Google hires controversial banker

Google has hired controversial banker Frank Quattrone as a strategic advisor to help meet the threat of a potential takeover of Yahoo by Microsoft.

At Credit Suisse, Mr Quattrone once earned $120 million (£60 million) in one year and underwrote some of the biggest dotcom boom flotations. Frank Quattrone was accused by Federal prosecutors in 2003, as the internet boom had turned to bust, of forwarding an e-mail to colleagues in December 2000 suggesting that it was “time to clean up those files.”

Over 25 years, Quattrone led teams at Morgan Stanley, Deutsche Bank and Credit Suisse, which were responsible for 400 mergers valued at more than $500 billion (£250 billion).

Last month, Quattrone announced that he and some former colleagues had started Qatalyst Group, a tech-focused investment-banking boutique based in San Francisco, to provide merger and corporate finance advice to technology companies.

Yahoo announced on Wednesday it had agreed to a test of whether it should turn over its Web search advertising sales to Google so it can focus on other efforts.

Analysts say Google appears to have held back from getting involved in the Yahoo-Microsoft deal until it had antitrust clearance for its own $3.4 billion (£1.7 billion) DoubleClick acquisition, closed a month ago. (source: Timesonline)

Yahoo and Google, the world's two biggest search engines, have announced a two-week experiment that will see them share advertising space. During the pilot, Google will be able to place ads alongside 3% of search results on Yahoo's website.

Analysts say the move is designed to frustrate Microsoft, which has offered to buy Yahoo for $44.6 billion (£22.6 billion), or extract a higher offer. The news came as both sides were reported to be forging other alliances.

Microsoft and News Corporation are discussing making a joint bid for Yahoo, according to the New York Times. The idea would be to combine three of the world's most visited websites: MySpace, Yahoo and MSN.com.

Microsoft criticised Yahoo's advertising trial with Google, saying any lasting deal would not be in the consumers' interests. "Any definitive agreement between Yahoo and Google would consolidate over 90% of the search advertising market in Google's hands. This would make the market far less competitive," Brad Smith, Microsoft's General Counsel said.

But Yahoo said the testing did not necessarily mean that "any further commercial relationship with Google will result". Microsoft chief executive Steve Ballmer on Saturday gave Yahoo three weeks to agree to the company's offer or risk having the offer lowered. (source: BBC News)