Yahoo 'poisons' well, to test Google AdSense

Yahoo this afternoon made the unusual announcement that it would start a trial of Google's AdSense for Search service. The experiment will see Google's keyword-sensitive ads appear along some search results for visitors to the Yahoo website coming from the US. Starting the trial doesn't commit the company to the practice and will account for just three percent of all searches run on Yahoo's site, leaving the search engine firm's premium partners unaffected.

Significantly, Yahoo adds that it won't comment on the "nature or timing" of the decision but makes clear allusions to the move in the context of Microsoft's hostile takeover attempt. The Sunnyvale, California-based web company claims that its AdSense trial is an example of the company "maximizing shareholder value," language it recently used in an open letter to Microsoft CEO Steve Ballmer that formally rejects a deadline created by Microsoft to either accept its terms or face a proxy war via a directors' board vote.

Regardless of intent, the maneuver effectively institutes a "poison pill" tactic that sours Yahoo as a prospect for Microsoft control by forcing the latter to invest in a company now involved with Google, which Microsoft considers the primary motivator behind its $31 per share offer for Yahoo. Shortly after the merger's late January announcements, rumors surfaced that Google contacted Yahoo about a possible alliance knowing that the Yahoo board of directors is determined to keep the company independent and to avoid Microsoft in particular.

Neither Google nor Microsoft has yet commented on the deal.

Filed under: industry
Other story tags: Microsoft, Google, Yahoo