Microsoft & Yahoo Said To Be Talking Merger, Cooperation
The New York Post slants the move as a Microsoft reaching out situation:
Stung by the loss of Internet advertising firm DoubleClick to Google last
month, Microsoft has intensified its pursuit of a deal with Yahoo!, asking the
company to re-enter formal negotiations, The Post has learned.
The new approach follows an offer Microsoft made to acquire Yahoo! a few
months ago, sources said. But Yahoo! spurned the advances of the Redmond,
Wash.-based software giant. Wall Street sources put a roughly $50 billion
price tag on Yahoo!.
From the Wall Street Journal:
In what appear to be early-stage discussions, executives at Microsoft and
Yahoo are taking a fresh look at a merger of the two companies or some kind of
match-up that would pair their companies’ respective strengths, say people
familiar with the situation.
Last year, both sides talked, but Yahoo CEO Terry Semel squashed any idea
that Yahoo felt it needed to work with Microsoft. From a Financial Times
article last year:
“Microsoft taking over Yahoo – that conversation has never come up,” Mr
Semel said at a talk organised by the Newhouse communications school of
Syracuse University. “[We discussed] search, and Microsoft co-owning some of
our search. I will not sell a piece of search – it is like selling your right
arm while keeping your left; it does not make any sense.”
…. “My impartial advice to Microsoft is that you have no chance,” Mr
Semel said. “The search business has been formed.”
Indeed, there’s a less compelling case now for the two to combine for
technological reasons than several years ago. As I wrote about the idea recently
when looking at
Microsoft’s past moves in search:
An acquisition made tons of sense before Microsoft built its own crawler
and ad system. Now it has both. Getting Yahoo last year might have saved Yahoo
from upgrading its own ad system, since it could have used the new one
Microsoft built. But Yahoo has finished that work, as well. So a merger or
acquisition makes less sense — and the brand confusion potential remains
significant. But stranger things have worked.
Yahoo has largely
held its own against Google in search, while Microsoft has lost share.
However, Yahoo suffers from a perception with analysts that it is in trouble,
especially when recent
earnings disappointed them.
Of course, if Yahoo is for sale, Google may be interested.
Just had to throw
that out there.
Discussion now going at Techmeme, for more.
(Some images used under license from Shutterstock.com.)
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