• TechCrunch, Thursday, April 10, 2008 1:45 PM

Say it ain't so! In a deal that has many across the industry scratching their heads, Yahoo announced that it would begin testing Google AdSense ads on some of its non-premium inventory. The two-week trial run is aimed at proving to shareholders that the Web giant can provide more value as a Google partner than a division of Microsoft. In other words, Yahoo is willing to sleep with the enemy to fight off a bully. But as Michael Arrington notes, the Web giant's latest moves also seem indicative of the old-school, scorched-earth war tactics.

"Yahoo has put costly severance plans in place to both retain employees and make themselves a less attractive acquisition candidate. And by setting up Google as the only real option in search marketing, they are disrupting what little market balance and competition exists in that space today," Arrington says. "Their actions, which appear to be based on destroying their market value as a counter to the Microsoft bid, benefit neither their stockholders nor their employees."

Only time will tell if the moves Yahoo has recently made will stave off a Microsoft acquisition. And as Arrington asks: If Yahoo "wins" this epic battle with Microsoft, will there be anything left at the end to celebrate?

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