Microsoft Flips Over Yahoo/Google Ad Tests

by , 9:40 AM EDT, April 10th, 2008

Yahoo began testing Google's AdSense for Search Service on Wednesday as a way to generate additional revenue through its own search service, and Microsoft isn't happy about the deal. The Redmond-based company fears that a deal between Yahoo and Google would stifle the Internet search advertising market.

Microsoft General Counsel Brad Smith commented "Any definitive agreement between Yahoo and Google would consolidate over 90 percent of the search advertising market in Google's hands."

In addition to potentially consolidating a large percentage of the online search advertising market, it could also make Microsoft's plans to take over Yahoo more difficult to complete.

Mr. Smith added "This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo. We will assess closely all of our options."

Microsoft began pursuing Yahoo in February after the Internet search and ad company reported a drop in earnings and a round of employee layoffs. Microsoft's own online search ad popularity has trailed far behind Google, and the company saw Yahoo as a potential tool to take a slice of Google's revenue pie.

So far, Yahoo hasn't been interested in Microsoft's unsolicited buyout offer and has stated that the deal undervalues the company.