Yahoo to announce reorg, Google ad deal

Yahoo could announce a reorganization in its technology group and a significant search-ad partnership with Google as soon as today.

Yahoo's long-awaited deal to show Google ads on search results and an unrelated executive reorganization in its technology group could be announced today, CNET News.com has learned.

The Google deal, tested for two weeks in April and under development since then, could help improve the revenue generated by Yahoo's search. But investors probably shouldn't expect a significant financial lift until 2009, because the deal won't necessarily kick in immediately, a source familiar with the plan said.

The Google ad deal isn't the only change afoot at Yahoo, which has been under intense scrutiny with Microsoft's acquisition attempt and the machinations of activist shareholder Carl Icahn. The company is also dealing with at least two executive departures.

Jeff Weiner, the executive vice president who runs Yahoo's network division, is leaving , but another senior executive also is departing Yahoo's technology group, the source said.

The technology group runs Yahoo's infrastructure and its Yahoo Open Strategy effort to make the Internet company a foundation for others' Web applications, among other things.

Hilary Schneider
Hilary Schneider could be taking over some duties at Yahoo held by the departing Jeff Weiner. Stephen Shankland/CNET News.com
Yahoo declined to comment for this report.

The executives who report to Weiner could report to Hilary Schneider, Yahoo's executive vice president of global partnerships and the leader of Yahoo's efforts to make money from its products, the source said.

Update, 11:20 a.m. PDT: TechCrunch reports the Yahoo-Google deal could be announced after the market closes this afternoon.

Update, 11:54 a.m. PDT: The Wall Street Journal reported Thursday that Microsoft is no longer willing to pay $33 per share for Yahoo and that talks between the companies ended without a deal. Icahn earlier had told Yahoo Chairman Roy Bostock to offer itself to Microsoft for $34.375 per share .

Update, 12:03 p.m. PDT: Usama Fayyad, Yahoo's chief data officer and executive vice president of research and strategic data solutions, is the departing technology executive, The New York Times reported Thursday.

Usama Fayyad
Usama Fayyad, chief data officer at Yahoo Yahoo

Update, 12:15 p.m. PDT: Microsoft talks are indeed over . Yahoo said in a statement that "discussions with Microsoft regarding a potential transaction--whether for an acquisition of all of Yahoo or a partial acquisition--have concluded...with respect to an acquisition of Yahoo's search business alone that Microsoft had proposed, Yahoo's Board of Directors has determined, after careful evaluation, that such a transaction would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo stockholders."

Update, 12:32 p.m. PDT: It looks like another departure is Jason Zajac, who'd at various times has been general manager of social media, head of finance for the audience division, and vice president of corporate strategy for Yahoo. He's bound for Hewlett-Packard, a source familiar with the situation said.

Update, 12:48 p.m. PDT: Yahoo's search-ad partnership with Google raised Microsoft's antitrust hackles; Google dominates the market. But Google's top executives, who have said they would rather Yahoo remain independent than be acquired by Microsoft, have downplayed Google-Yahoo antitrust concerns by arguing that the relevant market is online advertising, not just online search advertising.

Google CEO Eric Schmidt reiterated that point Wednesday in an onstage interview .

Google is a "relatively small part" of the advertising market, Schmidt said. "Yahoo is the No. 1 player by far in the display ad business...If we were to deal with Yahoo or the like, we would be sure to structure in such a way that (antitrust) concerns were not the primary concerns."

A source has said that in order to allay antitrust concerns, the Yahoo-Google ad deal would involve an open bidding process in which Microsoft also could participate, with the ad being delivered by the company that would generate the most revenue when a searcher clicked on the ad. Further details about the scope of the deal remain unclear.

Update, 2:16 p.m. PDT: Hewlett-Packard confirmed that Zajac will start working in the company's Personal Systems Group on June 23.

News.com staff writer Erica Ogg contributed to this report.

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About the author

Stephen Shankland has been a reporter at CNET since 1998 and covers browsers, Web development, digital photography and new technology. In the past he has been CNET's beat reporter for Google, Yahoo, Linux, open-source software, servers and supercomputers. He has a soft spot in his heart for standards groups and I/O interfaces.

 

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