Should Microsoft buy Yahoo?
Already in January of 2006 there were rumors that Microsoft was considering to buy Yahoo. Guess what, people are starting to talk about it again. Some time ago an analyst from Merrill Lynch declared: “the possible acquisition of Yahoo would be a strategic positive in our view.”
The acquisition would certainly help Microsoft to gain ground on the online search and advertising market segments. Google controls around 44% of all the search queries in the US (61% worldwide), while a combined MSN/Yahoo would reach almost 41%.
That being said, I am not sure whether Yahoo is the solution for Microsoft’s problems. The deal would bring more resources are a huge user base to the Redmond company. But would it make Microsoft more innovative?
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I think this would be disasterous for both (of course what do I know about M&As).
Check out Rob McEwen’s talk at the 2006 Denver Gold Forum. Its about gold, but its not about gold. Its really about how large M&A’s actually destroy value for nearly everyone except senior management:
http://events.onlinebroadcasting.com/denvergold/092506/index.php (His talk is the keynote at 12:00)
What you said about innovation struck me - I don’t personally think that Yahoo is still innovative and all that Microsoft would be buying is an established customer base and resources. Not a new path. That’s just my quick reaction (very quick!).
Yeah I agree, most of the big mergers destroyed value at large scale. Examples include AOL/Time Warner, Daimler/Chrysler and Pfizer/Warner-Lambert.