I must say that I thought Yahoo was insane for not taking a $47.5B buyout from Microsoft which was equivalent to $33 per share compared to last night’s closing price of $17.22. Now they are “Said to be Near Agreement for Web-Search Ads” which is another way of saying that Yahoo is scared to death because Microsoft released “Bing” and very quickly took search market share away from Yahoo. So you have Yahoo sitting on its hands, Microsoft releasing a solid search engine that within a month put Bing with spitting distance of Yahoo…how do you think that is going to work out? My bet is that Yahoo is going to take the shaft on this deal and rightfully so. If you were Microsoft, wouldn’t you take Yahoo to the cleaners?
The key in this deal is that Microsoft is going to get access to Yahoo’s user base. Google has yet to fully capitalize on all of the user information at their disposal and that is where the true money is. Microsoft is very willing to give Yahoo 88% of ad revenue as long as they get access to the big, unspoiled pie. At the very least, this will put Google and Microsoft in a battle over user information, not search. Who said government had to be the only big brother in the picture? Wonder where Facebook is going to fall in this whole game…
