Google is not happy with Microsoft's offer for Yahoo and company is not hiding it's concerns, in-fact is very loudly and openly telling it to every one. Now why search giant Google is uncomfortable about this deal even combine market share of Yahoo and Microsoft is much below Google's market share in search market.

Google is worried, not without any reason, this is the only combination that can challenge it's search market supremacy and that too very quickly. Google and Microsoft both know that Yahoo has the most valuable assets in the internet world i.e. it's users, Yahoo has nearly 500 million users more than any other in the world. Ref. :- Yahoo @ 44 billion : It's Yahoo for Microsoft

This high user base of Yahoo and technologic excellence of Microsoft both combined together, is the biggest risk for Google. If every thing goes right, then this combination is capable of changing the online search marketing scenario within a time of few months . Google which currently is undisputed leader of search marketing and is gaining more share by every passing day could even find it difficult to maintain its existing market share of search marketing. Although possibility of any thing like this happening in next few months is less, but this can certainly happen in next couple of years.

People's are suggesting many options for Google to stop this deal either by supporting counter bid of some other potential buyers or by using anti-competition regulations. But these are less likely to happen because Yahoo assets are most valuable for both Google and Microsoft, for any other company Yahoo is not that valuable. Google itself can't buy Yahoo due to anti-competition regulations. Present search marketing share of combined Yahoo and Microsoft is not likely to evoke any anti-competition regulation.

The rescue

The one who can stop this deal is Yahoo itself, but seemingly financially Yahoo is not capable of doing something like that without hurting its future interests.

In my view one way to save Yahoo from potential merger is, Google can come forward to buy Yahoo's equity interests in Alibaba and Yahoo Japan and must give both entities a fundamental valuations which is certainly much above its current market values particularly that of Yahoo Japan. Fundamentally Yahoo Japan can be valued twice its market valuations and could give yahoo about $13 billions in hand when sold, this coupled with $5 billion from Alibaba's sales can give yahoo enough financial strength to avoid a merger by initiating a buy back and giving a exit opportunity to those stockholders who want to exit company at near current valuations. Paying a big dividend is also an option but this will not rescue company for any future takeover bid.

This article reflects personal view of the author and one must consult its financial adviser before making any investment decision