Friday, May 02, 2008

The Microsoft-Yahoo deal

I saw a news iterm in the papers that Microsoft may raise its bid for Yahoo. Let's face it folks, both these guys need each other. Microsoft has tried its hand in the online game through MSN, acquiring Hotmail, Slate etc and these efforts haven't added up to much. The Yahoo bid is probably its last chance (since Google is not for sale or is too expensive) to establish a significant online presence. The alternative is to go on another spending spree and revamp MSN and other online properties.

For Yahoo, there are not too many potential acquisition candidates and time is running out. At one point in time, Yahoo was *the* first Internet destination for most people, Google now holds this prime spot. Unless Yahoo comes up with some killer app that increases its market capitalization, it could see a decline in value. And value on the Internet can sometimes decline dramatically. Remember Pointcast, which was valued in billions at one point in time and was eventually sold to news Corp for a mere $7 million?

There will be a bit of haggling, Microsoft will up its price for Yahoo and both these chaps will fall into each others arms and issue feel-good press releases.


ivazqueznet said...

Or... we could just let them both die already.

t.k. formerly known as തൊമ്മന്‍ said...

It is not correct for technologists to compare Google and Yahoo!. Google is a search company and Yahoo! is a media company primarily. If you want to read news you visit Yahoo, and to find something in the web you google. I know there are competing products, but the other choice sucks big time.

Somehow, Wall St. don't get this and they are on to destroy a great company that churns out profit every quarter, but not at par with its rival.

I want to see both Google and Yahoo! thrive, in their space, with little bit of overlap and competition. If Microsoft would let Yahoo! to function independently, without forcing the crappy Windows products down their throat, then everything will be ok. And Google will not be complacent, and will not grow into another Microsoft on the Internet.

Venky said...

@ ivazqueznet: Not much chance of either of them going away anytime soon.

@ t.k. formerly known as തൊമ്മന്‍ said...

I was not comparing Google and Yahoo but pointing out their respective places in the lives of Internet users. Your point about competition is well taken!

Sva Search said...

I dont think acquiring Yahoo is the panacea to all of microsoft's online problems...They need to come up with a better strategy