Google happy Microsoft walked

2008-05-09 12:10

Scott Morrison

California - Google Inc Chief Executive Eric Schmidt said on Thursday he was "obviously happy" that Microsoft Corp walked away from its unsolicited $47.5bn offer to buy rival Yahoo Inc.

Google executives also indicated they remained excited about the prospect of reaching an advertising outsourcing agreement, by which Yahoo would carry search ads served by Google.

Such an agreement was touted by Yahoo as a possible strategic alternative to Microsoft's bid, with one financial analyst suggesting it could contribute about one billion dollars to Yahoo's annual cash flow. However, a report in The Wall Street Journal on Thursday cited sources close to Google as saying the company might be reconsidering such a pact.

Google co-founder Sergey Brin said on Thursday afternoon that Google was "very excited" about working with Yahoo, although he said there was "no particular deal to announce" at this time.

Brin noted that Google and Yahoo enjoy a shared culture and values and there was a positive "dynamic" among the two companies' technical teams.

"We want to support their ability to have choices," Brin said in a press conference prior to the company's annual meeting. "We want to ensure they have as many options as possible."

Schmidt said Google and Yahoo concluded a "brilliant" two-week test about a week and a half ago. Asked if the two companies were still talking about a possible outsourcing arrangement, Schmidt replied: "We're very friendly."

Schmidt also downplayed concerns that a search advertising pact could raise regulatory concerns, arguing that any such agreement would be "structured to address anti-trust concerns that have been raised".

The chief executive declined to speculate on whether Microsoft may yet revive its bid for Yahoo, which fell apart last weekend after the two sides couldn't agree on price. "You never say never in this business," he said.

Schmidt rejected suggestions that the company had lost its recruiting edge in the wake of the recent departure of several high-profile executives and engineers.

He noted that Google doesn't publicise all the staff the company hires, and he added that there hasn't been a change in the rate of employee attrition. "We have a deep bench," he said.

- Dow Jones