Blog Reaction: Microsoft’s Bid For Yahoo

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By Mike Nizza

It was a matter of minutes before news of Microsoft’s bid for Yahoo jumped from front pages to the vibrant world of technology blogs. On a normal day, Techmeme rounds up blog posts on numerous subjects, but the possible deal dominated its front page this morning, echoing the excitement of the writers.

Here’s some of the more interesting thoughts so far, and check Techmeme and Blogrunner for more.

Search Engine Land: The short story is this …

The short story is this. Search is important, and Microsoft has failed to build much less maintain search share while Yahoo has held steady against Google.

Mashable: A ‘HUGE’ Deal for ‘MicroHoo’:

I’m damn sure they’re seriously mulling it over. The cold harsh truth that Google is beating both companies in too many fields will definitely be a factor in this one.

TechCrunch: Scream ‘WOW,’ Then Analyze:

This is an advertising play for Microsoft. It wants to combine the scale of its recently acquired advertising networks with that of Yahoo’s, along with Yahoo’s vast consumer reach.

Seeking Alpha: Explaining Microsoft’s Sudden Big Merger Appetite

On the surface, Microsoft’s bid is out of character, but given acquisitions like aQuantive it’s clear that CEO Steve Ballmer (right) is thinking a little like Oracle CEO Larry Ellison.

[…] Microsoft said the deal is about scale … Indeed, the combinations of assets from a combined Microsoft and Yahoo is a bit staggering. MSN, Yahoo, Flickr, Zimbra and a bunch of other properties would be under one roof. The big question: Can Microsoft manage it all?

Between the Lines: Good Timing for Yahoo, Too?:

The timing is right for Microsoft and Yahoo shareholders. Yahoo stock is depressed and the outlook for price growth isn’t optimistic. “We believe in this combination more than ever and we made a great offer and we look forward to the dialog,” Johnson said during the call.

PaidContent: Key Facts and Shades of Murdoch:

It is, as I just heard Andrew Ross Sorkin put it, “Murdoch-ian”â€an offer that you might think would be nearly impossible to refuse or to nudge higher, although folks are already hard at work looking for an extra few dollars.

DealBook: AOL, a ‘More Enticing Prize’?:

Google may be among those who take a fresh look at AOL, whose businesses include an advertising platform as well as an Internet service and a Web site. Google already owns 5 percent of AOL, and it may feel compelled to make a dramatic move now that two rivals, Yahoo and Microsoft, may be joining forces.

But it is far from clear whether Google actually needs to own AOL; so far Google has had lots of success competing on its own.

Silicon Alley Insider: Questions and Answers

Two key questions following Microsoft’s semi-hostile $31 offer for Yahoo:

1. Will other suitors emerge, triggering a bidding war? 2. Will Yahoo be able to force Microsoft to raise its offer?

Our initial answer to both: “No” and “No.”

The Register: The Difficulty of Merging Two Web Giants

On the face of it, the logistics of a merger are nightmarish, particularly given that Yahoo! has multiple integration projects of its own on the go. Add to that the very real likelihood that a combination would be wading through the regulatory process for months at the very least, and it seems that even if the deal goes ahead Google will have plenty of time to get its response ready.

All About Microsoft: Microsoft, Before and Possibly After

Windows and Office still are how Microsoft makes the bulk of its money … If Microsoft adds Yahoo to its mix, overnight, online services †and specifically online advertising †will become more than a struggling side business for Microsoft.

Fake Steve Jobs: Microsoft as Star Trek Villains

This is classic Borg. They wait. And wait. And wait. They press on you. They look for weakness. They keep pushing and pushing. They step on your oxygen tube, just a little, so slightly that nobody can see it but just enough to make it a little harder for you to breathe. They watch you grow weaker and weaker. They let Jerry Yang do his stupid 100-day review. Then they pounce. Now they’ve rounded up Facebook and they’ll soon have Yahoo, as long as government regulators don’t block the deal, which they probably won’t given the current administration. Oh, and gee whiz — guess who just missed their earnings number and has lost about $40 billion in market value in the last few months? Hmmm. Seen this movie before?

Beastmaster, I hate you. But I tip my cap to you too. Deep down, we are more alike than we are different.

I don’t care what Microsoft does as long as they can impove their stock option prices. The Street has been hammmering them badly lately for no good reason. I’m my investment get hammered by bozo’s who are into speculating.

Microsoft. Do whatever you need to do to get your values up, so I can at least break even!!!

Thanks, A concerned investor

†Posted by Capt. Concernicus

Two losers do not a winner make.

†Posted by Dan Reiss

What the hell is Microsoft thinking? They need to avoid any business where they don’t have an untouchable 95% marketshare. Zune, Xbox, and Live Search have all been embarrassments that have bled cash. Microsoft has never made any noise as a newcomer in an established business. They should use $44 billion to improve on Vista’s 27% approval rating.

†Posted by Craig

Another merger/buyout. . .more layoffs. Both companies are successful enough now. Do we really need this? Oh, I forgot about the main factor: greed.

†Posted by Matt

The carnivore club of the Software Industry seems to be looking for more flesh to devour. You, the consumers flesh. “Free Market Competition” is a farce. If your product stinks, just buy all of your competitors and force your poor schmuk customers to use yours anyway.

†Posted by jack lenahan

This has to be about scale, because I can’t see what’s in it for the consumer.

Bottom line: I don’t want to use Yahoo any more or less based on whether or not Microsoft is going to own it. Google already offers me a perfectly acceptable search platform, and its mail and photo services are already integrated seamlessly. Not so much for Yahoo, MSN, Hotmail, Yahoo Mail, Flickr, et. al.

This is about Microsoft trying to buy up market share, and that’s it. But, sure, maybe one day Gates will sit down and figure out how consumers might benefit from it. Until then, where’s my Google Phone?

†Posted by Mikey

I’m waiting for the antitrust investi… oh wait, this is the US. Monopolies don’t exist.

Craig (#3), I don’t think bleeding cash was ever Microsoft’s concern. I think they’ve always been the newcomer to established markets, and not the pioneer. See (Windows), Office, IE, etc. In any case, I would argue that of the three you listed, Xbox has been a success. It’s not about the red rings of death and multiple hardware failures, but about establishing itself in a major market *throws chair at you*.

†Posted by Kevin

The best thing one can say about this in terms of Microsoft shareholders may be that they’re only paying $44bn. Time Warner paid $164bn for AOL; a comparable asset with similar prospects. Both Microsoft and Yahoo shareholders should probably be selling right now.

†Posted by Hippolito

Google should be thrilled. MS has proven over and over again that they are only good at operating systems and office software. Yahoo will become a has been within 12 months of being acquired.

†Posted by CAD

It seems like Microsoft’s best bet would be to buy Yahoo! and then shred it, leaving Google with an anti-trust problem. Once the feds step in, then Microsoft can re-launch a service into the new playing field. If they are really good then Micro-Yahoo services can crash and burn while they claim that they are victims of unfair practices by Google. That is simply brilliant long-term planning.

The only other option would be to take huge losses in the sector in an attempt to gain market share. I suspect that this second strategy would cost them more than $44.6B and is less likely to succeed. They aren’t dummies!

†Posted by Adam Hammond

How would it make senses for both Yahoo and Microsoft shareholders to be selling?

for Microsoft shareholders, this offer will depress the price for a while, and it has already lopped a few bucks off the price of a share - why sell low?

As for Yahoo shareholders, well their stock just leapt to $28 a share this morning, and Microsoft is offering $44 per share. Why would you sell anything to anyone for $28 when someone else is standing there waving $44 at you?

And Craig in #3 “Microsoft has never made any noise as a newcomer in an established business.” - As Kevin has pointed out, that’s not even close to being true. Whither Wordperfect, Lotus 1,2,3, Netscape etc.?

†Posted by adovelikeboy

Ha! This is just another MicroMess ™ in the making. Microsoft is notoriously bad at managing it’s vast tentacles in the online world and adding yet another brand to the stable with overlapping businesses is not going to be good for MicroHoo, its employees, or the investors. Why have two teams to run Hotmail/Ymail? Why have two teams to run WLMessenger/YMessenger? Why have two teams to run MSNMoney/YFinance? Can you see where this is going? They are essentially paying 45 billion for the Yahoo customers and they’re going to cut out the employees from one side or another. And don’t get me started on the branding/naming. Windows Live Organic Yahoo Hybrid Edition? And can we talk about internal political nightmare…when I worked there it was a pain in the ass to get anything done between various fiefdoms. Now you have two dysfuntional kingdoms with their own fiefs, vassals, lords, and whatever…this is going to be fun to watch.

†Posted by Former MS employee

Let me clarify–they’ve never made any noise in something that isn’t easily bundled with their Windows monopoly.

†Posted by Craig

It is only hubris for Microsoft to believe they can improve Yahoo. Since they have no ability to innovate they must try to buy their way into technologies. Their record is deplorable. This will be another loser for Microsoft following hard on the heals of there HD DVD defeat.

†Posted by Al

why would ms want to waste $44b on a depreciating asset like that?

†Posted by elroy

In some ways, this buyout makes sense. Yahoo cannot find its own way any more. Microsoft executives can dissect Yahoo take the best talent and properties, and fold these into Microsoft proper and msn.com.

Jerry Yang looks like a deer in headlights when he makes public announcements.

†Posted by billso

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Blog Reaction: Microsoft’s Bid for Yahoo

Some of the more interesting thoughts so far.

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