Microsoft: Hands off my Yahoo!

February 1, 2008

yang2.jpgAs if a 62 percent premium for Yahoo wasn’t enough to deter rival bidders, Microsoft executives had a special warning for Google.

He didn’t say “DoubleClick” out loud, but Microsoft general counsel Brad Smith made it clear the authorities would come knocking if Google so much as fantasized about making a grab for its nearest rival.

Here’s how Smith put it during a conference call with analysts today:
Any number of companies might take an interest (in Yahoo). I think there is really one company that cannot. That is Google itself. Given that Google has roughly a 75% market share worldwide for online page search, they are not in a position to do this. Given its super dominant market share, Google is clearly prevented by the antitrust laws from buying Yahoo or buying this business from Yahoo.

Smith went further to say that major media companies are already giving their blessing on the offer, suggesting they may want more than all Google, all the time when it comes to online advertising.

The reaction from publishers, which includes a lot of the media companies, has been very positive. They have been encouraging us to make this kind of acquisition. In fact, we have been getting unsolicited feedback this morning from publishers and advertisers that this is the right kind of step that is going to create a more compelling and competitive number two in the marketplace.

As a footnote, even as Yahoo’s share price slid further and further this month, many analysts were loath to say that a Microsoft deal was possible. Except one, and he’s not even an analyst anymore.

As we’ve argued, the Internet industry will not support four major generalists–Google, Yahoo, AOL, and MSN–and two of them need to combine. We like the Microsoft-Yahoo combination a lot, but we think a simple Microsoft swallowing of Yahoo would be a disaster. We think Microsoft should sell its Internet business to Yahoo in exchange for a significant chunk of equity. The resulting public entity would be able to recruit top talent, more effectively compete with Google, and operate independently of the Windows/Office machine. — Henry Blodget

(Photo: Reuters)

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Posted by » Yes, we were right Yahoo was seriously undervalued; Microsoft offers $44.6B for the company, a 62% premium over their value from yesterday Web 2.0 Money: The Money & Business Behind the Web 2.0 Innovations | Report as abusive

Hands off my Yahoo! Stop acquiring Yahoo! at some
point in the future. It’s evil!

Yahooooooops!? Forget it, Bill Gates!

Posted by Fullplug | Report as abusive