According to the Associated Press, Google is reportedly interested in helping a third-party company finance the purchase of competitor Yahoo. The company isn’t interested in owning Yahoo themselves, according to the report, but instead would assist another company altogether in making the purchase. So the obvious question is: what the heck for?
AP says their informer tells them that Google has held informal meetings with as many as two separate private equity firms about a possible Yahoo purchase.
Why Would Google Want To Buy Yahoo?
It’s not a natural fit right off the bat. Sure, Google and Yahoo have long been competitors, but there are a great many differences between the two companies and their respective services. However, there are a few possible reasons or motivations for them to be exploring this option:
To Shut It Down
Google actually has a pretty solid history of buying companies that compete with them in one or more areas only to then shut the company down completely. They’ve done it numerous times in the past. But Yahoo is pretty huge.
Maybe their hope is to see it sold to a liquidation firm or something.
To Screw Microsoft
Microsoft has been in business with Yahoo for a good while now, due to their partnership in search–Bing pretty much powers all Yahoo search these days and has for some time. If Google were to help facilitate a new owner for Yahoo (or become a new part-owner themselves), they could begin to drive a wedge in that deal.
Maybe Google would rather see Yahoo Search powered by Google?
To Help A Competitor Because Competition Is Good For Everyone
Ha ha ha ha ha ha.
Sorry… excuse me. I had to laugh at that… couldn’t be helped. I’ve already seen a few analysts suggest that Google is a very smart company, and one that knows the value in competition. The implication is that Google might spend tons of money to help a struggling competitor just out of the kindness of their hearts, and it’s ridiculous.
Coke knows that Pepsi plays a valuable role in Coke’s success… they know there’s inherent value to both companies when the American cola market has competition. But Coke would never float Pepsi a billion dollar loan just to keep the company in business so they’ll have a good, old-fashioned rival.
This is business… in a struggling economy. Google isn’t looking to help finance a Yahoo takeover as part of an elaborate Christmas present… they’re doing it because there’s some advantage in it for them down the road.
To Get Them Out Of The Way
Remember not too long ago when Google was bidding on Hulu? And who were the other big companies looking to purchase Hulu? Amazon… Dish… and Yahoo. Is it possible that Google has run into this kin dof thing before? That maybe Yahoo is too unfocused to be a real competitor to Google but big enough to still gum up the works on new initiatives Google is chasing? Maybe by helping them find new owners, even with some out of pocket costs, is just a way to ensure future deals go more smoothly?
What Do You Think?
Google being involved in any way with a purchase of Yahoo would no doubt receive some government scruitny. But hey, after the whole Comcast/NBC deal was allowed to go through, I’m not really sure that Congress is as worried as they used to be about unfair business practices and monopolies.
What’s your opinion? Why do you think Google is looking at helping some company purchase Yahoo? Let us know in the comments below.