Media In The City: Google Approaches Yahoo! About Possible Partnership

It was another big week for media news in the City, with reports that Google had approached Yahoo! about a possible link-up to fend off Microsoft’s advances.

At the start of the week Google raised objections to Microsoft’s $44.6 billion bid for Yahoo!, saying that a takeover would create a business with an overwhelming share of online communications services of web-based email and instant messaging (Full Story).

Writing on the official Google blog, David Drummond, Google’s chief legal officer, said that “Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the internet”.

This was soon followed by the news that Google had proposed a partnership with Yahoo! in an effort to escape Microsoft’s takeover bid.

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 (Full Story).

Also last week, News Corp announced second quarter pre-tax profits of $1.39 billion (£705 million), up 9.2% year on year (Full Story).

Time Warner was reported to be setting out plans to split AOL’s business in two, moving its online access business for consumers away from its advertising content (Full Story).

Havas chairman Vincent Bolloré was understood to be preparing a takeover bid of rival Aegis.

Bolloré currently owns a 29.9% stake in Aegis, just short of the 30% threshold at which he would be required to make a bid (Full Story).

Meanwhile, Naked Communications was acquired by Australian marketing services company Photon with an initial cash payment of A$36 million (US$33 million) (Full Story).

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