"This is a strategic offer by a cash rich company going through menopause and looking to blossom in its next phase of life."
-- Herb Greenberg, MarketWatch

"Here's the ironic part: The 2 most visible losers in the search area may be getting together -- and somehow, that's worth 150 point swing to the Dow futures."
-- Barry Ritholtz, The Big Picture

"For Yahoo shareholders, the message is clear: Take the money and run. The message is also clear for Microsoft shareholders: The onus remains on Redmond to sell, sell, sell its case. This has the feel of AOL/Time Warner 2.0 until proven otherwise."
-- Dennis Berman, Deal Journal

"Given the plunge in Yahoo stock and the prospect of a damaging recession this year, if now isn't the right time, it's hard to imagine what is."
-- Colin Barr, Fortune Daily Briefing

"We all knew this was coming. Yahoo! was cheap. Too cheap. And a mess. Rats were leaving the sinking ship en masse. It was not sustainable. Something had to happen."
-- Fred Wilson,A VC

"With it's I-shall-have-it bid for the troubled Internet giant, Microsoft has made a bold, slightly insane lunge to ensure that it is not sidelined in war with Google to control the Internet. You have to guess the phones were ringing at Google HQ this morning, as other companies-from News Corp. to eBay to Comcast are trying to figure out how to make a competing bid to the $31-per-share offer Microsoft lobbed today. The obvious scenario: That Google would guarantee billions of dollars of revenues from search monetization for another company, so it could enter the race to grab one of the most trafficked sites on the Web."
-- Kara Swisher, Boomtown

"It's a shotgun wedding, and Google's holding the shotgun."
-- Bryan Stolle, Partner, Mohr Davidow Ventures

"In general, cross-organizational cooperation has not been a strength of Microsoft, but with barbarians like Google at the gate, it might be time to break down some silos."
-- Forrester's Rob Koplowitz and Kyle McNabb

How is Steve Ballmer like a White House contender? In the heat of the presidential primary season, it seems Microsoft has taken a few lessons from Clinton, Obama, McCain and Romney: Draw a contrast with your opponent and explain how you will prevail, but don't mention them by name if you can help it.

You'll never find the word "Google" in Microsoft's press release or its letter to the Yahoo board, but the search engine and online advertising giant is implicitly ubiquitous:

• "Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners."
• "The industry will be well served by having more than one strong player." [Admitting there is only one now? Ouch.]
• "Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers."

Not that naming or not naming Google will make much difference. In a highly unscientific poll based on a leading news search engine (ok, it was Google News), roughly 80 percent of coverage about the Microsoft-Yahoo offer mentioned Google in the first sentence.

Yahoo didn't even have the Microsoft bid on its front page until about 10:00 am EST, some three hours after the news broke. Even then it was buried about 11 headlines below the story that Yahoo considered the most important of the day: "How scratching brings relief."

UPDATE: Ballmer's internal email to Microsoft employees, obtained by TechCrunch, doesn't mention Google either, but states: "Together, we'll create a company that is in a much better position to compete against an increasingly dominant player in this market"

Microsoft has made its long-rumored takeover approach to Yahoo, in a proposed cash and stock deal worth $44.6 billion. The $31 per share offer represents a 62 percent premium to Yahoo's closing stock price -- but is almost exactly equal to its stock price back in May, when a potential tie-up was leaked to the press. The elephant in the boardroom for this deal is, of course, Google. As Microsoft stated in its letter to Yahoo: "Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition." The letter also said that Yahoo rejected an acquisition last February, and noted: "A year has gone by, and the competitive situation has not improved."

China has muscled in on BHP Billiton's attempts to buy rival Rio Tinto, with its biggest aluminum producer teaming up with U.S. group Alcoa to buy a 12 percent stake in Rio. Friday's $14 billion swoop by Aluminum Corp of China (Chinalco) comes days before a regulatory deadline next Wednesday for BHP to make a firm offer for Rio or to walk away.

Societe Generale was studying bid defense options on Friday as a newspaper said Credit Agricole, France's third-largest bank by value but the biggest in terms of retail branches, had hired Lazard and its own investment bank to study a bid. Top French bank BNP Paribas has already confirmed it will consider bidding for SocGen in the wake of a massive rogue trading scandal.

The theme of this year's World Economic Forum is "collaborative innovation," but there's still nothing like a bit of bare-knuckled verbal sparring from Davos veterans Martin Sorrell and Maurice Levy.

There has never been much love lost between Sorrell (left), chief executive of UK advertising company WPP, and Levy (right), the CEO of its French counterpart Publicis. The not-so-friendly rivalry flared up on Thursday over Publicis' recently unveiled partnership with Google.

According to the joint Publicis/Google announcement, the two firms have been working together for a year to combine Google's technological know-how with Publicis's analytical and media planning expertise. One executive familiar with the deal said each firm will "embed" staff within each other's offices.

"Google is not a short-term friend and a long-term enemy," Levy said. It was a barb aimed at Sorrell, who categorized Google in exactly those terms last year.

In Davos on Thursday, Sorrell was dubious that there was much substance in the partnership between his rival and the Internet giant, which he has also described as a "frenemy."

"Next time I meet with (Google CEO) Eric Schmidt I think we'll send out a press release," Sorrell told Reuters in an interview , which was also broadcast into the virtual world Second Life (see picture of Sorrell's avatar, right). "This morning I met with Maurice Levy, does this mean we're putting out a joint venture?"

"What Publicis is doing represents a little bit of concern that they didn't get the technology right," Sorrell added. "I think Maurice is acknowledging a a bit of an Achilles heel when it comes to technology."

Click here to listen to the audio of Sorrell's comments.

Your move, Mr Levy.

In a mobile video interview with Reuters, he responded to Sorrell's comments (View the full video at the bottom of this post).

"I'm sorry Martin said that -- it's really cheap, but it's probably the result of his lack of understanding of technology," Levy said. "He's a financier, I'm an engineer, and you can see the difference. I'm pleased with what we have done, and I'm sorry that my dear friend has not understood it."

The spat between the two advertising execs may have little effect outside the cloistered confines of Davos. WPP remains one of the largest clients of Google, spending some hundreds of millions of dollars per year on behalf of its advertising and media buying clients. And underscoring the limited scope of the Google-Publicis partnership, Schmidt said last week that Google "will never become an advertising agency."

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(Additional reporting by Nic Fulton in Davos and Dominique Vidalon in Paris)

Emma Thompson discusses her reasons for attending the World Economic Forum

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Spark Networks, owner of the niche online dating site JDate, is looking for a mate of its own among a crop of online media companies including Yahoo, IAC/InterActive and News Corp’s MySpace, the New York Times reported on Friday.

The highly targeted audiences from sites like JDate, BlackSingles and CatholicMingle could be a boon for media companies looking to charge a premium for advertising. The Times said the price could reach as high as $185 million — above the market value of $131.4 million based on Thursday’s closing price — although it only cited unnamed “analysts” so that number should perhaps be taken with a pinch of kosher salt.

The company’s stock ticker is, appropriately, LOV.

Spark is home to more than two dozen dating and personal sites, ranging from AdventistSinglesConnection to IndianMatrimonialNetwork. AmericanSingles and BlackSingles receive the most traffic.

But it is the JDate — the self-professed “leading Jewish singles network” — that has made the biggest cultural impact, including a mention on The Daily Show. One well-received JDate billboard in Times Square, referencing the Four Questions of Passover, asked: “Why is this site different than all other sites?”

Read the New York Times article here.

The smirking face of media mogul Rupert Murdoch greeted staffers at the rival Sydney Morning Herald on Wednesday after a hapless interior decorator installed his picture on more than a dozen floor-to-ceiling pillars in the paper’s new offices.

Murdoch has long coveted Fairfax Media, the Morning Herald’s parent company, but been unable to buy it due to media laws — apparently causing confusion for Fairfax’s interior designer, leading to the spooky prospect of a larger-than-life picture of the paper’s main rival hovering above its newsroom like the eyes of Dr. T.J. Eckleburg.

“It seems that the designer wanted a media image and picked one of Murdoch, thinking he was Fairfax’s owner,” a newsroom source told the AFP.

Murdoch’s News Corp. conglomerate sold a 7.5 percent stake in Fairfax as it moved to acquire Dow Jones earlier this year.

Read the full Reuters story here.

(Photo credit: Australia’s ABC News)

Google’s long-anticipated foray into virtual worlds seems to be gaining speed, according to the discussion at the Virtual Worlds Forum in London on Wednesday.

The company has already announced a partnership with Multiverse which will allow users to create their own virtual worlds by combining Multiverse’s technology with 3D data from Google Earth and Google SketchUp. And word has leaked about a mysterious project that Google is field testing at Arizona State University.

Among the industry’s insiders there is no doubt that something big — a Second Life killer, or something else entirely — is in the works, according to Jess Mulligan of Cyber Sports Ltd.

“Everybody in the industry knows Google are building a virtual world - they hired all our friends to work for it,” Mulligan told conference attendees.

“You ain’t seen nothing yet. This is just the first couple of steps down a much longer and potentially very interesting path,” Multiverse co-founder Corey Bridges told us on the sidelines of the conference.

Google spokesman responds: “We’re always looking for new ways to help our users connect with each other, share information, and express themselves, but we don’t have any new details to share at this time.”

Incidentally, director James Cameron sits on Multiverse advisory board and is currently shooting his next film in New Zealand. Coincidentally, or not, it is titled “Avatar .”

(Photo: Reuters / Google co-founder Larry Page at the 2006 Consumer Electronics Show)

Susan Lyne went from greenlighting “Desperate Housewives” to selling them house paint and linens.

But the CEO of Martha Stewart Living Omnimedia has no hard feelings about her former employer Disney, which she abruptly left in 2004, only to see the shows she picked, which also included “Lost,” become monster TV hits.

Asked at the Reuters Media Summit which media company she would hypothetically invest in (barring her own), Lyne hesitated before naming Disney.

“Of all the media companies out there, they have a brand that actually means something, they have phenomenal content, and a real understanding of the future of media,” she said. “There’s a lot of real talent at the company and on the board. I think having Steve Jobs on that board is hugely valuable to that company.”

But would she have said the same before Robert Iger replaced longtime Disney honcho Michael Eisner?

“No,” she said. She also said she’s recently returned to watching “Desperate Housewives,” though she’s “not religious” about it. Lyne also gave a thumbs-up to Aaron Sorkin’s meta-TV show “Studio 60 on the Sunset Strip,” a behind-the-scenes look at a comedy sketch show which happens to feature a charming female network boss, played by Amanda Peet.

“I think that show is just brilliant, it’s uneven but it’s really fun to watch,” she said.

Pirates, at least the Caribbean kind, have been good to Walt Disney Chairman Dick Cook.

Those ones on the Internet? Not so much, but that doesn’t mean he doesn’t care about their opinion.

“I hope we make the kind of movies that people want to steal — not that we want them to steal them,” he said at the Reuters Media Summit on Thursday.

“Youre not going to upload, download, sideload or however way you want to load, a turkey. Youre going to do that with movies you want to see.”