“Now that a pivotal advertising partnership with Google is off the table, Yahoo CEO Jerry Yang is ready return to the bargaining table with Microsoft if the world’s largest software maker remains interested in buying his embattled Internet company.” – Source: Physorg.
Now that the economy is in a downtown and Yahoo have laid off even more staff – plus this additional failure to partner successfully with Google, Yahoo has little choice but to look at a buyout. Last time Microsoft offered $33 a share, whereas Yahoo asked for $37 or no deal, I think Microsoft have played a good game and now can go back to the table with the upper hand. With the current stock market issues, I think MS will offer around $17. What a comparative bargain!
What comes after the purchase?
My view is that Microsoft will now approach this far more aggressively insomuch that it will probably lead to a massive asset strip. If you look at the current Yahoo offerings, there are some overlaps with Microsoft as well as some services which are likely candidates to be surplus to requirements – e.g. eCards, Maps, Mail, Autos, etc.
If this purchase is successful, Microsoft do have to be careful that they approach Yahoo with kid gloves – the PR needed to conduct a full takeover will mean that they will have to walk a tight rope and produce some quality deliverables quickly and well supported to get buy-in from Yahoo users. I’m thinking something like Yahoo UI enhanced with some Microsoft’ness, integration of Live! and Yahoo! Services, etc. In any case, it will be interesting times.