Yahoo + Microsoft = Google?

While the entire MyItThings is out covering FashionWeek in NY I am left to cover the latest developments on Yahoo...

2007 will be probably marked as a pivotal year in the Yahoo' s history. The fight to stay independent in the midst of huge consolidations in the Online Advertising space (Google+Doubleclick, Microsoft+aQuantive, WPP+24/7, AOL+everyone else) probably used up a lot of time and focus. Yahoo did get BlueLithium (Ad network) but I think it was too little too late...

Then, in June Terry Semel stepped down as CEO and Jerry Yang, Yahoo' s co-founder, took over. The company was already in a real bad shape and Jerry was quoted saying "I am ready to dig in to address the challenges that face Yahoo". This entire thing reminded me Steve Jobs' return to the broken Apple in 1996...

Last week, after releasing Q4' s results (-23% Net) Yang said that Yahoo is facing "Head Winds" in 2008 as result of the slowing economy. He also announced they are "trimming" 1000 employees, again too little too late...

Friday morning I woke up and went to my computer, still half sleeping, by the time I finished reading the first line on the screen I was wide awake: "Microsoft bid 44.6 Billion for Yahoo!". It seems that Microsoft have made a really aggressive defensive move and submitted the offer immediately after Yang’s presentation, I have no doubt that Steve Ballmer was thinking about the Doubleclick fallout when MS was too slow and Google snagged the prize.

I bet that early next week we will see a few other offers on the table at least one was reported by TechCrunch to be in the works at News Corp.
 

The bottom line…

With Yahoo! Microsoft will finally be in place to rival Google in search, which is probably the big attraction there for MS. It will be bad for yahoo’s users that love all the other great things there: communities, real estate, Jobs, email (will probably be merged into msn live mail) and many other content and services that Microsoft will never manage correctly. I would be sad to see this deal going through but it might open up a place for many new startups, only time will tell.

Saar Paamoni