Should Microsoft Buy Yahoo For $50 Billion?

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Today’s news on the possible acquisition of Yahoo by Microsoft is red hot, hot enough to increase Yahoo’s stock value by over 18% as of 10:30 am.

With reports of Microsoft offering a $50 Billion buyout of Yahoo, and other reports brewing of a possible merger, the question is, would such a venture be beneficial to Microsoft or Yahoo?

What does Yahoo have to gain? What about Microsoft?

Do you think it would be intelligent of Yahoo to accept such a merger or takeover? Should Microsoft continue to pursue Yahoo?

Please voice your opinion in the comments below.

Loren Baker
Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing strategy & development agency.
Loren Baker
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  • Actually, despite my long-term dislike of most Microsoft strategy, this might be exactly what they need. They’ve been wholly lacking in web-mindedness, and seem to still be most living in the downloadable app world. Which might be why they’re behind in search. Maybe, maybe not.

    A merger would obviously give Google a run, but it would create a vacuum and open up opportunities for other engines. Healthy competition is always good.

    I vote yes.

  • How would two companies that more or less lost the search wars to Google beat them as a combined team?

    It may seem elementary that they would be better as a combined force, but my guess is that they’d be a big dud – two halfs don’t make one in this case.

  • This is what Microsoft would need to bully their way in. Although, do they even have that much money?

    You can kiss the Yahoo mentality and lifestyle away then. I always liked the vibe I got my Yahoo.

  • Duran

    I love Yahoo, but I will use another search engine if Microsoft buys it.

  • Rhea Drysdale

    Personal opinion: Microsoft would come out on top and Yahoo would get shafted.

    Microsoft is out of touch and trying to go after an easy, but costly fix to a much larger problem. By acquiring Yahoo they solve some temporary issues, but long term, will Yahoo’s integrity be maintained?

    To be honest, I think Yahoo’s UGC phase is slowly falling apart and Microsoft is distracted by the shiny surface.

    All I can say for certain is this is definitely going to get interesting…

  • Rich

    In business this would be called throwing good money after bad. Buying Yahoo would be a terrible mistake at this point.

  • I posted this comment earlier, will post again, see what you guys think.

    I think financially for Yahoo, this could make sense according to wall street since the dissapointing Q1. Both have launched new interfaces recently and improved thier search, so I dont think one needs the other in that sense.

    Yahoo keeps making moves to keep up with Google and still maintains good market share (not as good as Google obviously) but it is the 2nd most used search engine in the United States. MSN has actually lost market share (never had a good grip on it) so it makese sense on that end, but again, PERSONALLY, i think thier lacking in design and advertising.

    It really all comes down to Yahoo deciding if they can keep competing with Google in the years to come in terms of search (which they can) and aquisitions (financial power). They need MSN only for one of those reasons.”

  • My mother always said: “Two wrongs don’t make a right”. Will two mediocres make an outstanding? I doubt it.

  • Everett nailed it. Anyone ever try to do a global campaign in different langauges in Yahoo!? You need to set up individual accounts in each country. Look at Google…they make it easy. Heck…they are making it easy to do print and radio…and soon…TV.

  • A merger is really the only shot either has to confront Google.

    1. Ditch MSFT search for Yahoo Search
    2. Integrate the two PPC platforms, taking the best of parts of each.
    3. Use MSFT cash to incentivize partnerships with content providers.
    4. Reduce fat from both payrolls
    5. Goodbye Semel and Susan “we’ll never be better than #2 in search” Decker.

    MSFT will have data on all of Yahoo’s social search accounts, Flickr, Del. etc. making marketing of software and gaming hardware easy.
    This deal has to happen.

  • Of course, isn’t Wikia going to be an open source search engine? Even if MSFT/YHOO merge, and get regulatory approval, if they don’t add other features, will the merger matter?

    If they want this to work right, they should let Yahoo run the (search) show. Then they should look at Charles Knight’s list of top 100 alternative search engines and consider buying and integrating at least one if not several.

    Then, maybe then, they’ll have a chance against big G.

  • I wasn’t using Yahoo very often but this sale will be really huge and the balances will change in that sector!
    We actually were expecting yahoo to announce or spread something like Google Adsense.
    At the end Yahoo has no chance but to be sold!

  • Microsoft has gone on the full offensive in their attack to purchase Yahoo!. According to a recent press release this made Yahoo! shares jump 17.96% making me very happy since I own Yahoo stock. Yahoo!’s current market cap is $44.41 billion, wait it just went up to $44.60 billion. Some think Yahoo! will sell at over $50 billion.

    I think this would be good Internet users if the culture of Microsoft does not overwhelm Yahoo!’s. I think that Yahoo is a better company than Google and has a much wider range of services. Statistics show that users spend much more time on a Yahoo! site than on Google.

    Microsoft’s entrance into the search arena has been disappointing. The purchase of Yahoo! will remedy this. Bring on Yahoosoft!

    Who will win: Google or YahooSoft?

    Microsoft has a market cap over $290 billion; Yahoo! has a market cap over $42 billion. The search traffic of both combined will be larger than Google’s. They also will be much more diversified, something Google is trying to buy with their purchases of ad agencies etc.

    Microsoft controls more of the operating system, Internet browser, servers, user software: I think Microsoft is much more the network than Google.

    Combined they beat Google all day long.

  • The merge is a definite win for Microsoft over Google. It’s probably the only way now they can outdo Google in the online web, with every online solution from Microsoft failing miserably.

    As for Yahoo, I would never do it if I was in their shoes. Yahoo seem to be doing really good, and they are the #1 site, so why should they? They have tried join forces with Microsoft against Google, but acquisition is something different.

    I’m not a Yahoo fan, I hate Microsoft way of doing business, but I believe this merge could harm the whole web. What would happen to all colliding services from the two companies? I don’t think Microsoft would kill it’s own services for Yahoo. Google kind of killed Google Video for the good of YouTube (the best). But with Microsoft, I really doubt they will dump all what they did.

  • I believe this will be great for MS, this is what they need to be able to compete with Google in the future.

    However, it will probably be quite bad for users, since it will (in the long run) mean that will only be 2 big players in search. I hope this will not go through.

  • I would love to see microsoft and yahoo! combine together to bring out a master search engine with a huge database to beat google. Google needs a competition. Once this happens, it’s going to be great going for us webmasters with no bullying by google

  • This deal should not happen. Microsoft will drag Yahoo down with its sinking ship.

  • i would imagine it has more to do with access to information. both microsft and Yahoo have been eager to compete with Google through personalised results and local search. they have both collected huge ammounts of data through mail, tool bars, groups, blogs and web2 applications. in my oppinion this is the future of search and it is an area where they have an advantage over Google. Google stole the lead through not being a portal and concentrating on creating the perfect search engine. now their page rank technology is flawed requiring more and more human intervention. they have obvioulsy now woke up to the need to collect data with the buying of so many web2 companies, the development of iGoogle and the tool bar. i think this move couldl be good for the industry.

  • Joe

    I think Micrsoft is under-rated as an organisation. From 1996 (over ten years ago – a century in the tech sector) people have been predicting the demise and fall of Microsoft along with the advent of the internet. First to Netscape, then to Sun and now to Google.

    This deal (larger than the largest aquasition Oracle has tried) shows that there is still lot’s of firepower in Microsoft’s arsenal.

    If they can execute the merger (I think the Europeans will eventually object – the always do) this will be a big win for Microsoft and the industry as a whole.

  • Cookie

    All I have to say is that I will leave all my yahoo services is microsoft buys it.

  • Many Benson Horse Property owners feel that Microsoft should strongly consider buying Yahoo for 50 Billion. It’s all entertainment anyway…

  • If Microsoft bought Yahoo, the online market would be more competitive between Microsoft and Google.

    I think it would be more better for customers.

  • I don’t think its a great move. Their work culture and idealogies are way different. Integrating two biggest internet giant is no joke. Their consolidation will t be hitting the online world in a big way.

    You might want to cast your vote here

  • No !!! Microsoft should not buy Yahoo. Microsofrt viloated many issues and and it will continue getting bigger and stronger. I VOTE NO !! It violates antitrust agreement.

  • It’s easy… google will become my only friend.

  • iboman

    I donot like Microsoft and would be happy to see them fail. The only way this will happen is when they become bigger and bigger. Like the old empires they got bigger and bigger then collapsed into tiny pieces. A merger this size would quicken their end.
    (Not similar but look at Daimler – Chrysler)
    Hope to see the merging quite soon. 🙂

  • Microsloth

    Oh, alright now hackers who are Microsoft haters may start targeting Yahoo! — but thats just would have initially enjoyed seeing… Microsoft and thier 50 BILLION Dollar Loss. If one can hack Turkey’s government website all the way from America why can’t “Mahoo” be broken into and wiped clean over and over. I’m just being a jerk. SO anyway…

    I think this is a bad idea (for Yahoo!) because Microsoft and their already bloated products will probably make Yahoo either too easy and dumb with stupid pop-ups or make it too full of the junk that they want to push.

  • ANDY Tan

    I hope effective synergy to be gained upon proper quality acquisition.

  • Graham

    I think MS should buy Amazon. Its cheaper than Yahoo and could provide seamless integration of advertising and direct sales online. I think MS should buy Amazon and aggressively turn amazon into a huge online powerhouse of search and marketplace, the future of search is a company who owns the distribution means and can offer more than simple directory services but actual product sales. Media is also a motivator of ads which could be utilized by changing the dynamics of how Amazon works. Media with direct consumer sales potential: click on a video of the a band and the ads below are actual links of items, not links to sites with items.