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A deal between Microsoft and Yahoo is possible, if Ballmer and company is still interested

A possible deal between Microsoft and Yahoo could take place now that Yahoo CEO and co-founder Jerry Yang announced he will step down once a replacement can be found.

Yang will continue to work at Yahoo, a company he helped co-found, but the company will be in control of someone else.  He wished to remain CEO, but Yahoo's board of directors received too much pressure from stock holders over Yang's dismal past year of service.

There is a small list of possible candidates who will take over CEO, but UBS analyst Ben Schachter believes Microsoft CEO Steve Ballmer will eventually end up running the company at some point.

Before that can happen, however, it's likely Yahoo President Susan Decker, former AOL Chief Executive Jonathan Miller, former eBay CEO Meg Whitman and News Corp President Peter Chernin could become Yahoo CEO.

Regardless who becomes Yahoo's next CEO, that person will have to deal with constant rumors and talks about a possible buyout or takeover.  Yang believed the $44.6 billion offer last February "undervalued" the company, and turned down the deal -- the company only went downhill from there, with the stock value at a new five-year low.  

It's possible a rival company could come in and buy a stake in Yahoo, with Microsoft, Time-Warner, News Corp., and other companies reportedly interested in a possible deal.  If Yahoo chooses not to buyout the company, it's likely Microsoft will take over Yahoo's struggling search business.

"Jerry's resignation as CEO reflects failed promises he made while fighting off Microsoft's offers, and the board's displeasure with his go-it-alone strategy, in our view," said Youssef Squali, a Jefferies & Co. analyst.  "This vacuum creates an opportunity to bring in a new chief who will make bold strategic movies or more likely, open the door to Microsoft."

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Sole Purpose
By TomZ on 11/19/2008 9:12:29 AM , Rating: 1
I think many observers would agree that the sole purpose of demoting Yang is to allow a Microsoft acquisition, since this is clearly the best deal around for Yahoo shareholders.




RE: Sole Purpose
By piroroadkill on 11/19/2008 9:17:51 AM , Rating: 5
Not after he completely ruined their share price, though.

It was like watching someone answer an easy question on TV incorrectly, you're all sat there shouting "SELL TO MICROSOFT" and it somehow doesn't get through


RE: Sole Purpose
By bribud on 11/19/2008 10:01:39 AM , Rating: 3
Yep. He should be sent to detention block AA-23 for that whole fiasco.


RE: Sole Purpose
By quiksilvr on 11/19/2008 1:16:03 PM , Rating: 2
Why would Microsoft buy Yahoo? Just let Yahoo crash and burn like its going to. You not only get rid of the competition you save a crap load of money.


RE: Sole Purpose
By TOAOCyrus on 11/19/2008 1:26:09 PM , Rating: 2
Um because the real competition is Google and MS needs a bigger foothold in the search and advertising business to compete. If Yahoo fails Google will likely pick up the market share not Microsoft.


RE: Sole Purpose
By Murloc on 11/19/2008 5:17:05 PM , Rating: 2
and in countries where internet censuring is a reality (like china, iran, dictatorial governements), often yahoo is the only search engine/social network working.


RE: Sole Purpose
By Oregonian2 on 11/19/2008 7:20:30 PM , Rating: 2
Problem at this point is that Yahoo's worth less. I'd suspect a lot of people have left Yahoo, and most of the value of a company, especially a technology one, is in the people.

IOW - not only has the price dropped in market terms, the value of the company has dropped as well.


RE: Sole Purpose
By phxfreddy on 11/24/2008 6:04:24 PM , Rating: 2
GeeSus this guys game show shouting analogy wins my best phrase twist up of the day. ( sort of like the best rolled joint )......


Should Microsoft bother?
By 306maxi on 11/19/2008 9:20:13 AM , Rating: 2
Part of me thinks that anyone trying to come in and make inroads into Google's market share is fighting a losing battle and they'd be better off just leaving google to their market domination and to leave Yahoo to slide into obvivion.

A bigger part of me just wishes someone else would come in and disrupt Google's monopoly on the information market and keep them honest.




RE: Should Microsoft bother?
By iFX on 11/19/2008 9:44:06 AM , Rating: 2
I think they should. MS wanted Yahoo! for it's search engine which they still have and it is still a great product - except now it's 1/2 the cost. I say MS will buy them as quickly as a deal can be put together.


RE: Should Microsoft bother?
By Staples on 11/19/2008 10:55:44 AM , Rating: 2
I agree with you and the problem is that Google is the only innovator in search. Google corrects my bad spelling so well and perdicts what I probably meant that if for no other reason, I use it because of that. The rest are playing catch up perfecting their prediction algorithms while Google is adding new features. Another one is google maps is well integrated into their search. I see Yahoo and MS has implemented it since to their searches but once again, Google "invented" the idea and had it out long before anyone did.


RE: Should Microsoft bother?
By ElementZero on 11/20/2008 9:06:05 AM , Rating: 2
I agree, I mean just yesterday I put in the title to an article that I had gotten from the page - Google listed it as the #1 search result. Yahoo and Live Search? I didn't see it on either one of those - at least not before page 3 of the results.

Google clearly has a better algorithm for search, which is why they dominate the search market. I'd say even if Microsoft did buy Yahoo, they would still have the problem of a horrible algorithm - they really need to work on that IMO.


I doubt Microsoft will bite
By mikefarinha on 11/19/2008 9:09:42 AM , Rating: 2
Yahoo!s stock is currently on an upswing because of speculation like this. If I were Microsoft and I still wanted to buy Yahoo! I'd probably buy right now.

However I think Microsoft took a different strategic direction that didn't involve Yahoo! I think they are content to know that Yahoo! will be a steal for quite a while now and are just fine with letting them wallow in their own incompetence.

On the other hand if it looks like Yahoo! might pick a new CEO that actually might turn the company around, then Microsoft would probably be very interested in getting what they want from Yahoo! sooner rather than later.

A very interesting time for Yahoo!




RE: I doubt Microsoft will bite
By Lonyo on 11/19/2008 1:16:10 PM , Rating: 2
The fact that it's on the upswing because of speculation means that a potential new takeover bid is already partially factored into the share price.
MS will offer what they will offer, and it won't be a huge premium over the share price which has already factored in a takeover bid.


Ballmer isn't interested.
By soydeedo on 11/19/2008 4:54:25 PM , Rating: 3
"Let me be as clear as I think I've tried to be publicly: We are done with all acquisition discussions with Yahoo," Ballmer told shareholders. "We have moved on."

http://www.marketwatch.com/news/story/microsoft-sa...
http://www.informationweek.com/news/showArticle.jh...

Though he says they're still interested in a search-based side deal, and Ballmer has bluffed before...




Who qualifies for the job.
By crystal clear on 11/19/2008 9:29:38 AM , Rating: 2
Its not who should lead Yahoo rather whats/who is good for the future of Yahoo.

They need a dealmaker who can get the best deal for its shareholders & employees.

Deal are not made overnight neither are the legal processes that can be fast forwarded.

Any deal will come under the scrutiny of the D.O.J. which itself is an issue by itself & a slow time consuming process.

So you need a not only a deal maker but also a motivator & a leader who will lead & guide Yahoo during this transition period.

To put it on a time scale say 2010 for completion of the all necessary process/procedure etc.

During this period Yahoo has to restructore/reorganize & make it self financially efficient, plus bring in new products & innovate with marketshare in focus.

Not so easy as it sounds- a tough assignment for a CEO especially in an economy in RECESSION.

Yahoo has to compete & increase its marketshare & keep its identity.




"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007











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