RSSMicrosoft Takeover Buzz Surrounds Yahoo Again as Cost Cutting Continues
By Scott M. Fulton, III | Published May 4, 2007, 11:35 AM
A story in this morning's New York Post - published by the would-be owner of the Wall Street Journal, which followed up on the story - has speculators buzzing yet again, stating #3 search provider Microsoft may be willing to pony up as much as $50 billion to buy out #2 Yahoo.
The Journal ran with the story this morning, crediting the Post with the revelation, and perhaps in so doing testing out the new pecking order in the business press, as Post publisher and News Corp. CEO Rupert Murdoch continues his efforts to lure shareholders of WSJ publisher Dow Jones into a takeover deal. Earlier this week, Murdoch offered Dow a premium well above its market price for shares.
Normally, that underlying fact might cast clouds of suspicion over the story's validity, along with the relative veracity of the notion that the two companies are "renewing" merger talks held last year - a notion which both companies earlier officially denied. But who needs facts when juicy rumors are enough to stir investors? By 11:20 am this morning, shares of Yahoo were trading up 19% in value on the NASDAQ Exchange.
The WSJ cited its own unnamed sources as saying the only folks at Yahoo who might be opposed to a merger with Microsoft would be its senior executives, including CEO Terry Semel and co-founder Jerry Yang. Yang's distrust of Microsoft is actually part of the historical record, having famously told a CNET reporter in 1997, "You never, ever want to compete with Microsoft. And even if they want to compete with you, you run away and do something else." That phrase has been used to open many a PowerPoint presentation by product managers proposing an "end-around" strategy to best Microsoft in one market space or another.
Also weighing against such a deal is the fact that Yahoo has just announced its intention to acquire the remaining 80% stake in online ad service provider Right Media. Yahoo is currently one of Right Media's customers, and so is Microsoft. The US Federal Trade Commission has adopted a more critical approach to weighing the efficacy of mergers between providers and their own clients, in the wake of the disastrous AOL Time Warner merger. There, exchanges between the merged entities own divisions were counted as revenue, in an accounting scandal whose impact to this day works against AOL's comeback strategy.
Yahoo actually did have an announcement to make this morning, though it may be postponing that news in order to keep a lid on the merger rumors. If Yahoo is caught saying nothing in public about the Post story, it might bring a premature end to its stock rise.
In any event, in his TechCrunch blog yesterday, Michael Arrington wrote that he was personally told by Yahoo senior vice president Brad Garlinghouse that Yahoo will close its Yahoo Photos service, to devote its resources in the photo sharing space to Flickr, a site Yahoo acquired in March 2005.
Yahoo had been operating both photo sharing sites separately, and Arrington cites comScore Networks ratings in past months showing Yahoo Photos with more than double the unique visitors at this time last year - 9.1 million versus 4 million for Flickr - but with Flickr's rise surpassing Yahoo Photos' fall last month, with Yahoo at 7.5 million and Flickr at 8 million.
As Garlinghouse told Arrington, Yahoo's plan was to announce that rather than merge both services' user bases together, Yahoo would adopt the thoughtful strategy of offering current Photos users channels for choosing Flickr or other competitive services, such as Snapfish or Shutterfly. Such a move would demonstrate Yahoo's internal belief that you don't smash two services together just to mash their customer base into a single, amalgamated paste.
i love that you said "amalgamated." I have no other contribution to this topic
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A yahoo buy would be a bad thing for both. Google is kicking a** because they have a great strategy that goes beyond what MS/Yahoo is capable of.
Look at google.com/yahoo/msn.com. All provide the same service, but Google is clearly tailored towards search foremost. All of google's "extra" services seem focused when you are on that particular site, but Yahoo/Microsoft have this complex, confusing pairing that goes on on their sites. I've always been pushed away from that lack of clear, concise expression.
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Microsoft Yahoo! Windows Live Hotmail Desktop Beta.
Yahoo! Live MSN Windows Messenger Chat Application Beta.
Whatever happened to simple s*** like: MSN Messenger or just plain "Hotmail"? ****ing idiots.
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Yahoo worth $50 billion?
lmao someone must be hitting the ole pipe pretty hard to come up with that number.
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Yahoo isnt worth it anyway. Pay 50 billion and then they will end up loosing that money in the end cause they will never make it up. Microsoft likes to buy, but should stick to what they are, a software company. And work more on there software actually working good.
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I'm against the merger as well.....if MSN was to buy Yahoo then who would the be able to compete with? Without competition neither product is going to get better in the future. Only worse.
I like Yahoo and I'm slowly starting to like MSN hotmail because I just found out that I can check my hotmail on my cell phone through text messages and I don't have to be connected to the internet to do it like the other services.
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I like Yahoo, MS and Google. I like the new MS Mail taking the place of Hotmail and I like the new Yahoo mail. Portal wise I like Yahoo better than MSN but search I like Google better than Yahoo but still use Yahoo sometimes as well as Ask. I use MSN when I want to check windows error and such. I think if MS bought Yahoo MS would be a force to be reckoned with in the portal market. I would just hope they keep Yahoo and MSN separate, that would be my only worry.
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I really like Yahoo! I really hate Microsoft. This will ruin Yahoo! if this happens.
Then I will hate Google and Microsoft and Yahoo!
I will not know what to do with myself. :)
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AOL?
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I hate yahoo and love MS! And also hate google! If this happens, I will still love MS and won't mind yahoo, but will still hate google. Ahh, what a great thing...lol
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what terrible thing has yahoo done to you/someone you know?
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Why do they want to buy Yahoo. If they want to buy a search engine. They could have bought Google when they went IPO in 2004
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NOOOOOOOOOOOOOOOOO!
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Hehe...
This is gonna be fun.
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Tell me about it, this will be great to watch!
My mind is already racing about merged products...
Windows Live Yahoo! Hotmail beta with Chat
Yahootmail!
Microsoft Windows Vista with Voice
LOL
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