It’s not exactly a huge surprise, given the anti-trust brouhaha that the proposal caused in Washington, but Google (NASDAQ:GOOG) formally announced that its search deal with Yahoo (NASDAQ:YHOO) is over, kaput, deceased, pushing up the daisies — it is an ex-agreement. It wasn’t just the anti-trust concerns either; some advertisers were apparently worried about a lack of choice as a result of the tie-up, and not without reason. So how badly is Yahoo screwed right now? On a scale of one to 10, I would say Yahoo is now at 11.
As John Paczkowski notes at All Things D, this deal was supposed to generate as much as half a billion dollars worth of additional cash flow in its first year, money Yahoo could definitely use. But more than that, this deal was a way of trying to stand on its own two feet (albeit while leaning on Google for support), and that is now gone. Microsoft (NASDAQ:MSFT), which had its takeover bid for Yahoo derailed by the Google arrangement — among other things — is no doubt doing the math on another bid.
The only problem for Yahoo is that instead of a $45-billion deal at $31 a share, Microsoft is more likely to bid about half of that, and that’s if it even makes another bid for Yahoo at all. Nice job, Jerry. How many failed Hail Mary passes can one CEO throw?