Yahoo! not to agree with Microsoft deal

0Hazrul Azhar Jamari • 10th Feb 2008 • My Notes • Domination, Google, Internet, Microsoft, My Businesses, Search, Takeover, Yahoo

Yahoo’s share price have rocketed up $10 from $19.18 before the unsolicited bid to $29.20 today. But there is news that Yahoo will dismiss Microsoft’s offer as being “inadequate”.  Microsoft’s share prices have also dropped significantly reflecting that it may have offered too much as it admits that it may have to go in debt for the first time to finance its $44.6 billion bid.

But with this snub by Yahoo, Google’s fears will be allayed. But I do not think that they had been overly worried with Microsoft’s offer. Google would still remain the major search engine today as it continues innovating its Internet products.

In any case, if Microsoft had managed to buy over Yahoo, with an impending US economic slowdown and potentially a worldwide recession, their purchase would be the most riskiest ever as they would have to borrow funds to complete the transaction. If Microsoft could not make their gamble count, we would be seeing a poorer Microsoft in the years to come.

I do not think such a deal would have benefited Yahoo as a business, or Microsoft itself as these entities lack in synergy. Yahoo does not use Microsoft technology and Microsoft will find itself in deep frustration trying to get Yahoo’s infrastructure to work seamlessly with theirs.

Big transactions require time to take effect and in such a dynamic world like the Internet, slow = extinction. I believe that if Microsoft presses on with their offer by raising the price of the package, the company will cease to exist in the next 10 years.

With the murder of Windows XP, the problems with Vista, and MSN’s ineffectiveness as an email, IM, content and search portal, combined by an extremely large debt, and an internal struggle to collaborate with the multitude of different technologies across all it’s various business units, Microsoft will become one big, fat ugly monster, and you know what they say about big, fat ugly monsters. The bigger they are, the harder they fall.

*Photo by Associated Press