Google deal 'best thing for Yahoo!'

26th June 2008

Yahoo!'s recent deal with Google was the best move for the search company, a letter to shareholders has argued.

Chief executive Jerry Yang and chairman of the board Roy Bostock claimed in the document released this week that the search advertising Google tie-up was better than the "search-only hybrid" arrangement proposed by Microsoft.

The executives attempted to persuade investors that billionaire Carl Icahn's attempts to replace the Yahoo! board with members who support a Microsoft takeover would be bad for the company.

They revealed that Microsoft's offer would have seen the software titan purchase its search advertising business for $1 billion (£500,000), investing $8 billion in the company and getting a percentage of future advertising revenues.

Microsoft would also have gained the power to veto any proposed sale of Yahoo! in the future.

Bill Gates, the founder of Microsoft, steps down from his day job at the company this week.