Microsoft Buying Yahoo Seen As Likely

    May 22, 2007
    WebProNews Staff

Since Microsoft acquired online ad firm aQuantive for $6 billion, the likelihood of Steve Ballmer and company following that up with a Yahoo purchase became greater.

Microsoft Buying Yahoo Seen As Likely
Microsoft Buying Yahoo Seen As Likely

Analysts say the darnedest things sometimes. The year-plus on-again, off-again, deny deny deny cycle of Microsoft and Yahoo talks could finally bear more than just a smattering of no comments from the two companies’ respective PR firms.

Bloomberg picked up on an analyst note from Goldman Sachs’ Andy Noto regarding a possible Microsoft-Yahoo love fest. He thinks Microsoft needs some 500,000 advertisers to compete with Google, and the aQuantive deal in itself doesn’t provide that.

Yahoo would provide that extra power, and Noto’s firm thinks its acquisition is a fait accompli. "We believe the odds of a deal happening over time actually increases," Noto wrote in his note. "Microsoft is willing to do deals that are a strategic necessity."

Neither firm is commenting on Noto’s opinion. Naturally, his thoughts aren’t universally supported. Bloomberg noted Merrill Lynch analyst Justin Post, who thinks the aQuantive purchase will take months to integrate with Microsoft.

One item of interest has to be Yahoo’s recent re-org into three divisions under CEO Terry Semel. That streamlining of corporate duties, along with Yahoo’s newly discovered passion for consolidating or eliminating services (i.e., Yahoo Photos to drop in favor of Flickr, and Yahoo Auctions shutting down), looks to us like a company making itself a more attractive takeover target.