Unnamed sources at Yahoo have indicated that company management is considering re-opening talks they had just a few months ago with current search frontrunner Google. The talks were intended to forge a partnership of some sort between the two companies, which some in management are apparently considering again in order to fend off Microsoft's advances. With monopoly considerations making them nothing more than a spectator in the entire affair, it seems like obvious that Google would jump at the chance to put a halt to Microsoft's plan to expand right into their backyard.
The same unnamed sources aren't going so far as to suggest that a Yahoo-Google partnership is likely, or that others may not be interested in buying Yahoo (although no obvious companies come to mind). In fact it's possible that they're just hoping to force Microsoft to raise their bid because they feel the initial offer is too low. Meanhwhile, some in the investment world have suggested that Microsoft's offer isn't likely to be their final one, but rather that it's just high enough for Yahoo shareholders to get excited, forcing mangement to give their own appraisal of the company's worth.
One analyst at Sanford C. Bernstein wrote in a research note that "the Microsoft bid of $31 is very astute" because it puts pressure on Yahoo management to take actions that could expose the actual value of the company's assets, which he believes are likely worth better than $39 to $45 a share.
And of course Google and Microsoft representatives have been exchanging jabs at each other through the press. While Microsoft plays up the importance of consolidating MSN and Yahoo's search services to increase competition with Google, sources from that company point out that Microsoft's proposed buyout would join the top two email and IM services.
If nothing else this underscores why we here at Afterdawn have decided to devote ourselves to video and related topics rather than wasting time with business predictions.
Written by: Rich Fiscus @ 4 Feb 2008 1:21
