Can Yahoo Get More From AOL?

Today investors wanted to see the news as good, even though the four-week average of unemployment claims rose to a two-and-a-half-year high last week, investors only focused on the fact that last weeks claims fell more than expected. Discount stores Wal-Mart [[wmt]] and Costco [[cost]] have their shares up today after reporting sharp increases in March sales and saying they expect sales to keep improving.

The Yahoo takeover saga continues. This time, people are guessing if it will be a Yahoo-Microsoft deal or a Yahoo-AOL outcome in the end. Last Saturday, Microsoft gave Yahoo an ultimatum where they basically said “accept our $446 billion takeover deal or we will launch a hostile takeover of your company”. Microsoft’s original bid is $31 a share. Yahoo, unsatisfied with the bid price, wants a better price instead. And today, the New York Times reported that Time Warner Inc.’s AOL may court Yahoo as well. Yahoo is certainly feeling the blush now, as it can now afford to delay the whole game, frustrating Microsoft. Now enter Google [[goog]], the top US search engine, into the game. Remember, they are all rivals and each is fighting hard for the $41 billion market for online advertisements. As a rival, Google won’t be happy if the Yahoo-Microsoft deal goes through, so in an unusual twist, it now ageed to help out Yahoo by letting the latter run a two-week experiment in the US to run Google’s ads alongside no more than 3% of Yahoo’s search queries. Yahoo [[yhoo]], owner of the most-visited website in the US, gained higher in trading on the Nasdaq today. The fact that Yahoo is displaying Google ads at all, is a sign of how badly its own keyword advertising strategy must be doing.

Lehman Brothers [[leh]] disclosed in a regulatory filing Wednesday that it liquidated three funds because of the tight credit markets and brought the assets of those funds, valued at $1 billion, onto its books February 29. The investment bank said it also purchased deteriorated assets valued at $800,000 from other distressed funds.

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