• TechCrunch, Friday, June 13, 2008 11:30 AM

TechCrunch's Michael Arrington, for one, was not impressed. He writes: "I don't believe that there is anything Yahoo could do at this point to further destroy their business that would surprise me." Not only did the announcement of a Yahoo-Google search partnership seal Google's search monopoly, it also sent Yahoo shares tumbling: the stock had fallen from around $26 per share on Thursday to under $22 in early Friday trading, wiping out around $4 billion in market capitalization. Yahoo is now worth $30 billion; Microsoft would have bought the company for $47.5 billion a month ago. Are shareholders pissed? You bet they are.

Meanwhile, Arrington explains how the Google monopoly will solidify over the next several months. Even though the terms of the search deal sound innocent-a non-exclusive arrangement where Yahoo can deploy Google ads however it chooses to-, "the truth is that this will cause even more advertisers to flee Yahoo's platform," Arrington says, "which will drive auction-determined ad rates (on Yahoo) down. Which will drive Yahoo to take more Google ads." Which becomes a cycle where the company has no choice but to rely on Google increasingly over time.

Arrington calls the Yahoo board "insane" for securing this deal. "Yahoo's hatred of Microsoft runs so deep that they were actually, in the end, willing to destroy the future of their company just to keep it independent for a short while longer." Meanwhile, "They've ignored the wishes of their shareholders, employees and many now former key employees in killing (the Microsoft) deal."

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