Today at some shindig in Monaco (we can’t afford cross-Atlantic flights, so we didn’t go), Barry Diller said, via Paid Content,
Now with their new management, now Yahoo! will absolutely try, Microsoft is a greater failure, with a huge amount of capital and no real traction.
Wow. Maybe he’s being candid, but maybe he’s trying to get MSFT more interested in acquiring IAC. We’re not alone in thinking that MSFT might make a move for IAC to get Ask.com, so does Fool.com, but that same Motley Fool article also makes a case for MSFT to acquire YHOO.
I still think that after spending $6B to get aQuantive, MSFT is circling around Yahoo! and will make a move for the world’s largest portal before you can say “what happened to the butler”? Don’t get me wrong, I think Barry Diller has assembled a really nice company under IAC, but if MSFT wants to get serious about online advertising and search, the path is via Yahoo!, not IAC.
A few things to consider:
- adCenter + Panama would be a powerful combination.
- YHOO’s network outside of Yahoo.com is very robust now, what with Blue Lithium, Right Media.
- MSN.com + Yahoo.com would be a very strong portal presence.
- The combined market share in search would be nearly 40%, a respectable second to Google’s 55% share.
- The fact that MSFT is now in bed with Facebook increases its appeal to YHOO.
YHOO has shed almost 25% of its value since flirting with its $34 price and 52-week high just a couple of weeks ago, tumbling from $40B market cap to $33B. Meanwhile, MSFT is worth some $320B.
I’m not sure if this will happen, of course, but MSFT is really trying to make a push in online ads, YHOO is looking to catch up Google, it seems like a good fit.
Disclaimer: I own YHOO shares.
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