If you believe what you read, it looks like Yahoo and Google are closing in on a deal, under which Yahoo would outsource its search to Google, potentially growing annual cash flow by about $1 billion.
That was the story that was buried in the *Wall Street Journal *(Page B2).
In reality: There is no way federal regulators could turn a blind eye to a Google-Yahoo partnership, which would potentially give Google control of more than 80 percent of the search market.
The WSJ says the companies are hoping to avoid federal scrutiny by exploring a "limited partnership" -- which would also limit the financial benefits of the deal. And if the numbers aren't as big and pretty as the numbers thrown out by Microsoft, it seems unlikely that Yahoo could get shareholder approval.
The Yahoo leak to the Wall Street Journal was, no doubt, just another attempt to motivate Microsoft to fatten its offer -- the Yahoo source specifically said the company could pull out of a Google deal at any time if the Microsoft acquisition goes through -- but the fact that the WSJ didn't give it front page treatment implies there's either a Yahoo-Microsoft news fatigue or the paper is tired of being used as Yahoo's mouthpiece.
Photo: Flickr/creepysleepy
