Well the breaking news this Sunday afternoon/evening is that Microsoft now wants to buy Yahoo’s search business and the not the whole company. In a statement today Microsoft said …
In light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo. Microsoft is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo or discussions with shareholders of Yahoo or Microsoft or with other third parties. There of course can be no assurance that any transaction will result from these discussions.
Couple of points pop up right away ..
Microsoft is definitely applying the pressure on Yahoo - Yahoo’s board is already under the gun from the looming proxy takeover bid by Carl Icahn. To avoid a possible proxy fight Yahoo’s board of directors may decide this time to not back Jerry Yang and approve the sale of their search business or whatever the “transaction” is.
IMO Yahoo should part with the the search business for one simple reason - Google. There is no way they could ever compete with Google again in the search space. Sell it to Microsoft and let them deal with it. After all thats what they wanted in the first place, a bigger chunk of the search and advertising market. Yahoo has a smörgåsbord of other assets and this is a great opportunity for Jerry Yang to refocus the company.
Should be an interesting week!