Yahoo signs up Google as sales fall

Yahoo has signed a search advertising deal with Google, providing a potential boost to Marissa Mayer’s efforts to turn around the company, which reported revenue and profit that fell short of market estimates.

The deal with Google, a unit of Alphabet, builds on an existing search partnership with Microsoft under which Yahoo gets a percentage of revenue from ads displayed on its sites.

Yahoo, whose shares fell yesterday, said the companies have agreed to delay implementation of the deal in the US to allow competition division of the Department of Justice to review it.

Yahoo has been struggling to boost revenue from ad sales in the face of stiff competition from Google and Facebook.

The Google deal was one of the few bright spots included in the company’s third-quarter results statement.

Yahoo said it expected fourth-quarter revenue of $1.16bn–$1.20bn (€1.02bn-€1.05bn), well below the average analyst estimate of $1.33bn.

Ms Mayer, in her fourth year as chief executive, said the forecast was “not indicative of the performance we want”.

Yahoo said the proposed spinoff of its 15% stake in Chinese e-commerce giant Alibaba Group, a key issue for shareholders, may now close in January.

Yahoo earlier this year sought a private letter ruling from the US Internal Revenue Service to confirm whether the transaction, worth about $27bn, would result in a tax obligation.

The tax agency denied the request, but Yahoo said it would go ahead with the spinoff by year-end anyway. Many analysts attribute little value to Yahoo’s core business without its Asian assets.


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