Google: Developments in China Coming “Soon”

Last week, Chinese officials reported that Google was in talks about their threats to leave the country (or only partially) if they’re forced to continue censoring search results. Also, Chinese officials reported that Google was not in talks with the government.

Google CEO Eric Schmidt declined to comment on the state of negotiations a conference in the United Arab Emirates today. However, he did say that “we’re in active negotiations with the Chinese government, and there is no specific timetable,” although he promised “Something will happen soon.”

Google announced a hacking attempt targeted at the Gmail accounts of Chinese human rights activists in January. They suspected that the attack may have originated in the Chinese government on some level, and announced they would no longer agree to censor search results. However, nothing has changed—yet.

Soon after Google’s statement, US Secretary of State Hillary Clinton commented on the matter, urging China to review the breach as well. This prompted suspicion that Google’s withdrawal threats were directed by the US government. Schmidt denied that today:

“The Google action was not in any way advanced or coordinated with the U.S. government except post-facto,” he said in response to questions. “Google’s discussions are with the Chinese government, and they do not involve the U.S. government. The U.S. government’s doing its thing unrelated to Google.”

Schmidt’s statement is pretty open-ended: “something” and “soon.” What kind of timeline do you think we’re looking at—and what do you think the end result will be?

Google and Yelp a “No Go”

As the great Yogi Berra once said, “It ain’t over ‘til it’s over” and the deal between Yelp and Google is the latest proof of that. In the Internet space in particular an extra dose of caution is recommended when hearing a ‘rumor’ (i.e. something that comes on ‘good authority’ and is almost a done deal) to take a step back and give the rumor a chance to breathe. Unlike a bottle of fine wine, though, rumors in this space often go south but that’s just part of the space.

The latest ‘event’ that received the treatment of a lot of attention but didn’t finish as rumored was the ‘deal’ between Google and Yelp. Last week we told you of TechCrunch’s report on the imminent Google deal to purchase Yelp.

Google and Yelp are in advanced acquisition negotiations, we’ve confirmed from multiple sources. And while the deal isn’t done, we’ve heard that it’s very likely to close. The price is supposedly at least $500 million.

Well, TechCrunch reports that this deal has derailed and that Yelp is walking away from a significant offer.

The deal was, as we wrote late last week, in the later stages of negotiation. The two companies had agreed on a price – around $550 million plus earnouts – and were working through the final details of the acquisition.

Then something happened that made Yelp reconsider the deal. Over the weekend they notified Google that they were not going to sell, say multiple sources.

That something must have been pretty big and pretty sudden. These negotiations take a considerable amount of time to get to the point where an anonymous source gets the itch to leak the ‘truth’ to the Internet media press. This information was leaked but apparently there were a few landmines that were not seen or not considered ‘deal breakers’.

One can speculate all day long as to why this deal fell apart but we are not going down that road. In fact, until something is officially noted by either company (which may or may not happen) we’ll sit on the sidelines for now.

So with everything in life and, in particular the Internet marketing industry, step on the rumor mill with your grain of salt handy. As for now let us know if this is good news that the deal fell through or were you thinking there was some good to come out of the acquisition.

Google To Buy Yelp For $500 Million?

TechCrunch is reporting that Google is “advanced acquisition negotiations” to buy Yelp for $500 million or more. TechCrunch has been generally correct about many of the rumors it has reported recently (i.e., Google Phone) so we should take this seriously.
Yelp has raised a little over $30 million over several funding rounds. Revenues are heading toward [...]

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Turkey Suing Google for $47M in Back Taxes

Dear World:

Google is advertising in your countries.

Duh.

Turkey has recently determined that Google owes them $47M US (71M Turkish lira) in back taxes on advertising sold in Turkey. The government maintains that because Google sells advertising in Turkey and maintains an office and registered subsidiary in the country.

Google, on the other hand, points out that “it runs its ad network operations from Ireland and thus is not obliged to pay taxes in Turkey merely because it owns a subsidiary there.” The suit recognizes that bills and checks (or should I say cheques?) for such advertising are addressed from/to the company’s European headquarters in Dublin.

Says TechCrunch:

In a statement, Google said it is acting in accordance with the tax laws of every country in which it operates, including Turkish laws, and that its negotiations with the government on this issue are ongoing. . . .

We’ve also been in touch with a Turkish lawyer, who tells us the government is making a valid claim, pointing out that Google has set up a full-fledged company called Google Reklamcılık ve Pazarlama Ltd. Şti. (which means Google Advertising and Marketing Ltd.) in Turkey rather than what he refers to as a ‘liaison’ branch. Had it done the latter, says the lawyer, the company would have had to pay very little or no taxes at all.

Personally, I’m a little skeptical of the Turkish government’s claim, mostly because if Google has really been taxable all this time (and since Google is the #1 online and search ad company in Turkey), they (the government or Google) would have figured this out a lot sooner. Did the Turkish government just figure out they could tax Google? Or is this, as TechCrunch points out, just a bargaining tactic tor force Google’s negotiations to go faster?

(Note: the Turkish government says they’ve determined this after a year of investigating. Again, a year? It doesn’t take a year to figure out that someone should be paying you taxes, especially not if a Turkish lawyer can figure it out in one email. If they really wanted the taxes, they could have indicated that Google should be paying taxes at the beginning of the investigation instead of stalling a year while Google racked up more income that they could penalize. I think being dishonest like that should be reason enough to lose the suit.)

Here’s what I think: if you really want to tax Google, countries of the world, then do it—but pass a new law that they can’t get out of. Don’t try to cobble together a legal argument, backform your present laws that may or may not fit the situation, or stall an entire year to try to squeeze more out of them. Because, after all, taxing Internet companies for selling stuff in your jurisdiction has worked really well in New York, North Carolina, etc.

What do you think? Will Turkey get their cash, will the case get thrown out, or are they really just hoping for Google to settle for any amount? Will this make Google reluctant to operate in that country in the future?

Bingahoo Delayed a Month or Two (or More)?

For all of the drama and the back and forth of the Microsoft and Yahoo courtship from the summer it’s almost laughable to learn that the two still don’t have all the details ironed out yet. The deal that was originally supposed to be signed off on October 27th isn’t quite ready for the super huge pens that were used in the photo op pictures from July. We are now left to wonder what the heck wasn’t figured out before these two giants said “I do” in the summer.

Yahoo tells about the delay in getting the scheduled signing done in an SEC filing that the Business Insider reports

In their original July 29 agreement, Yahoo and Microsoft said they would sign finish negotiating the search deal by October 27.

“But,” reads the filing, “given the complex nature of the transaction, there remain some details to be finalized.”

“The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible.”

You have to wonder what these details are exactly. What if there is a big “Ooooops!” discovered where something was not ‘ironed out’ in the original negotiations? I can’t imagine such a thing happening but stranger things happen every second of every day so why not?

So what did Yahoo have to say on this one?

“Microsoft and Yahoo! are committed to this agreement and believe this is a highly competitive deal that is good for consumers, advertisers and publishers. We have made good progress in finalizing the definitive agreements. Given the complex nature of this transaction there remain some issues that need some additional clarity and definitive details. So, the teams at Yahoo! and Microsoft are continuing to work on the remaining details, and we have mutually agreed to extend the period to negotiate and execute the agreement. We plan to do this as expeditiously as possible. Both companies are optimistic that we will be able to close this deal by early 2010.”

Early 2010?! That’s not just missing a deadline that’s blowing past it and leaving it for dead. What would have been nice is if there was a definition on what early means. Of course, the longer it takes for the two sides to dot the I’s and cross the T’s the longer and more delayed the start of the regulatory process becomes thus possibly making the actual union even later than originally thought.

So don’t get too worried about what will or won’t happen when this deal is finally put in place. Who knows the US may even have some kind of healthcare deal in place before that happens.

Microhoo Cares Already!

Just so you are prepared, this post is entirely speculation and conjecture based on my following the Microsoft and Yahoo “drama” that has been unfolding over the past century or so. As you may guess from the title, I have had enough. Either make it happen or don’t. Put us out of our misery here.

Think about it. If it takes this long for these two entities to figure out if they can tolerate each other then what will it look like when they live together for real? This whole thing is starting to feel like a marriage that everyone mutters under his or her breath, “I give this one 2 miserable years max”. Couple that general feeling with what is probably a remarkably complex corporate prenuptial agreement and you have a recipe for cordial roommates at best and a complete train wreck at worst.

From what I have seen thus far with the egos and the ‘personalities’ that are involved at the top of these negotiations this whole thing is starting to smell bad. Ben Franklin once said that “houseguests — like fish — begin to smell after three days”. I am no Ben Franklin but I will make a modern day adjustment to this concept by saying that “Microhoo is starting to stink even before anything really happens”.

This endless silliness of “He said, she said” and talk of boatloads of money and media speculation is making this proposed union one that appears more and more unholy before it is even a reality.

In light of the Google / AOL ‘investment’ that turned out be such a winner let’s fast forward a few years from now and imagine. As with any of these kinds of arrangements you have three possible results: wildly successful, ho-hum results or complete disaster. Personally, from my seat here where I have literally NO insider information or insight, I think that if this ended up with ho-hum results then it would be considered a success. The idea of these two companies playing nice together in a shared sandbox sounds as likely as peace in the Middle East. Oh, and there is that little detail of the competition. I might even think that Google is secretly rooting for this deal to happen because of the plus side for them when it all falls apart and the Internet media picks over carcass of the Microhoo we never knew.

At this point, just let your yes be yes and your no be no. We’ve had enough already. Microsoft, you are a software company that is about the desktop. Yahoo, you are …… well, I guess we’ll find out when you rebrand in the fall. Go back to your rooms and concentrate on what you do well so we can all move on. Actually, I take that back. If you two actually do decide to “make nice” it will give all of us something to write about when nothing important is happening.

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