Black Shards Press – Electronic Gumbo is Our Specialty

Microsoft Buyout of Yahoo?

01.02.2008 (9:12 am) – Filed under: Business,Technology ::

The Washington Post says Yahoo may be acquired by Microsoft:

Yahoo was one of the first companies to popularize Web searching, and it still attracts one of the Internet’s largest audiences to its main Web site, an amalgamation of services and content that includes its search engine. However, the company has had trouble translating that audience into consistent financial performance.

Earlier this week, it announced that its 2007 profit had fallen 12 percent compared to the year before and that it would lay off 1,000 workers.

At $31 a share, the proposed purchase price represents a roughly 60 percent premium over Yahoo’s closing stock price yesterday of $19.18. In addition, Microsoft chief executive Steven A. Ballmer hinted that if Yahoo’s board rejects the deal, Microsoft would pursue a hostile takeover, attempting to lure Yahoo stockholders with an attractive price.

At Blue Crab Boulevard, Gaius has doubts about the desirability of the proposed combined company:

I think there are serious privacy issues with the internet already – this is likely to make things worse. I’m also not at all sure that MicroYahoo will fare any better against Google than the separate companies have – face it, there really is a trust issue with Microsoft.

He adds, only half-joking, "Besides, who wants a blue screen of death on their search engine?"

I’ve got my own misgivings after paying the price, literally, for Microsoft’s near-monopoly on PC operating systems.  Enough other people feel the same way that Linux and Apple have both taken off in recent years, the latter from an almost terminal state, pre-Steve Jobs return.  However, customers’ experiences with the real Apple, as opposed to the marketed version, are not significantly better than those of Windows users.

The truth is that Microsoft does a good job of providing a stable operating system that’s compatible with virtually all flavors of random hardware, support for which is far more extensive than is provided for by Linux or Apple.

As for the trust issue, Google has already demonstrated that it cannot be fully trusted with our personal data, as have the telecoms and the federal government.  Personally I trust Microsoft more than any of the above organizations.

Given the rubber-stamp approvals given to banking and telecom mergers in recent years and Google’s dominance in Internet aggregation and search, I’d be surprised to see significant regulatory opposition to the merger.

I’d also be somewhat surprised to see Yahoo accept the offer.