Techcrunch notes today that the MS/Yahoo merger has turned into a very costly battle for Microsoft, with a drop in stock price resulting in $40 billion in market capitalization disappearing. Given that 50% of their offer was in stock which is now worth much less, the value of deal has fallen. Yahoo’s Board has reportedly rejected the offer.
We never saw the synergies that many on the left Coast were trumpeting. If two dinosaurs of different species were to mate the likely outcome would be some kind of mutant, deformed offspring incapable of survival, especially when surrounded by the agile, young and highly intelligent Google mammals flinging tiny but effective spears their way.
The other speculative outcome has Google agreeing to provide search advertising services to Yahoo, bypassing their poorly conceived Panama ad platform. One area where Microsoft has been unaccountably successful is lobbying in Washington, somehow convincing the congress that Google merging with anything might constitute a monopoly. Given that Microsoft is a monopoly they should recognize one when they see it. So I doubt Google would put themselves through a battle to align with Yahoo for a sliver of the search market they will probably get anyway.
Interesting to watch.