Yahoo Execs opposed Google ad deal

Until Microsoft came along...

3 June 2008 14:46 GMT / By Katie Scott

A coalition in the US is currently fighting the proposed ad sharing deal between Yahoo and Microsoft but court papers have revealed that Yahoo's own execs were also against the plan ... that is until Microsoft made its hostile bid.

Reuters has accessed court documents from a lawsuit filed by attorneys representing two Michigan pension funds in who are aiming to revoke Yahoo takeover defenses and force the company to merge with Microsoft.

The talks between Microsoft and Yahoo are now ongoing, but this latest information will certainly annoy Gates and co.

"We are focused on long-term value creation rather than short-term gains", says a Yahoo document prepared for the company's execs ahead of an "all hands" internal meeting on 30 January - the day before Microsoft made its merger offer.

Executives then argued in the meeting that a Google ad deal would derail Yahoo's long-term push to become a "must buy" for advertisers.

Executives also, ironically, raised concerns about "the longer term impact on the competitive market if search becomes an effective monopoly".

Yahoo has done a complete u-turn on this position following on from Microsoft's takeover offer.

It agreed to a two-week trial with Google for their proposed ad-sharing deal on 9 April - incidentally in the midst of its attempts to shake off the computing giant's attentions.

Microsoft immediately hit out at the potential deal as anti-competitive - a call that is now being repeated by a newly formed coalition in the US.

Government regulators are currently investigating the possibility of a Google-Yahoo partnership.

Reuters adds that a Yahoo statement said "the company was disappointed at the judge's ruling to unseal Yahoo internal documents but said it would have little bearing on the outcome of the case".