When a stock price declines, speculation increases that a company might be vulnerable to an acquisition. Yahoo’s been beaten up lately, and Fred Wilson takes his readers through an exercise in who might be tempted to buy Yahoo. His speculation is that were anyone to move, the most logical suitor would be Microsoft.
Microsoft can afford Yahoo! and a combined MSN/Yahoo! would certainly be a stronger competitive player against Google, something that is clearly on Ballmer’s mind right now. That seems the most likely deal to me.
It’s surprising that Yahoo! finds themselves in this place. They made the right move to get into search with the Overture deal and are the only other viable competitor in search right now. Microsoft may get there, but they aren’t yet. But Yahoo!’s user and page growth is slowing and their monetization efforts are slowing too. And the market doesn’t like slowing.