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Microhoo Not Coming to Fruition

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Om Malik and the Wall Street Journal are reporting that the much talked about Microsoft/Yahoo rumors won’t come to fruition and that the talks are off.

I’ll tell ya one thing, though. It sure made for interesting conversation with a Yahoo employee I met tonight. We were starting to draw up where value would be built and where it’d be destroyed. There were a lot of places it would be destroyed and if two guys drinking beer can figure that out in half an hour, I’m sure that caused smarter people than us to put on the brakes. For instance one of Yahoo’s biggest properties is its email service. But that’s one of Microsoft’s biggest properties too (aka Hotmail). Then you look at finance sites. Microsoft is doing pretty well there with Microsoft Money (I met an employee who works there too and he said both Microsoft and Yahoo are way ahead of Google in finance traffic). Then you look at mapping. Again, they are pretty strong competitors there. Search? Who’s search technology would be thrown away? Advertising technology? Both Microsoft and Yahoo are pretty close there. Flickr? Clear value creation in an acquisition cause Microsoft doesn’t have anything like it. Same with Del.icio.us, Upcoming.org, Yahoo Answers, MyBlogLog. Portal? Yahoo is clear winner in brand name, but that’s just cause Microsoft has done an awful job in rebranding everything as “Live.”

So, there would be lots of laid off employees in such a merger and that probably sat heavily with Yahoo’s board cause Microsofties would have been in the drivers seat (even where they shouldn’t be, really).

Where would value have been created? Well, if they could keep their relative market shares in all these places after mashing them together then they could really make a run at Google.

But, it all is talk now that the deal is off (I trust Om, he has killer contacts).

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