Well over the weekend, the Microsoft-imposed deadline passed without a deal between Microsoft and Yahoo (as we expected). So where does that leave us now? Well there have been some interesting reports as of late. One of our favorites was from TechCrunch, with their interview with Citi analyst Mark Mahaney on Yahoo/Microsoft/Google. Of particular interest in the TechCrunch piece was:
Key takeaways:
- Mahaney clearly thinks a Yahoo/Microsoft deal is going to happen, either through a hostile move by Microsoft (40%) or via a negotiated deal (50%).
- He doesn’t count out the chance for a more permanent Yahoo/Google deal, though. We talk about the various ways Yahoo may be able to get a Google deal past the regulators, particularly via outsourcing only a portion of search ads on a non-exclusive basis.
- Mahaney maintains his current estimate that Yahoo can increase cash flow in the near term by $1 billion/year by outsourcing search to Google.
The most interesting exchange came at the end, when I steered away from what Mahaney thought would happen, and asked him what he would do if he were Microsoft CEO SteveBallmer: walk from the deal, or go for it aggressively. Mahaney didn’t hesitate in his answer:
Arrington: So if you’re Steve Ballmer, do you walk from this deal or go after it aggressively?
Mahaney: You go after it aggressively. You know what it’s like to see businesses increasingly concentrate on one provider. The longer you wait to attack that provider, the worse your odds. You can’t walk away.
Some great insight from Mark Mahaney. Over at Adotas they posted they million dollar question of the week, "Will Ballmer Make Yang Cry “Uncle?” My favorite quote of the piece is "So what will famously explosive CEO Steve Ballmer do?" Famously explosive, I love it...
Many expect some sort of major development this week, possibly as early as Wednesday.
Labels: Microsoft Yahoo merger
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Personally I'm not looking forward to a Yahoo-MS deal. Both companies historically buy/build companies and tools only to let them plateau without further innovation. Flickr is a good example - it was on the way to being a hugely popular tool full of innovation. But Yahoo bought it and it seemed like the innovation stopped.
Similarly, MS buys companies and their development seems to stop.
My feeling is that if MS buys Yahoo then over time Yahoo will cease to exist because it too will fail to innovate. As we know in the current searchscape if you don't innovate you die