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Should Microsoft Buy Yahoo?

Microsoft said to be mulling bid

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Should Microsoft Buy Yahoo?
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What if Microsoft bought Yahoo? According to a report from Reuters, Microsoft is eyeing a bid on the company which is currently down a CEO.

Would such an acquisition be good for Microsoft? Good for Yahoo? Tell us what you think.

Yahoo’s board fired CEO Carol Bartz last month, and has yet to find a replacement beyond interim CEO Timothy Morse. According to at least one report, former CEO Jerry Yang had even assumed control at the company (though this is unconfirmed). The company source cited in that report from Business Insider said it was “f-ing crazy”.

The Reuters report cites “sources close to the situation,” and says, “Microsoft joins a host of other companies looking at Yahoo, which has a market value of about $20 billion and is readying financial pitch books for potential buyers, they said.”

The other companies reportedly include Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, Alibaba, and DST Global.

“Microsoft could easily afford Yahoo. After a 10% stock price bump on a report that Microsoft was weighing a bid, Yahoo’s market capitalization was about $21 billion,” says the Wall Street Journal. “If Microsoft offered $20 a share, 25% above Wednesday’s close, the price would be about $26 billion. But the net cost could be less than half that, assuming Microsoft sold Yahoo’s Asian assets and factoring in its $2.6 billion of cash.”

If you’ll recall, Microsoft made a failed attempt to take over Yahoo a few years ago, but ultimately ended up forming a “search alliance,” where the two companies would partner on search and advertising. Bing has been powering Yahoo’s search results since that went into effect. Microsoft’s bid for the company in 2008 was a reported $44.6 billion.

Given the amount of attention we (and our readers) place on search, it’s easy to get caught up in Yahoo the search engine, but Yahoo has a lot of properties, and some of them are quite powerful. A few months ago, the company shared this infographic as a reminder:

Yahoo: Did you know we're number one?  

In its last earnings report, Yahoo said it is home to nine #1 properties globally, and is in the top three in 23 categories. It also said it has nine out of the top ten original video programs on the web.

Yahoo considers itself a media company, and that certainly is an area where Microsoft could grow. It would be interesting to see how the regulatory process plays out if this goes forward.

Regarding Yahoo and search, the company recently put up a blog post talking about how it’s ready for a “search fight,” including these three bullet points on “what search looks like” to Yahoo over the next 18 months:

  • From destination to companion: Access and convenience are two key components in the search game. In the next 18 months, Search will be a companion experience that gives you answers immediately and instantly without leaving the page you are on – effortlessly.
  • From fragmented to seamless: Consistency and simplicity are two key components in the search game. Users are increasingly searching on multiple devices. In the next 18 months, your devices and platforms will be seamlessly connected, allowing you to start an experience on one device and continue effortlessly onto another, with simple access to any information on any other devices. Search will be evolving into a beautiful and consistent multi-modal experience that simply integrates into your everyday life.
  • From more information to better information: Relevancy and depth are two key components in the search game. When you search for something — say, Adirondack chairs — do you really care that we returned 9,150,000 results? Probably not. In the next 18 months, Search will focus on a deep experience that gives you only what you want to know, taking into account your search history, click behavior, demographics, social graph, and browsing history to provide you with a 1:1 experience. It will tell you why it served you the results it did and allow you to pivot on a number of aspects to further tune the page. It will no longer be a search engine designed for the masses, it will be a search engine tailored just for you. Some call it a results page; I call it an intent satisfaction experience.

Last month, Yahoo redesigned its search results pages.

Bing and Yahoo were both up in the U.S. search market reports last month, with Bing-powered search accounting for 28.99% of the market, according to Experian Hitwise.

Do you think Microsoft should buy Yahoo? Let us know in the comments.

Should Microsoft Buy Yahoo?
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  • John

    Chris-

    Could be interesting to see how things shape out. Certainly not the bid that was once offered by Microsoft, in Yahoo’s case I might take it and run! Could give Microsoft a better footprint in Asian market? See more related articles:
    http://enlyton.me/dlm

  • http://www.invgate.com Amelia @ IT Management

    I don’t think Yahoo is doing well at all. Its stocks are falling and the company hasn’t been doing anything innovative of late.

    Yahoo is still worth a lot though so it would be a good idea for Yahoo to take any offer before its value drops down to zero.

    A Yahoo-Microsoft marriage could be great down the line but I still think that they need to go into overdrive if they want to catch up with Google.

  • http://www.gatfol.com Sally Greyling

    Yahoo continues to lose its competitive edge by providing nothing new or innovative that makes one want to sit up and notice them. Yahoo now relies on having it’s search results powered by Microsoft “Bing” which still cannot compete with Google, and although Yahoo still makes millions from its advertising, one has to ask – where are they going as a company? Like Steve Jobs said of Apple when he got back on board at the time – the ship has a hole in it and he has to steer it in the right direction….so for Yahoo, perhaps a buyout by Microsoft seems pretty inevitable!

  • http://www.blackplanet.com/peterzmijewski/ Peter Zmijewski

    Amazing Post!!!!!!!
    Nice Topic to be discussed………….
    Thanks for sharing!!!!!!!!!!!!

  • http://www.kdmadvertising.com David Stuart Ryan

    Alibaba and the 40 thieves look likely to work a little magic.

    Pity, really Yahoo was once the leader but search has never quite got ahead of the curve post the arrival of Google.

    The alternative is becoming a hip media company publisher rather like Amazon is becoming.

  • http://david-laster.blogspot.com/ David Laster

    I think this would be good for both parties….Yahoo could stand an up grade.

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    • Frank

      Hello Renato, Thanks for the spam, you really know how to add quality content to the internet!

    • John

      Renato – you’re an idiot

  • Emanuel Dumitru

    Yahoo…..hmmmmm It may seem like a good idea, at least for USA, because, as much as I know that’s the place where Yahoo is having a major importance.
    As a search engine, in Europe Google beats Yahoo.
    In Romania, for example, Google has 99.9% of the market in SE services.
    Personal, I believe that Google is more user-friendly than Yahoo.
    I wouldn’t recommend Bill Gates to spend such a big amount of money (you realize how much yahoo worth) with Yahoo. He may buy Google or IBM or Apple stocks or use the money to stat a big mobile smartphones division to compete with Apple or Samsung.
    Nokia is going down so this is an opportunity for Microsoft to really take a market share by doing some serious changes….windows mobile is a bad joke, all windows O.S. are unstable (on p.c.,laptop, phone….there will always be problems with the o.s.); This is the reason why more and more people are choosing Mac’s (despite the design and the technology) for stability, protection, less blue-screens, etc.
    Put you heads together and start doing the right job!
    Microsoft has the potential to equal and even beat Apple.
    You have the human resource, the money, now you need the will ;)
    I mean, God, the Arc Touch mouse was fabulous, I was the first buyer in Romania, I made the pre-order 2 month before official launch….so you still can amaze the market with great products.
    IT&C is an enormous market, there will always be sales in here.
    Why choose Yahoo when you can use that money for developments…
    Maybe you will want to hire me for the European market or for the Romanian one…who knows?

    Yours truly,
    Emanuel Dumitru

  • http://www.smartsocialholidays.com Jackie

    I think yahoo need to change with time, if Microsoft can make new improvements, go for it. We live in a moderm time where change rule our business and improve our lives, I just start social world. a website to connect like minded people to meet and share a social world. smartsocialholidays.com

  • http://www.indrum.com indrum

    To much power in the hands of the few is failing our government, fuelling corporate greedy while providing less

  • http://www.alda-architects.co.uk Alan

    This feels wrong. Yahoo have problems and needs to modernise, but they have also many strengths. Trying to merge Yahoo into Microsoft’s plans will be more difficult that internal reappraisal from within Yahoo. I think it is potentially bad for both parties.

  • Steve

    no microsoft having yahoo would not be good..Microsoft needs to be more concerned about improving their programs and operating systems..instead of everything else…yahoo is good the way they have been going…granted they have their problems and need to improve things but i don’t think microsoft or yahoo will benefit…i think it would just cause things to be worse

  • Bill

    ok, here we go again with major corporation takeovers. Sure, this would be a good thing for MS, another avenue to grow their business. Aren’t they big enough? With the internet moving towards total cloud based usage, then what? Corporations are greedy and want all of your dollars,euros, yen, etc How will they gouge us next?

  • Michael Banker

    Who cares, the US Governemnt is the majority shareholder. The results are going to be the same either way. With the new (stalled in legislature)FCC rules and the loss of the Peoples control of our governemnt how long do you think till Time Warner and Disney make the Internet their new TV set. Just like the Main Stream Media, now including Yahoo, MSN and MSNBC who only feed the people of the United States what the corporatocracy and Republicrats tell them too.

  • jr maxwell

    It would be beneficial to both companies, so that is good, but for the consumer it isn’t a great find. Like manure, it starts out grass, good for the cow, but the consumer has no choice in which grass is good for them,the end result is crap. Microsoft should improve their products first. as should Yahoo. Competition is good for the consumer although in this case its not much competition, more collaboration in the wings.

  • http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=50358&item=160656564527 Harris Egendorf

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    • Frank

      Hey, thanks for the spam, just what everyone needs, more spam

    • John

      Harris – you’re an idiot

  • jr maxwell

    As an extra, both companies need to remember that users arn’t all computer literate, make things easy to use, more simplified without hiding buttons. Like Windows, shut down by going to start. In yahoo to shut some things down, whoops where is the off button or change button.
    We are not all geeks. Linux has the same problems, not at all friendly to the consumer, but we have to adapt to them. Only as much as we need to is the basic mentality, to get the job done.

  • Ryan Kempf

    I think Microsoft should consider the fact of how it would affect the overall mission of the company I think changing missions in midstream is not good at all they should focus on one mission their operating Systems I think the answer should be an absolute no!!!

  • http://gamelicker.com John Vocasnik

    I think an acquisition of Yahoo! by Microsoft would be a great news for everybody. Microsoft badly needs to improve its online presence and Yahoo would be a great fit. In the past they already wanted to buy Yahoo but their offers were rejected by Yahoo management. Now the situation is much better and I think if Microsoft made an offer to Yahoo! they might accept it.

  • http://www.civegypt.google.com MOSTAFA

    I think Microsoft should consider the REALTY ; how it HAD affect the overall mission of the company I think changeable missions in midstream is not best at all they would focus on one mission their operating Systems I think the answer would be an absolute !!!

  • http://www.pattycarroll.com Patty Carroll

    IF Microsoft buys yahoo, I will immediately move my email address to gmail, which is better anyway. Microsoft has a way of making everything difficult and non-user-friendly. For instance, Explorer is the only browser that needs work arounds for particular css and html codes.

    • Frank

      The new Yahoo mail will drive most users away!

  • http://www.evsroll.com EVsRoll

    Yahoo: It ain’t broke, don’t fix it. Leave it alone.

    • Frank

      Your definitely not a paid user of yahoo store or financial services. Many thing are broke inside Yahoo and they need to be fixed badly.

  • Kunta

    Yahoo is already bought by Google …

  • http://telecommtraining.info headdragon

    Leave yahoo alone Microsoft.

  • http://www.CaptainCyberzone.com CaptainCyberzone

    The acquisition and continuation of Yahoo by Microsoft would be good for the users (of search engines).
    The continued competition (with Google, et al) would benefit everyone. The essence of this planet’s basic structure is competition and reward; it powers evolution and hones betterment and it applies to all aspects from the physical to the social (this is why the one-fits-all bureaucratic “ism” has always failed and will never work … it’s against the the basic nature of the “prime structure”).

  • http://happypappies.net leslie goudy

    In order to compete with google it would be best. Attachments are terrible on Yahoo Mail and Microsoft’s hotmail is compatible with Google. I like Yahoo search better than google so it would be a good thing imo

  • Frank

    Split decision, generally anytime private equity gets involved it’s only good for them, their only in it to milk money for their investors. Surely don’t want to see another American company sucked up by the Chinese. That leaves Microsoft, what to do? I think Microsoft could provide the much needed updates to Yahoo store and other properties, but will they do it right or screw it up worse remains to be seen. Microsoft does not have a good track record in these area. All i can really say is, please sell yourself to someone who knows how to run a business and will not be lazy like you are. The new Yahoo mail is already driving people away, your lack of upgrades to some valuable properties is so far behind they may not be able to be fixed. Great job Yahoo, now get off your behind and find the correct buyer, or stop screwing around and fix yourself!

  • http://richmedia-usa.com richard w bailey

    YES it would be good for the business and quietly it would give Microsoft a better edge in the market place of which they are gaining slowly but surely everyone seems to forget Microsoft is a Software company they don’t make computers >>>>> Yet! <<<<<<<<<

  • http://www.bueroschnaeppchen.de Büromöbel-Schnäppchen

    We make use of yahoo sponsored search. A couple of very good features always made sense to use it as an additional marketing tool. In the last two years we got some messages that partial functions will be cancelled. You cannot build a successful future for a company in this way. For Yahoo, it would only be beneficial to merge with a strong partner and finally come back to develop forward. If this succeeds with MS is questionable…

  • http://www.esc-creation.com ESC Creation

    Sorry out of topic, take look Microsoft site was hacked http://fuse.microsoft.com

  • John

    Hey Webpronews – does anyone there read the comments or at least check them maybe put in place some rudimentary checks to stop your board being spammed by idiots.
    C’mon you’re an internet company, right?

    • http://smokingwheels.dyndns.org smoking wheels

      If you had not of said anything I would not have now put my web address in, people need to realize the web has a memory like an elefant ….hey spell checker noot working…
      Freedom Of Speach!!!!!!!

  • http://www.shakayanaturalproducts.com Patty

    After reading the article, it looks like good business sense for Microsoft

  • Thomas Evergreen

    Let Yahoo go. Everything is going mobile and Yahoo doesn’t have a platform like Google has Android. There are many other factors but this is just one. Microsoft could do this, if they were to change the name of Yahoo. I have a Yahoo account but I only use it on these boards. Haha, I never check it, I just use it to post. I like to keep my other emails junk free which is what I get from Yahoo. Yahoo needs a better name. Microsoft has Bing. Do they really think they can make yahoo better?

  • nettiser aust

    Microsoft should just get on with it’s own business .It is already a monopoly. Leave well alone and concentrate primarily on doing what it does; better. I look forward to the day when there is more competition and flexibilty. It may be on the way with Android thank goodness.

  • LS Giles

    YAHOO cand find themselves a new CEO. Microsoft buying YAHOO would be just like AT&T buying up my local phone company (SWBell), which they did. Service got worse, pricing went up. My thing, I think Microsoft has enough on their plate to keep track of without even thinking of purchasing other companies. Why ruin a good thing.

  • http://www.arthurohara.com Arthur O Hara

    It would be a mistake for Microsoft to purchase elements of Yahoo in the present fiscal climate.

    There are wealthier conglomarates who are disinterested. Good indicator!

    Yahoo would not ultimately gender sufficent monetary benefits to Microsoft going forward, even in the longer term.

    If it was me I would need a few Months carefully scouring Yahoo’s books before committing.

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  • steve

    Microsoft design deam ruins everything they touch. Their latest browser serves to drive me to Google Chrome. I’m certain if they buy Yahoo they’ll ruin that too.

    • smoking wheels

      I agree With ruin

  • http://weddingaccessorieshub.com Cheryl

    I have always had problems with internet explorer anduse other browsers.

    It would not be in Yahoos best interest to team up with microsoft as I feel their standards would drop rather than improve

  • http://weddingaccessorieshub.com Cheryl

    I have read some of the replies and feel that people who wish to be abusive to other contributors should re think their options.

    Please keep it clean and polite, this will make it more constructive.

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  • Christopher Lines

    NO! There is already way TOO much monopolization of corporate ownership in this country, ergo #OccupyWallStreet.

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  • smoking wheels

    As long as they fix my inbox which contains 25 million email!!!!!

  • http://www.lzqqw.com wangjiao

    go go

  • http://richmedia-usa.com richard w bailey

    When you are the begining designer of operating systems and the largest everyone wants to take jealous shots at you. Pleae remember Microsoft doesn’t build Computers. If they did you would see how it would compete with anything anyone would produce they rely on other companies to do it for them at least for the moment. Watch out you don’t want to wake them-up. lol

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    Redes de proteção para crianças no Guaruja sp colocamos redes de proteção telas especiais para piscinas redes conmtra pombos colocamos box de vidro temperados espelhos entre outros visite o site

  • http://www.4rx-pharmacy.com My1Rx

    I do not see why they should merge. They are already sharing search results. JP.

  • http://www.howawebsite.co.uk Gill

    They are already merged through bing but I think that yahoo could do with some more help through this type of acquisition.

  • Chrissy Matteson

    No, no, no, no. MS should not purchase Yahoo because everything that MS purchases turns into something you have to pay for. Yahoo should not sell.