Microsoft could acquire Yahoo: What do you think?

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If you ever wanted to see a perfect storm of hyperlinked news, today’s revelation that Microsoft wants to talk to Yahoo about a merger is it. For those who haven’t already been deafened by twitter exclamations and email flurries, let’s walk through the news thus far. That bastion of responsible news reporting The New York Post, broke the story this morning. Apparently when Google picked up DoubleClick last month, the big heads here in Redmond decided it may be time to ante up in the acquisition game, and reopened a longstanding dialog with Yahoo. The ever-anonymous ‘sources’ were sure to include a $50b price tag, as well as reminding us that combining the search advertising shares of MSFT and YHOO would represent 27 percent against GOOG’s 65 percent.

David Kaplan of chimed in early, echoing the NY Post article, as well as reminding everyone of Jerry Yang’s avoidance of Microsoft products, and how much an acquisition could close the gap between Microsoft and Google. Reuters also covered the story with this choice quote from Peter Lobravico of Wall Street Access: “You can’t find a stronger buyer than Microsoft and while it would spur a lot of political and regulatory noise, everyone knows in the end that the deal would go through.”

Scott Beale picked the right graphic for Laughing Squid’s coverage, and also highlighted the 18 point jump in Yahoo’s stock on news of the negotiations. He also pointed out Eric Schonfeld’s post at The Next Net, which notes that the deal would have an air of desperation, and that, “The culture-clash of two companies could undermine any financial gains a Microsoft-Yahoo merger could produce.” Some astute opinion came from Henry Blodget at Internet Outisder, who recommends the two companies join, and then for Microsoft to spin off a Yahoo-MSN organization.

This questions raised by this morning’s news are far more interesting than the coverage of it, given that very little has actually transpired. So what are the questions then? What are your wildest fantasies about how a Microhoo/Yahsoft would exist, and what sort of combinations could make the new company insanely great?

The Discussion

  • User profile image

    I think it would be a great organistation... With Yahsoft manageing the developing countries where MSN has not targeted, while Microhoo Tongue Out  will do what it does best software and buy up other companies...

  • User profile image

    Don't feed the Trolls.

    The SEC should investigate, somebody made a ton of money on YHOO.

    The tabloid NY Post has no authority and few readers in NYC, Long Island's Newsday sells More papers in the city.

  • User profile image

    typical for a companys stock to rise like this just before a merger announcement. Look for it to happen w/in the next month I imagine.

  • User profile image

    $50 billion is a tremendous amount!  I think its a dangerous investment since there is alot of duplication in services.  Frankly I have seen alot improvement in MSN/Live over the last month or two..I'd like to see how this plays out.  In the meantime, I would rather see Microsoft invest internally and focus on acquiring add-value companies that will strengthen or fill gaps.

    Internal Investments: Accelerate development of Zune ecosystem, Invest in cost cutting measures for XBox manufacturering,  Develop a toy robot to go along with a vastly simplified version Microsoft Robotics Studio (potential to be killer application and reach a younger customer)

    Partnership Investments: VOIP providers such as Vonage (get connected to IM and Hotmail), PlaceShifter technology companies such as SlingMedia (provide network tuner and extender solution), AudioBook competitors to Audible (to combat exclusivity between iTunes and Audible).

    ..and save the rest of the money for those rainy days.

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