Google - Yahoo! Deals
Yahoo on Wednesday sent a letter to its shareholders justifying its deal with Google, saying it will enhance the company's profitability and provide more shareholder value than the offer put forth by Microsoft to invest in Yahoo's search business.
The deal with Google will generate US$250 million to $450 million in incremental operating cash flow for Yahoo in the first year, Yahoo Chairman Roy Bostock and CEO Jerry Yang wrote in the joint letter.
LATEST GOOGLE - YAHOO! MONTHLY REPORT:
Together, Google, with a 61.8% share and Yahoo, with 20.6%, own 82.4% of the U.S. search market, according to comScore's latest monthly report.
Microsoft offered to acquire Yahoo in February for $44.6 billion. When Yahoo held out for more than the software giant was willing to pay, Microsoft withdrew an increased bid of $47.5 billion in early May and proposed buying Yahoo's search business for $9 billion a month later.
Shares of the world's largest software maker are down 22 percent this year, sales of Windows software are slowing, and an attempt to buy Yahoo! Inc. flopped. And Google Inc. is widening its lead over Microsoft in Internet searches, leaving Ballmer with a case of ``chronic Google envy,'' according to Jane Snorek, an analyst at Minneapolis-based First American Funds.