3 posts tagged “microsoft”
In the world of mergers and acquisitions, it's never over.
Folks are selling their Yahoo shares after Microsoft abandoned its efforts to take over the company last weekend, but they might want to start buying again in July.
Yes, Yahoo wanted more money than the company is worth (assuming one puts any credence in the valuation of Internet firms when the reality is that a new site can knock out a leading competitor in a couple of months). But it's clear that Yahoo will be worth even less if it follows through on an advertising deal with Mr. Potter, er, Google. That would represent total capitulation in the one promising area of future revenue for the firm. And that's also the one hook that Yahoo had for Microsoft: the potential to combine forces with Microsoft on the Internet ad front to compete with Google.
So, my bet is that Microsoft's Ballmer will launch another takeover bid when Yahoo's shares dip below $20 again. And since M&A kids love to ruin an acquisition target's holidays, send lawyers into double-triple overtime, and look for the bottom price, I fearlessly predict that in August, we'll all be covering this story--again.
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The recent hostile bid by Microsoft for the flagging Yahoo is taking on "It's A Wonderful Life" proportions. Unfortunately for the world's search engine, Google is casting itself in the role of Mr. Potter.
Witness one of the funniest blog postings of the last few hours by Google svp David Drummond, who enumerates dire warnings about a Microsoft--Yahoo marriage. Dripping with irony (dripping? he's soaking in it), Drummond complains that, gee, Microsoft is really big, it once had some like legal problems, and, well, heck, between Yahoo and Microsoft they have a way lot of IM and e-mail users.
In the words of John McEnroe: You cannot be serious.
Of course Drummond didn't say a word about how Google has a worldwide stranglehold on Web advertising, which is what all this is about. And he didn't mention that Google reportedly called poor little Yahoo (Mr. Potter-style) to offer its assistance in fighting off the Microsoft bid. (One can just imagine that conversation and how long it took George Bailey, er, Yahoo to realize it was about to be tricked into shutting down the old building and loan.)
All this hand-wringing, slapstick, and hilarity from Google over the mere possibility that it might, maybe, possibly, finally get some competition and have to hitch up its britches makes Google CEO Eric Schmidt look more paranoid than Dick Cheney. Maybe he's having nightmares about his days back at Novell.
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Microsoft has been after Yahoo for a while now, but this week the folks in Redmond made it official: They really, really like Yahoo. But do we really, really like the idea of a $44.6 billion purchase?
For tech veterans, the knee-jerk reaction would be to scream antitrust (remember when Microsoft was about to be broken up, and for good reason, until that journalist went and blabbed). However, if one is concerned about privacy issues, unfettered use of personal data, and an almost complete lack of price competition in the online marketplace, Google is more of threat these days than Microsoft. Just take a look at how Google manages Adsense--or rather doesn't manage it.
A Microsoft-Yahoo merger (er, I mean purchase) would provide some much needed competition for Google. While Google is innovative, it can also be flaky and tends to lack focus (notice how Google Earth, a great idea, crashes systems at the click of a mouse). On the other hand, Microsoft is steady, but it's never been that innovative (e.g., Web-based mail, custom online databases, online blogging software, online mapping software, heck, even its Web browser have all been me-too products). So competition from a Microhoo could force Google to focus and deliver better hands-on service to customers. It might even relieve fears that the online ad world will become a monopoly. And who knows? Microhoo could become a more innovative force in the online world.
Bottom line: "Woo-hoo!, It's a great idea."
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