Microsoft/Yahoo: The Shorter Version

Since people keep asking, here is the shorter version of my take on the proposed deal:

  1. It will happen. Neither company can afford for it to not happen, and no-one will outbid Microsoft given its dire need. About the only way Yahoo could keep it from happening would be to cut a quick deal to outsource its search to Google, which would be smart, savvy, and MicroHoo-killing — and almost certainly won’t happen.
  2. It won’t (really) matter. Some more scale in search will help Microsoft, no question, but the fundamental problem is that Microsoft is trapped between two worlds and has an absence of vision. That has been holding it back, not engineers and not ownership of Yahoo pageviews. Microsoft isn’t doomed — far from it — but buying a broken asset doesn’t turn it into a BrinPage-killer either.
  3. It’s good for Google. Two elephants mating are always good for confusing customers and helping incumbents, not to mention improving margins. You will see Google gain surplus search and advertising share as this deal comes together.

Related posts:

  1. Yahoo/Microsoft: Synergies, Google, Goldman’s Timing, etc.
  2. Microsoft Buying Yahoo Equity Stake: Yes!
  3. Facebook and the Microsoft Curse
  4. Yahoo: Finally Catches a Bid. Deal is Done.
  5. Google Buying Microsoft/Yahoo, and TSO Holes

Comments

  1. Vijay says:

    Agree with 1 and 2 but not 3rd. Why don’t you think it will create room for new entrants who wants some thing fresh.
    Long Google innovation – short stock

  2. To be clear, I feel precisely that way. Saying it is good for Google is not saying anything at all about new entrants. As I told a reporter moments ago, I actually think it’s good for new entrants.

  3. Shawn K says:

    If Micro$haft bought Yahoo, that’s all I’d need to know. There would be no further talk of ditching my yahoo address, it would happen and happen fast. Same reason I stopped goint to ESPN’s site every day, they partnered with MS and then the site started to suck. MS takes good things and makes them worse. Yahoo should NEVER allow a takeover by MS.

  4. Elephants mating. Nice :-)

  5. tinodino baraprumship says:

    This is not what I’ve heard from advertisers. They are desperately looking for an alternative to GOOG and are happy to see a bigger, more encompassing provider. This won’t confuse customers at all.

  6. Sure, but you’re confusing the journey and the destination. Where we’re going is a fine place — advertisers do want choices — but it takes time, layoffs, and integration to get there. You underestimate the time and effort involved at your investing peril.

  7. Greg says:

    Paul, prior to today you have discussed why the breakup of Yahoo might make sense. With a combination of Microsoft and Yahoo covering so much territory (software, consumer products, search, content, etc), I can only imagine the potential for spinoffs. Any thoughts on a potential breakup of Microhoo (assuming the takeover occurs in the first place)?