Google has reportedly proposed a partnership with search rival Yahoo! in an effort to escape Microsoft’s $44.6 billion hostile takeover bid.
It is understood that Google chief executive yesterday telephoned Yahoo! founder Jerry Yang to propose working together.
A partnership between the two could see Yahoo! outsource its search and advertising functions to Google while it concentrates on other areas such as mobile applications and social networking.
A report on MediaGuardian says that Google has also canvassed alternative bidders – including AOL Time Warner – in an effort to avert a Microsoft takeover.
Speaking at a briefing for Wall Street analysts yesterday, Microsoft’s chief executive, Steve Ballmer, said: “We think it’s a generous offer. We trust the Yahoo board and shareholders will join with us quickly in moving down an integrated path.”
He added: “Google’s clearly got a dominant position. They’ve got about 75% of paid search worldwide. We think this enhances competition. Anything else would be less good from that perspective.”
It was revealed on Friday that Microsoft had made a bid for Yahoo! (see Microsoft Bids $44.6bn For Yahoo!), which if it were to go through would be the largest ever takeover in the technology sector.
Last week Yahoo! announced that its Q4 profits fell 23% to $206 million, down from $269 million a year earlier, and confirmed plans to make 1,000 job cuts, its first cuts in six years (see Yahoo!’s Profits Fall).
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