Google-Yahoo Deal Not So Far-Fetchedhttp://goo.gl/wDcXnOver the weekend it was leaked that Google was interested in helping at least a couple of private equity players to finance a purchase of Yahoo.Most folks have protested loudly against this possibility by concluding that such a deal would never get past the U.S. government.Google, with already two-thirds of the market share of the search space, would significantly increase that by taking over Yahoo's share and leaving the rest of the market to Bing, Ask Jeeves, and whatever else is left.Of course, that is right.Google previously tried to strike a deal with Yahoo after the 2008 Microsoft buyout was pulled and before Carol Bartz signed up to outsource Yahoo's search to Bing. That potential tie-up between Google and Yahoo was discouraged by the government.So why is Google leaking this information now? These are smart guys. They know that search is a non-starter.One cynical theory is that they have no interest in Yahoo at all.They're merely trying to seem interested so Microsoft will be forced to more aggressively bid for Yahoo. With a company that bid "pi" for the Nortel patents before Apple and a consortium of others won them, I suppose anything is possible.However, I just don't see what the point is for Google to do this. Will leaking something cause Microsoft to bid $25 a share instead of $20 for Yahoo!? That would be the equivalent of an extra $4 billion to Yahoo shareholders that Microsoft would have to pay out. That's not chump change, but is that really going to hurt Microsoft? And why would Microsoft really take such action based on one leak? Which leads me to conclude there is real interest by Google in Yahoo. However, I don't think it's for its search business.I think the jewel for Google in the Yahoo empire is its display ad business. That's a $2 billion-a-year business for Yahoo and many believe Yahoo is dramatically under-monetizing it.What could it be worth under Google using DoubleClick's technology? $3 billion? $4 billion? Google knows better than us.
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