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May 04, 2007

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CashForFlow

Typo: " Is the best way to do this to have Microsoft suck Google into the massive Windows/Office empire? Absolutely not." I think you mean suck "Yahoo" into the massive Windows/Office empire. What did I win?

P-

I wouldn't be least bit surprised if Yahoo isn't the co he's really going for. He's trying to build up the argument in the minds of regulators that if they won't allow this then you'll at least let me have THAT! Come on! He's already got the Yahoo! What in the world is he going to do with MSN????

Robert

REPEAT AFTER ME;

BUY GOOG !!!!!

25 X 2008 EPS

LOTS OF NOISE ESPECIALLY TODAY.
THE BARGAIN IS GOOG, NOT THE ALSO-RANS LIKE YHOO AND MSFT

King Troll

Henry, bro look I have to be blunt with you this time. Shut up already about what MSFT can and can't do and about no company can do everything.

Shall I remind you about GE and all their divisons. Have many different industries is GE competing in?

I don't even give a rat's ass about MSFT. I just think they can succeed.

Also I tried out the new Yahoo ad system. Yawn. So they give you reports that google has been already giving you. Do they bring in traffic? 16% comes from Yahoo. 70% from Google. Yahoo can suck my ...

By the way did you see that babe Stephanie from the Apprentice? That stupid fool won. Man she is fine looking, though.

CrossProfit

I don't get the spin-off angle. Here are five questions; serious answers should clarify things a lot.

1) How will this help MSFT contend with GOOG? A 60/40 split in search will remain 60/40 (or whatever the true statistics are).
2) Is YHOO tech to compliment MSN or vice versa?
3) What synergy is there?
4) Why would advertising dollars move from GOOG over to the newly formed entity?
5) Does MSFT see something in Panama that we are all missing?

Thanks

Disclosure: Comment by a CrossProfit analyst and may not reflect the opinion of CrossProfit.com.
http://www.crossprofit.com

Michael Urlocker

Henry...
Merger activity is typically a sign of market disruption... when managers can't deliver the kind of growth that the CEO or the public markets expect, mergers look like a good idea.

We've seen this in newspapers...telecom... and now software.

For more detail on the warning signs of disruption, here's a short video(8:56min)

http://www.ondisruption.com/my_weblog/2007/05/video_capitaliz.html

Mike
www.OnDisruption.com

King Troll

Hahaha look at that dude from Crossprofit trying to spam my boy Henry's blog. You are anonymous, you don't need to give a disclaimer.

Mike, shut up with that nonsense. Yahoo is a media company as is MSN. MSFT isn't merging with Yahoo for their great software.

kili

http://www.rediff.com/money/2007/may/04yahoo.htm

Microsoft wants to buy Yahoo


Software giant Microsoft is keen to acquire a majority stake in Yahoo Inc, according to media reports.

Microsoft had approached Yahoo a few months ago, but Yahoo -- valued at $50 billion -- had turned down the offer of a merger or an acquisition. However, New York Post says that the two giants have now reopened talks to forge some alliance to take on the formidable challenge posed by the Internet giant Google.

Microsoft plans to take Google head on with the acquisition of, or merger, Yahoo. Google has dominated the online search and Web advertising space so far and with each passing minute the search goliath is becoming stronger.

A deal between Microsoft and Yahoo will give both an edge over online rival Google, say media reports.

This would also hike the companies' share in the search advertising market to 27 per cent as against Google's 65 per cent, says the New York Post.

The talks that had failed earlier seem to have been revived following management changes at Microsoft and Yahoo, said the Wall Street Journal. The talks are currently said to be in early-stage discussions.

Microsoft is a giant compared to Yahoo, but the software major's revenues from online businesses are paltry. A pact between the two companies could help both, as Yahoo will help power Microsoft's online earnings and in turn will get a lot more MS-backed muscle in return.

Yahoo shares on the Nasdaq shot up by more than 13 per cent on the rumours of a possible acquisition. But, both, Microsoft and Yahoo have declined to comment on any market speculation, the WSJ reported.

Although there is a strong buzz that the two firms may merge or come into some sort of an alliance, the WSJ also said that the deal may fall through due to likely opposition from some top Yahoo executives like co-founder Jerry Yang.

Microsoft wants to dominate and monopolize. As long as google is alive, MSN will never be able to pull this stunt off. In search Engines, Google is still the best..Believe it or not!! I work for an internet company and I have seen that maximum number of clicks are generated thru' google only.


jerry wong,dont sell yahoo to microsoft.
jerry wong and yahoo are pride of oriental people.Rather jerry you buy out the microsoft.
All the north eat people..say "yahoo ki jai".
and lets set fire on microsoft's and bill gates's putla.


I do not think it will make a big difference for Google. The culture in the company which works on pure innovation and focus on products for the end user. The philosophy at Microsoft and yahoo is more on making money that is why they cannot match Google anyday in the medium term of 6-7 years at least. In the tech domain this is a pretty long time

Bruce Hamm

What is being overlooked here is the vertical side of the business (e.g. Autos category) and the display business that supports it. A combination would make MSFT-YHOO #1 in UU (by a WIDE margin) in almost every vertical - from sports to health to finance to news to entertainment content. It would be a must buy for all advertisers and command premium pricing. It also means reasonable leverage on the cost side with leverage on many of the same suppliers (e.g. AP). This strategy requires operating MSN and Yahoo as distinct and separate brands (which makes sense as they serve different audiences today). The leverage is in the sales story across both not on the changing the front end UX (after all users have made their choices today whether to use Yahoo or MSN; it would not make sense to scuttle those user bases).

Additionally, with their communication services footprint (think Yahoo IM/MSN-WL Messenger) they would have the abillity to look at Web-wide behavior and lay the foundation for behavioral marketing at scale, which would then allow them to increase yield on all the use where there is no context to lift pricing today (so an ad served in IM or Yahoo Mail lifts from $1 to $5 and beyond. This revenue ramp - which only comes from the combinatio - is real and significant.

There is a ton of thin analysis around the search battle (every share pt is roughly $100M), but it is the display opportunity that is equally interesting here (as it is 40% of the overall on-line ad market). And the capper on this is once you get good at raising the yield on display, you then have further justification to roll up other sites and services that have high use vs. renting traffic. It sets the stage for long-term growth.

davidliu

since when did the iq of the readership of this blog take a serious friggin nosedive? block some of the ip addresses of these people.

King Troll

Davidliu, who are you talking about. I hope you are not reffering to me because i'm a staple of this blog. If the blog had a mascot, I would be it. Who are you? Nothing but an unknown nobody trying to ride on king Troll's coattails.

jason

MSFT has some supporters like Troll so that MSFT is afraid of Google.

Fatty

Yahoo IM / MSN-WL Messenger together will be the dominant global IM network. Add in MS Silverlight which, (merger or not) will most likely swiftly get adopted by developers as superior to Flash/Flex & become ubiquitous in Web applications everywhere. Then Yahoo's just launched Flash based Web IM becomes tomorrow's Silverlight, no download, technically better feature rich Web IM connecting to all MSN-WL & Yahoo users - & you may just finally hit the decisive tipping point where all the world migrates to one interoperable IM network.

Dave

You are all so narrow sighted and focused simply on whats going on in the "now". The truth is that Microsoft is facing loosing more then just web service or search marketplace. There are projects going on a google that have to potential to revolutionize the way we thing of software and personal computers. The whole idea of a bulky stand alone OS that requires constant updating and service, or a 600$ software suite for typing letters and and giving presentations are on their way out. These Ideas are old and on their way out, and Microsoft simply does not have the right marketplace, talent, or systems to compete in the future world of 100% web based distributed grid computing. I actually think that it might not be the best idea for Yahoo but it would absolutely help to save Microsoft's future. I personally would rather see Apple and Yahoo! merge. I think that the cultures would blend a lot better then a Microsoft-Yahoo deal.

-This is just my personal opinion.

shinkdew

CNBC says that NYT has reported that they are discussing a joint venture, not a takeover by MSFT.

Victor

This would be an unmitigated disaster for both companies. Mergers of this scale are doomed to failure because the huge complexities of interleaving the roles of two companies with hugely differing cultures and business structures.

A merger of these two companies would be a huge positive for Google

Wil Schroter

I love when people make assonine claims like "Microsoft can't compete in the Internet."

That would go well with other assonine claims -

1. Microsoft will never beat Lotus 1-2-3 et all in office apps.

2. Microsoft will never beat Netscape in the browser war.

3. Microsoft will never beat Sony/Nintendo in consoles.

... I'll take that "loser" over any of their competitors any day of the week.

Dave

A few corrections:

You are all so narrow sighted and focused simply on whats going on in the "now". The truth is that Microsoft is facing loosing more then just web service or search marketplace. There are projects going on at google that have the potential to revolutionize the way we thing of software and personal computers. The whole idea of a bulky stand alone OS that requires constant updating and service, or a 600$ software suite for typing letters and and giving presentations are on their way out. These Ideas are old and on their way out, and Microsoft simply does not have the right marketplace, talent, or systems to compete in the future world of 100% web based distributed grid computing. I actually think that it might not be the best idea for Yahoo but it would absolutely help to save Microsoft's future. I personally would rather see Apple and Yahoo! merge. I think that the cultures would blend a lot better then a Microsoft-Yahoo deal.

-This is just my personal opinion.

Quote:
I love when people make assonine claims like "Microsoft can't compete in the Internet."

That would go well with other assonine claims -

1. Microsoft will never beat Lotus 1-2-3 et all in office apps.


2. Microsoft will never beat Netscape in the browser war.

3. Microsoft will never beat Sony/Nintendo in consoles.

... I'll take that "loser" over any of their competitors any day of the week.
"
-Response

My response:
1. Loosing ground to open office and googles writely every day.

2. Although IE was "force fed" into mainstream use, more and more windows users choose FireFox every day.

3.XBox is cool but not very profitable, oh ya and how about that Zune. Thats a real winner!

My point was less about the success of Microsoft in the past, and more about the lack of success for them in the future, if they don't do something now. Sitting still in the marketplace was not how Microsoft achieved their success. They had to be very adventurous and dynamic to make it all happen, and thats why they are in talks right now with Yahoo. They know what time it is, and they know they need to make a move before they get left in the dust (like they have done to so many others in the past). Most people don't actually prefer their Microsoft products, but rather feel like a captive audience when it comes to software choices on their PC. , and that creates an abundance of opportunity for a company like Google to move in. The big shots and thinkers at Google know that and thats why they are dumping the cash into these new programs, and the big shots and thinkers at Microsoft know it and thats why they are in talks. My point is not that Microsoft cannot compete on the internet in the future, or that they are about to fall apart. My point is they need to do something differently in order to not be thrown under the bus, and they are very capable of doing so. If someone form MS is listing to this, why don't you leverage all that ASP and .NET technology and port office to a web application, tie it into your users pass port account and provide it for free with limited storage for students and home use. :)

Victor

Will, I love it when people can't spell asinine you ass.

The first two examples you gave were on the desktop. yes MS destroyed everyone on the desktop, but that's because they were a... wait for it... monopoly!

If you think they're beating sony/nintendo or even apple, you've got your head up your asinine ass

Steve

eBay and Microsoft should make a joint bid for Yahoo. eBay should get all yahoo's ecommerce properties (Y!Shopping, Y!Stores) and email/im (to make Skype more complete), while MS should get everything else with Search being the highlight of course. MS should also get the Yahoo brand and dump MSN brand. eBay does not need the Yahoo brand and could use Skype to rebrand Y!Email/IM.

kousik

from the time i learnt about yahoo and microsoft, i am hearing microsoft will buy yahoo.. i will die hearing this..

TallTroll

>> I love when people make assonine claims like "Microsoft can't compete in the Internet."

Hmmm, MSFT have been trying to compete on the WWW fairly seriously. Their homegrown search tech is over 2 years old now, and really should be starting to show results, but it's not. Despite the huge investment made so far, it still sucks REALLY badly.

Granted, most people forget that Googles tech sucked for the first 6 months or so, but they seemed not to have so many problems fixing it, without the benefit of belonging (at the time) to one of the largest, richest companies on Earth.

The MSFT ad product is also awful, although that's mostly to do with the dearth of inventory. What traffic they do have is mostly reasonably cheap still, but there just isn't enough of it. People WANT to spend money with them, and they can't.

It's REALLY hard to spend £5k / month with them right now - Google have plenty of accounts spending well over that a DAY. Still wonder why MSFT can't compete online?

Incidentally, the reason the MSFT have trouble competing online is that they (and a lot of other people) seem to be under the impression that it's about software. It's not. Strange as it may seem, the WWW is NOT a software product.

The whole "browser wars" thing was a phoney. Who cares whether IE or FF or Opera, or any other damn browser has ascendancy? It's irrelevant. In the long run, the WWW is an information product, and the information flows most freely at Google, and that's why they continue to win

Victor

http://www.bloomberg.com/apps/news?pid=20601103&sid=aoG0KxNlwxbY&refer=news

Interesting article that mentions the characters involved in the MS-Yahoo merger talks

multimediamogul

It is true that MSN haven't made nearly as big an impact on the internet client-side as other companies, but they DID develop the entire .NET framework which powers alot of web based applications - in this sense it is somewhat about the technology (this is server side and not client side and isn't really effected by client side). Moving on...

Hypothetically if Microsoft were successful in taking over Yahoo (that is what it is - it doesn't matter if Yahoo says no, it's up to the shareholders) there would be implications in both the search engine advertising and SEO industries. Typically speaking (please feel free to correct me here) MSN and Yahoo are easier to optimise for commercial sites - Google focuses more on age and relevance. Assuming that Yahoo and MSN have dedicated userrs totalling 30% of the search engine market, this could create a good source of traffic for businesses through search engine results and advertisng if the sale goes through. There is a good write up of the SEO implications for small businesses on this blog.

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