Yahoo!'s in the tight spot right now and it is stalling in many people's opinion, waiting for a significant other bidder, to form an alliance of its own choice. A source close to Yahoo's strategy was quoted by Reuters as saying that the Sunnyvale-based company would consider a business alliance with Google, just to thwart the takeover.
Not only that, but the red phones have been ringing
between the two companies, with Google's CEO Eric Schmidt reportedly calling his Yahoo! counterpart, Jerry Yang, offering his company's help. There was nobody available for comment on the matter from either of the two Internet giants, but it's clear why the Mountain View-based company would do such a thing. The statement of David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer at Google, earlier was clearly denoting fear and worry. That and the opportunity to get even with Microsoft for opposing the DoubleClick acquisition as well.
Although Google could not possibly cook up a bid for Yahoo!, because antitrust regulators would not allow the possible deal to go through, the business coalition would prove in more ways than one the choice to pick ahead of the others. News Corp is also assumedly preparing to bid, but few analysts see that happening and going through. Of course, Yahoo! could also be trying to pull a fast one with these talks and waiting for Microsoft to increase their bid to a sum closer to what the board thinks it is worth.
An email sent on Friday by Jerry Yang to all his company's employees wrote: "We want to emphasize that absolutely no decisions have been made - and, despite what some people have tried to suggest, there's certainly no integration process underway," as quoted by Reuters. Nevertheless, Google is one of the very few who can actually get involved in a bidding war with Microsoft, and that's a fact, while the results of the talks between Yahoo! and Google are yet to be seen.