Search deal with Google over Microsoft: Yahoo’s Roy Bostock and Jerry Yang explain

Its been some time now since we had all the statements flying back and forth from Yahoo and Microsoft over the possible purchase of Yahoo, today we are hearing that Yahoo has issued a letter to its shareholders to explain why they have made recent decisions. In the letter Yahoo CEO Jerry Yang and Chairman Roy Bostock explain in detail why they made a deal with Google over search and not with Microsoft.

The Washington Post have got the full letter that you can read by hitting the read link below this post, in a nutshell it seems that Google may have been the right deal and although Yahoo have steep fees now, they can decide to sell the Yahoo brand at a later date if thats convenient.

When we say Yahoo have done the right thing, we are taking into account they may be signing a search deal with Google to get Microsoft back to the table. Also the deal with Google could have been a way to make the stock market calm down a little and at least keep Yahoo share prices steady. Did this work?

Looking at the Yahoo share prices, this did not work and Yahoo has got to really make some tough decisions. Yahoo needs a Microsoft full buyout and Microsoft need Yahoo’s search business to have any real chance at taking some of Google’s market share.

This letter to shareholders confirms that Yahoo is sending a message to the market and Microsoft, as Washington Post put it, “If they want Yahoo’s search milk, they’re going to have to buy the cow”.

What have you made of Yahoo’s discussions with Microsoft regarding a potential transaction and where do you think this will be going?

Read the letter in full.