Microhoo: Gone but not Forgotten

IDG News Service — Mon, 05 May 2008 15:23:57 -0700

We'll never know whether a Microhoo would have been a best-of-both mix-up ready to challenge Google with hot new consumer offerings, or whether it would have been a horrible culture clash that brought both companies to their knees. Or will we?

I have to say I was surprised when Microsoft pulled out (as were many analysts who knew a lot more than me). I thought Redmond's increased bid was a sure sign that the companies were settling into negotiations that would surely end with a buyout - though there are now indications that there might not have been a formal, increased offer. Silicon Alley Insider has some additional analysis on the suggestion.

Yahoo's shares tumbled as expected, down 15 percent to US$24.37 at Monday's close. Microsoft dropped just a smidge (16 cents), and Google bumped up 2 percent on the news.

In the midst of the collapsed-deal finger pointing, though, some suggest that a buyout could still happen. The San Francisco Chronicle ran a story with this paragraph:

"The acquisition of BEA Systems Inc. by Oracle Corp., completed last week, could provide a model for Microsoft. Oracle, the Redwood City business softwaremaker, withdrew its offer for the rival San Jose company last year after being rebuffed, only to swoop in later with an $8.5 billion bid that was ultimately accepted."

TechCrunch also cites a Citigroup analyst as saying "an eventual combination with Microsoft is still 15% likely."

Me, I'm not even going to try and make a prediction. But I do hope that whatever happens, Yahoo sticks around as a strong Internet player, with a cohesive overall plan capable of making the most of its top-notch sites and services.