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Summary:

The big story this morning – based on a highly speculative report in The New York Post – suggests that there could be a $50 billion deal in the making, as Microsoft makes plans to buy Yahoo. Now WSJ is reporting on the deal, saying the […]

The big story this morning – based on a highly speculative report in The New York Post – suggests that there could be a $50 billion deal in the making, as Microsoft makes plans to buy Yahoo. Now WSJ is reporting on the deal, saying the talks are at very early stage.

UBS Research has some interesting stats on the combined company, if the merger does happen.

A combined MSFT/YHOO would have 38% of US search share (vs. GOOG 48%), 27% worldwide (vs. GOOG 66%), 12% of US total page views (vs. GOOG 3%), and 19% of US total minutes (vs GOOG 3%).

There are varied opinions on this deal, and to me it does seem like a bad idea. Marrying a company with Internet DNA (Yahoo) with another who can’t take a step forward without turning its neck twice (looking back at the PC) is not that easy. Will this deal become the 21st century version of AOL-Time Warner merger, and a high-water mark for the current boom?

  1. This will never happen!Do not even underestimate Jerry Yang and David Filo’s love to Yahoo! this brand!!!!(9%)50B$ isn’t quite different from (9%)44B$,money is meaningless to both of them,they are rich enough to ignore any temptation.But Yahoo! this brand means a lot~~~!Unless they get enough esteem(for example,merge MSN brand to Yahoo!,just keep Windows live and Yahoo!)

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  2. The key has got to be how MSFT would integrate the acquisition. Would they make it as independent as XBOX? and turn over MSN asssets (Tellme too please) to the Yahoo team?

    If yes, they will be able to deny the PC-glances.

    If no, it will be TW-AOL2.

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  3. well, it sounds like old news – everybody has wanted this to happen for ages, and integrating yahoo IM and MSN Messenger was a solid first step to combining users…live.com is a confusing brand, but yahoo would put a serious stamp on this new microsoft – the amazing one that is emerging now, as i type, as the sharpest minds work on cloud db, next gen os development, new tools like silverlight…and top researchers and architects would be a killer deal, plus all of yahoo’s services…

    my only request: put gary flake in charge as cto, please!

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  4. i dont think they have an option.. they got to make moves stay alive against google.. and even if this goes through..all that needs to happen is google + apple..

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  5. I agree with Peter Brockman above. If this deal happens it will really depend on how the deal is structured. I don’t see Yahoo! folding into Microsoft. If this is going to work the two brands need to be preserved and under the hood methods of capitalising on the merger will have to be explored.

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  6. Google is much ahead in the internet war. Unless someone builds a better application to kill adsense and better search engine, mergers and acquisitions won’t help. Both Microsoft and Yahoo are not making aggressive moves in these areas.

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  7. Eyeballs are worth more than search and software, so valuation is too low. Yahoo! is worth much more

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  8. if it occurs, the deal is a lot more about Microsoft competing with Google than Yahoo competing with Google.

    both companies have tons of page views, but also they’re sucking wind at search market share & monetizing search. still, combining the 2 companies market share in page views yields an incredibly large property to do SOMEthing with, and it would make sense to at least combine forces there and/or cut overhead costs of the combined groups (either via Yahoo/MSFT acquisition or Yahoo/MSN spinout… perhaps a better deal).

    so it might be hard to execute, but it’s not a bad idea. and MSFT is getting a bit desperate… with good reason. i wouldn’t be surprised to see it happen at anything between $50-70B.

    (however, full disclosure: i sold my YHOO shares this morning on the rumor, given the 18-20% bump in market price. don’t need to wait around for Q2 panama results now ;)

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  9. Google should buy Yahoo!…. ahem :-)

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  10. Yes, they should buy Yahoo and then Google should buy AOL.

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