Google expresses an interest in Yahoo

Google, the world’s largest internet company, is keen on extending an advertising partnership with Yahoo.

The two companies recently shared advertising for two weeks, however, many analysts believe the trial was more about preventing a Microsoft bid for Yahoo.

Microsoft withdrew its bid for Yahoo last weekend. Steve Ballmer, Microsoft’s chief, formally withdrew the offer in a letter to Jerry Yang, Yahoo’s co-founder.

Microsoft wanted to buy Yahoo to gain a bigger portion of the online advertising market, which is valued at $40 billion a year and is expected to double to $80 billion a year by 2010.

A combination of Yahoo and Microsoft would have helped the software group to compete more effectively with Google.

Google co-founder, Sergey Brin, said they had been in talks with Yahoo and are very excited to be working with them.

Google’s chief executive, Eric Schmidt, added that the two week trial with Yahoo had been successful. That’s a good basis to talk to Yahoo further, added Mr Schmidt.

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