Yahoo could begin carrying Google ads within a week, as it waits for Microsoft to give up its acquisition bid or attempt a hostile takeover, The Wall Street Journal reported Friday.
An ad agreement with Google would make it more difficult for Microsoft to take over Yahoo, and would provide Yahoo with increased cash flow in either scenario, the Journal said, citing people familiar with the situation. Yahoo and Google tested their proposed ad system over the last two weeks, which faces government scrutiny over possible anti-competitive practices. Both companies compete with Microsoft in various areas, and want to keep their rival at bay.
The deal, if it moves forward, could be worth as much as an additional $1 billion per year for Yahoo under a revenue-sharing arrangement with Google, according to a Citigroup analyst.
Yahoo is looking for alternatives to satisfy shareholders that it should remain independent and fend off Microsoft’s unsolicited bid to buy the Internet company. An announcement regarding Microsoft’s plan to abandon the acquisition or try to takeover Yahoo is expected soon.
The news of the Yahoo-Google partnership surfaced at the same time as a report that Microsoft was close to mounting a hostile takeover bid of Yahoo.