How Google’s Checkbook Stymied Microsoft
Google was very much the spoiler in the deal. But its most effective
weapon was not threats or coercion, but its very effective, and
unconventional, use of its own checkbook.
Google has agreed to sell some search advertising for Yahoo. And since
Google earns far more on every search than its rivals do, this will
mean an immediate increase in Yahoo’s profits.
Microsoft’s chief executive, Steven A. Ballmer, said the prospect of
such a deal that could deprive Microsoft of being able to sell all
Yahoo’s search ads made proceeding with a hostile takeover less
attractive. And Yahoo hopes the promise of a big check each quarter
from Google will placate enough shareholders to head off a revolt over
its decision to turn down Microsoft’s offer of $33 per share.