July 14th, 2008
Again, why does Microsoft want Yahoo?
I’ve tried to keep my postings about MicroHoo to a minimum, as it’s hard to separate the posturing from the reality.
But after pondering this past weekend’s latest back-and-forth — where Microsoft offered yet again to buy Yahoo’s search business and Yahoo tried to convince the Redmondians to come back and make another offer for the whole company instead — I kept coming back to the original question about this whole transaction. Why does Microsoft really want Yahoo? (Or, more accurately at this point, Yahoo’s search business, since Microsoft’s days of wanting all of Yahoo thankfully seem to be over.)
Update: Speaking of back-and-forth, here’s Microsoft’s take on what happened with Yahoo and investor Carl Icahn, which (not surprisingly) is quite different from Yahoo’s — not to mention Icahn’s.
One reason, in spite of CEO Steve Ballmer’s claim that Microsoft’s Live Search effort is going great guns on its own, obviously is Microsoft can’t grow its consumer search share beyond 10 percent or so. But why else does Microsoft want/need Yahoo?
Ballmer & Co. are no longer claiming they want Yahoo’s brain trust (which is good, since more and more of Yahoo’s top talent had been laid off, has fled or is in the process of fleeing). Nor is Microsoft citing any longer the back-end infrastructure synergies that it would achieve by combining forces with Yahoo. Instead, as Ballmer stated it plainly at last week’s Worldwide Partner Conference, it’s really all about the ads:
“The more customers you have, the better, actually, the set of advertisers you have, the better advertisers and people actually like the ads in search. There are a lot of places people don’t like ads, but in search ads actually help the experience. So if you put together our volume and Yahoo’s volume the thought was that should be a good thing.”
What’s your take? Does Microsoft really want to buy Yahoo’s search business? Or are the repeated offers from Microsoft simply Microsoft’s hard-ball way of seeking revenge — and ultimately scooping up a Yang-free Yahoo at a firesale price?
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| 07/14/08
