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.
7 thoughts on “Is Yahoo Up For Grabs? Fred Speculates”
Acquiring Yahoo is the best way for MS to deal with google. This would be really an match made in heaven – Yahoo’s brand/content/advertisers/search technology and Microsoft distribution power (With the coming IE7 search box)
My money is on a Yahoo 2.0
No, Yahoo wouldn’t want to be acquired by Microsoft. Could you imagine the culture clash? Wouldn’t be nearly as bad as AOL-Time Warner but would be difficult to mesh the two cultures. Plus, with Yahoo’s recent successful Hack Day, I suspect they’ve overcome some inertia. They need to fix their legacy (Overture) paid search platform. The delays on that front aren’t helping the perception on Wall Street. Plus, they have great “web 2.0 / social media” assets like Flickr and del.icio.us. They just need to integrate and monetize these assets. Merging with Microsoft? No way.
Agree with Gopi. Culture of the MS LIVE is something like Yahoo and together MS and Yahoo would at least be able to *scare* Google for Halloween. Maybe.
Although I’m not the biggest fan of Yahoo (too many ads), it’s my opinion that Microsoft would “kill” any good remaining in Yahoo.
Doesn’t Microsoft already own their own search engine? A Microsoft owned Yahoo would quickly become “MICROnized” to the point that it would be no better than Microsoft’s current offerings.
(To bad Microsoft can’t purchase Yahoo and become “YAHOOized / ENERGized” to the point that they become “not so evil.”)
Well, Yahoo is still strong and it is better to have different options for end users. That will lead to further progress as happened in the past. Monopoly always sucks.
The acquisition of Yahoo by Microsoft has been debated for years. (John originally published this post in 2006.) Now, in 2008, Microsoft has made it’s move, publicly offering $44.6 billion for Yahoo. The deal isn’t nailed to the floor, apparently. It seems Microsoft is lobbying investors to take the money and run. Given the attrition among Yahoo’s management, the continuing bad press, and the declining stock price, it seems Yahoo investors may take Microsoft’s suggestion.
Despite the challenges inherent in integrating these two company’s product and service offerings, it’s Microsoft’s best move to make good on its promise to become one of the two major players in digital advertising. It’s a bold tactical move in a strategy that spans decades. It will be interesting to see the results.