Microsoft + Yahoo! = Yahoo?

A Microsoft acquisition of Yahoo! makes no sense to me. No matter how you cut this the resulting company still weighs in at a distant second place to Google’s dominant position in both online search and online advertising. Great brand, no doubt. Great people, no doubt.

But, Microsoft is clearly capable of creating an equally competitive platform for appreciably less than the acquisition price they’ll ultimately offer the YHOO board. So, why haven’t they done that instead? The cultures are vastly different. The defections would be immense. The YHOO board is holding out for a slightly better offer (as they should) and MSFT is on an acquisition tear in the space (aQuantive/RazorFish and now Yahoo!).

Was aQuantive insurance in case a YHOO offer was rejected? Put another way, if the Yahoo!’s negotiate an acceptable Microsoft offer… how does aQuantive fit into the new equation? All of a sudden they have a migration nightmare further distracting them from competing any time soon.

Either way you look at it, Google’s defining the rules until they decide differently for themselves.

Explore posts in the same categories: MSFT, technology, Yahoo, YHOO

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