The YHOO-MSFT Crap Shoot
by John Paczkowski
Posted on June 16, 2009 at 10:00 AM PT
On stage at our All Things Digital conference last month, Yahoo (YHOO) CEO Carol Bartz said that a search deal with Microsoft (MSFT) would require “boatload of money,” and an outright acquisition even more. It doesn’t require a great feat of augury to see that an agreement between the two–at least at this time–isn’t that likely, as a number of analysts have recently noted. “In our view, the likelihood of a Microsoft-Yahoo search deal has gone down materially in recent weeks,” Collins Stewart analyst Sandeep Aggarwal wrote in a research note to clients today. “The Bid/Ask spread for the deal remains the single biggest hurdle followed by some disagreement on operational aspects/deal structure, in our view. We believe that a Microsoft-Yahoo search deal can happen but we are reducing the probability from 80%+ to 50%, and with the lowered probability, we restrain ourselves in terms of assigning any timeline.”
So, a 50-50 chance for a deal. Sounds about right, with Carol Bartz the wild card that could swing the odds as quickly and easily as she drops the F-bomb and with Microsoft as the desperate gambler looking to win back the deed to the search market it lost. Said Citi’s Mark S. Mahaney, “Although we view the likelihood of a major transaction as unlikely near-term, we continue to view Yahoo as the only logical long-term acquisition target for any company seeking scale in Internet advertising.”
Comments
I think Yahoo should just GIVE itself to Microsoft in exchange for a promise not to close the cafeteria, and a Zune for everyone.
Posted by Mac Beach at June 16th, 2009 at 2:33 pm