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Microsoft is willing to lay down $50 billion for Yahoo Inc. say reports

The search and advertising industry could change drastically over the next year if Microsoft has its way with Yahoo. In the last several weeks, it was well publicized that Microsoft and Google went head on in a bidding war for Internet advertising giant DoubleClick. Eventually, Google won and settled with DoubleClick for roughly $3.1 billion -- a sum that had analysts questioning Microsoft's true motives.

At the time of the acquisition, Microsoft had roughly $25 billion of available cash in its bank; more than double that of Google's $11.9 billion. Observing these figures, it was odd to see Microsoft back out of a deal it could easily win. "The best side to be on in a bidding war is the losing side," said legendary Wall Street tycoon Warren Buffet. Buffet is implying that the loser in a bidding war has forced the winner to over-pay for something.

Today, Forbes is reporting that Microsoft is in negotiations with Yahoo for a possible acquisition that could be worth $50 billion. According to the report, Microsoft is feeling greater pressure to compete in the online advertising space. Just recently, Yahoo announced its acquisition of online advertising firm Right Media for $680 million. While this is far from Google's $3.1 billion expense on DoubleClick, it does indicate that Yahoo is already quite a force in online advertising.

Another sticking point for Microsoft is the fact that both Google and Yahoo are ahead of the game when it comes to search. Microsoft has been playing catch up to Google and Yahoo with MSN Search, but having Yahoo under its belt would surely set the company onto a different playing field altogether.

Despite an impending deal with Yahoo, Microsoft hasn’t taken its eyes completely off the Google – DoubleClick deal. Microsoft is loudly voicing its opinion against the deal and has asked regulators to carefully monitor the acquisition.

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Why buy Yahoo?
By Mitch101 on 5/4/2007 11:09:51 AM , Rating: 5
Any bids on K-Fed's search engine yet?

RE: Why buy Yahoo?
By zombiexl on 5/4/2007 11:15:46 AM , Rating: 5
I'm not sure whats funnier. The fact that you had that link ready to post or the fact that I clicked it thinking it was a joke and it really exists.

RE: Why buy Yahoo?
By jtesoro on 5/4/2007 11:53:13 AM , Rating: 2
It got me curious as well! After some looking around, this thing isn't as K-Fed centric as I initially thought. There's similar sites with other artists such as Meat Loaf, Maroon 5, etc.

From what I understand, the thing which runs this is a search company called Prodege that uses ads to generate revenue (what else?). What makes it different is that it partners with other organizations to get people to use the Prodege engine.

The idea is that organizations (in this case K-Fed company or whatever it's called) leverages their property (K-Fed) to get people to use the specially branded search engine ( In return for building traffic, Prodege shares ad revenue with them.

Interesting to find out how this is working out. Hmmm, maybe I'll use the Maroon 5 search site to "google" for some stats!

RE: Why buy Yahoo?
By tuteja1986 on 5/4/2007 10:45:22 PM , Rating: 1
Does Microsoft wants to kill themself... 50billion for Yahoo is supper stupid. I think Microsoft should spend the cash on trying to enter new market. This company has lost its path and has to much cash in hand and don't want to do so they are so crazy into buying Google. Why don't they try to buy sony instead... that would make teh crap loads of money instead of buying Yahoo.

RE: Why buy Yahoo?
By TheDoc9 on 5/7/2007 11:37:14 AM , Rating: 2
I have to agree, they could learn a lesson from the tabacco companies.

RE: Why buy Yahoo?
By listtwist on 5/4/2007 1:55:17 PM , Rating: 2
Go to and you discover a nice little 'enhanced by Yahoo Search' logo. It appears that the company provides someone in the middle between organizations and a search engine to take care of the development & hosting of a search site (and take half or more of the ad profit).

RE: Why buy Yahoo?
By RW on 5/4/2007 9:01:32 PM , Rating: 2
I don't see why all this fuss about buying online advertising company's ?
I can understand that they could win some money from online ads but from an user point of view the online advertising is worthless and annoying and I've just got used to ignore the ads as they are not even on the webpage I'm visiting.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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