Rumor Mills Have Microsoft Making a Play For Yahoo Search by The Close of 2008
ADOTAS — As Google continues to distance itself from ineptly managed rivals in search, Yahoo looks for new a leader and tries to find scale. Of course, if Jerry Yang had handled Microsoft a little better, Yahoo and MSN would be ready to be betrothed.
But all is not lost, says Breakingviews, which makes some helpful suggestions. Yahoo should offer to buy the MSN unit. With Yahoo’s stock in the tank, trading at a third of Microsoft’s February bid of $31 a share, what does it have to lose? Its dignity? Oops, too late.
While worker bees at Yahoo, arguably, made the better mousetrap, Yang fiddled. Google has more than 60 percent share of the market share in search. With a larger base, Yahoo’s search algorithm becomes more effective and brings in more activity, which then makes it more effective…etc.
But how much would the deal be? Breakingviews says MSN is worth about $8 billion. Yahoo could offer stock, and Microsoft shareholders could reap any of the expanded benefit. Sounds like a shotgun marriage waiting happen. This wedding could reach the altar only if Steven Ballmer is serious about rejecting another Yahoo bid. That is an answer still in doubt.
