display advertising.

Yahoo will control how Google’s ads are displayed alongside its own advertising. The pact is sure to face regulatory scrutiny. The companies agreed to delay its implementation for as many as three and a half months to allow regulatory review. In an interview, Yahoo President Susan Decker described the deal as “a bridge” that will help the company build up a converged display and search business.

The agreement seemed to leave room for Yahoo to pursue another deal, including a sale to Microsoft. Yahoo said either party can end the agreement in the event of a change in control. If that happens in the next 24 months, Yahoo would have to pay a termination fee of $250 million, minus some of the revenue Google had earned through the deal.

Yahoo said Friday that Google may terminate the agreement if it can’t generate a certain minimum revenue amount. In a filing with the Securities and Exchange Commission, the company said Google can terminate the agreement if after 10 months — and each month after that — the gross revenue recognized by Google is less than $83.33 million for the four prior calendar months.

The Google-Yahoo collaboration is likely to get a hard look by regulators in both the U.S. and Europe. Sen. Herb Kohl (D-Wisc.), chairman of the Senate Antitrust Subcommittee, said the deal “raises important competition concerns” and promised a close examination.

“The consequences for advertisers and consumers could be far-reaching and warrant careful review, and we plan to investigate the competitive and privacy implications of this deal further in the Antitrust Subcommittee,” Sen. Kohl said in a statement.

The latest moves portend a period of deep uncertainty for the Internet sector, as the biggest players look for strategic footing against Google and smaller upstarts. Yahoo’s future also remains unclear. It must prove to impatient investors and employees that its independent strategy can work while competition heats up.

In retrospect, Microsoft’s tactics appear to have badly backfired. Instead of winning Yahoo’s huge audience and online search capabilities, Microsoft has driven its quarry into the arms of its archenemy — Google.

Yahoo resisted Microsoft from the beginning. Microsoft later raised its bid from $31 a share to $33. When Yahoo demanded even more, Microsoft said it was walking away.

A few weeks later, Microsoft re-emerged, saying it was willing to discuss an alternative transaction with Yahoo that wouldn’t involve a full takeover. But it also said it wasn’t ruling out pursuing a full-scale deal. That gave Yahoo investors hope that a deal was possible.

Chief among those hoping for a deal was investor Carl Icahn. Mr. Icahn said Thursday that he was studying the situation but otherwise declined to comment.

The negotiations between the two companies unraveled June 8 during a meeting at a private airport in San Jose, Calif. The Yahoo contingent included Chief Executive Jerry Yang and Chairman Roy Bostock. Microsoft’s team was led by Chief Executive Steve Ballmer.

At the meeting, Microsoft made it clear it no longer wanted to pursue a larger deal, the people familiar with the matter said. The Yahoo camp wasn’t interested in the smaller deal.

Two days later, Yahoo’s board met to evaluate its options and decided to pursue a deal with Google. Thursday, Mr. Yang notified Microsoft of Yahoo’s decision. Yahoo and Google signed the new deal.

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