Eye on Microsoft
About this Blog:
This is Shane O'Neill's blog about Microsoft's corporate strategy and its various software and services — the good, the bad and the ugly.
Microsoft and Yahoo's Search Deal Is Destined to Be
Microsoft and Yahoo are reportedly at it again. No matter how firmly Microsoft CEO Steve Ballmer says there will be no acquisition of Yahoo, it seems these two lovebirds can't stop flirting.
The latest is a report in The Sunday Times of London that Microsoft is in talks to acquire Yahoo's search business for $20 billion. Naturally, both companies have dismissed the report, with Fox Interactive President Ross Levinsohn, who the Times claims would be heading up such an acquisition, calling it "total fiction."
If that's so, then the fine folks at The Times are good fiction writers, given the amount of detail in the story about the terms of the proposed transaction.
But whether or not the Times report is truth or speculation or a bit of both, I think a Microsoft purchase of at least part of Yahoo will become fact some time in the near future. I have no concrete evidence of such a thing, but a couple signs point me in this direction.
First, it's no secret that Yahoo board member and uber-investor Carl Icahn has been itching for both a deal with Microsoft and new leadership at Yahoo. He recently bought 7 million more Yahoo shares for $65 million. Yahoo has cost Icahn hundreds of millions of dollars since he purchased 5 percent of Yahoo earlier this year. Why would you invest more money in an ugly duck unless you knew it had a good chance to turn into a swan?
Yahoo CEO Jerry Yang, who repeatedly resisted a Microsoft acquisition, is stepping down. Buying more shares implies that Icahn is happy where things are going. It will give him more influence on decision-making (He now owns 5.4 percent of Yahoo) and possibly allow him to pick a Microsoft-acquisition-friendly new CEO and set the wheels in motion for some sort of deal.
What we can glean from the Icahn's purchase of shares is that a Microsoft-Yahoo deal won't go down anytime soon. I mean, how obvious would that look? Can you say insider trading? But a few months down the road, I can foresee some sort of acquisition.
Yahoo needs it. The market capitalization of the entire company is $16 billion and its share price as of last Friday was $10.58 per share. It's share price was valued at $33 during Microsoft's original acquisition offer last spring, and dropped to a low of $9 per share just a couple weeks ago.
When did it hit 9 bucks? Right after Steve Ballmer said explicitly on Nov. 19 at Microsoft's annual shareholder's meeting: "We are done with all acquisition discussions with Yahoo …We did our best. We thought we had something that made sense. It didn't make sense to them. We've moved on."
The power of those words caused Yahoo's stock price to fall to $9 a day after it had jumped to $12 upon news that Yang would step down as CEO.
However, Ballmer did not shut out the lights and slam the door there. His parting words at the shareholders meeting about Yahoo have been hanging in the air ever since: "I think, an interesting possibility is to look at a search collaboration with Yahoo as we had proposed last summer. There's no active discussion on that front but we'd be very open to it."
Microsoft's mere 5 percent share of the search market is sticking in the software giant's craw and Yahoo is breaking down. Once Yahoo's board appoints its new CEO, I think those "active discussions" will begin in earnest. And this time a Yang-less Yahoo won't play hard to get.
Previous Post: Apple vs. Microsoft Vista: Who's Winning the Ad Battle?Next Post: Windows 7 Should Resist Resembling a Mac
Most Discussed Posts
Cloud computing has emerged as one of the most significant game changers to hit the technology landscape in the past 20 years. With this massive expansion of the cloud, the perception of the IT organization is shifting from a utility player to a change agent. This eBook breaks down five ways progressive organizations are using cloud-based IT Management solutions to help drive innovation and become more strategic, including: adding visibility and analytics, speeding up time-to-value, lowering costs, improving prioritization, and providing a blueprint for future cloud deployments.
Read the white paper to see how IBM helped Citigroup deliver new services and enhancements to their 200 million customers faster.
There are 3 ways to modernize legacy applications: rewrite completely, acquire packaged solutions or migrate existing code. This paper explains why it's best to migrate and how IBM® Rational® software can help.
Accommodating specific lines of business can result in a hybrid ecosystem of applications and servers. The resulting complexity of this architecture makes for an environment that is costly to maintain and difficult to change when addressing new challenges.
This whitepaper will help you to define a mobile device passcode policy. Security managers must attempt to reconcile two opposing goals. They must: 1) create a passcode policy that is strong enough to protect the device if it is lost or stolen, while: 2) not annoying users with needless length or complexity.
This whitepaper, authored by The Radicati Group, looks at the key reasons organizations should consider moving to a cloud-based archiving solution. Email archiving solutions enable organizations to store, monitor, and collect electronic data exchanged by their users to comply with internal policies and regulations.
ATERNITY will showcase a 30-minute demo on how Fortune 500 companies are leveraging its award-winning FPI Platform to deliver a user-centric approach to Proactive IT Management.
For businesses to move forward and tap into the ever-expanding universe of Internet users and network-enabled devices, it's critical to learn how to make the transition to IPv6. Learn the critical steps your organization must take to make a seamless transition-and keep your business world connected.
Learn how IT teams can protect against spear phishing tactics. Harry Sverdlove, chief technology officer of Bit9 offers a frank discussion about spear phishing - the most common technique used in today's advanced attacks.
Learn how to build a solid business case for your migration to Red Hat Enterprise Linux so you can run leaner, innovate faster, be more flexible and own the New Now.
Social media isn't about you; it's about everything around you. As you consider how your customers want to communicate with you, social media is something that can't be ignored. But what should your strategy be? Is social media "just another channel?" What kind of a plan makes sense for your contact center and for your customers? Join our experts as they share their insight and research results.
Hardware tokens were a popular method of strong authentication in past years but the cumbersome provisioning and distribution tasks, high support requirements and replacement costs have limited their growth. The additional log-in steps that hardware tokens require and the resulting user frustrations have limited adoption and make them impractical for larger scale partner and customer applications.
Sponsored Links
