Yahoo execs provide more details on Google deal

The mechanics and dynamics of the deal

At some point, the executives had to share some hard forecasts, though there were numerous caveats about the criteria they used to reach their estimates.

"At the current monetization rates," Yang predicted, "we believe that there's an approximate $800 million in annual revenue opportunity in the US and Canada, on those queries where monetization upside exists. This revenue opportunity could be achieved either from this arrangement with Google -- which includes both search and non-search elements -- or from other enhancements to our search capability, or a combination of them."

Did either party guarantee the other any transaction amount, perhaps as a minimum? Decker declined to respond.

She did, however, shed light on the fact that Yahoo expects to see revenues coming from the "tail" of the search, and probably not so much right at first: "When we contemplate the incremental cash flow as we first start ramping up, we're contemplating how we might learn from that and implement that in various verticals, types of queries that Google is particularly strong at, in areas where we don't have much of a marketplace now. So we're looking at a lesser ramp in monetization at the high end, and a higher approach to monetization [at the tail]; and it is our ambition to, as we get through the regulatory approval process, start to ramp up in ways that are very consistent with our long-term operational objectives of convergence, and also are consistent with the timing of our roadmap of AMP, and then subsequent releases that we expect in the coming months and quarters."

Both Decker and Yang noted repeatedly that this deal did not require regulatory approval in order to take place, in their opinion. However, Yahoo is voluntarily holding off on the deal for three and a half months, to give the Securities and Exchange Commission and other regulatory bodies time to review the details.

At least one regulatory body will do just that. This morning, the chairman of the Senate Antitrust Committee, Sen. Herb Kohl (D - Wisc.), issued a statement indicating his group will make use of that time. "This collaboration between two technology giants and direct competitors for Internet advertising and search services raises important competition concerns," Kohl stated this morning. "The consequences for advertisers and consumers could be far-reaching and warrant careful review, and we plan to investigate the competitive and privacy implications of this deal further in the Antitrust Subcommittee."

Jerry Yang led off yesterday's briefing with a quick note on Microsoft, stating it did indeed come to Yahoo over the weekend with one final combination offer which would have resulted in an acquisition of just its search business.

"At that meeting, Microsoft representatives stated unequivocally that Microsoft is not interested in pursuing a full acquisition of all of Yahoo," Yang said, "even at the price range it had previously suggested. With respect to an acquisition of Yahoo's search business alone, that Microsoft proposed, Yahoo's board of directors has determined, after careful evaluation, that such a transaction will not be consistent with the company's view of the convergence of search and display marketplaces, and will leave the company without an independent search business that we view as critical to our strategic future, and will not be in the best interest of Yahoo stockholders.

"It is important to note, however, that the agreement with Google does not preclude a subsequent change of control transaction with Microsoft or any other third party," Yang added, probably raising Carl Icahn's eyebrows in the process.