Interesting.

Microsoft is in a bad position. You can not negotiate if you are not willing to walk away.

I really don't see how microsoft owning Yahoo will improve Yahoo or MSFT's ability to compete. They should know they are competing with a BRAND name which is difficult to overcome. Throwing money at things doesn't always beat out a brand name.

What MSfT is probably slowly realizing -that the folks pulling the financial strings are not even considering- is that they might buy the stock of Yahoo!, but they'll never get the spirit of Yahoo!, so in the end they'll spend a ton of cash for an empty shell.

Now look at this.
NewsCorp is in talks with them.

[online.wsj.com...]

A sale to Microsoft still appears to the most likely scenario for Yahoo. Microsoft is likely to be willing to increase its offer. The company has said it is willing to "pursue all necessary steps" to consummate the deal, which could mean going directly to shareholders.

If Microsoft, in fact does not get this done, that’s not going to look very good. They have said from the beginning; surrender or we'll take you by force. You just can't say stuff like that if you don't mean it, because the next time around you’re a joke.

It's going to be very interesting, and it’s going to have a pretty profound impact on a lot of people, especially the ones that hang around here.

I think either way it's going to be good for me, seeing as how Yahoo is my lowest ranking search engine. I do pretty good in MSN and great in Google.

So who around here is sweating this deal and who is looking forward to it? Anybody hope that News Corp or AOL get the big Y!?

This is a big surprise. A major investor in Yahoo is asking for more money per share. Wow! MS should definately take that advise.

Newscorp or as a matter of fact no other tech/media company on earth has the kind of cash that is needed to fund the deal. So it is MSFT all the way. Looks like the deal will get done at $2-5 more than $31 that MSFT has already offered. There is always some scope for negotiations. The most important point here is that BIG institutional investors are very keen to exit Yahoo.

The founders don't have the significant enough number of shares to influence the decisions. They will come around the table by next month after exploring all the options.

I personally am not sure if I like the deal or not.

From a Yahoo partner point of view I dont know how it will affect my revenue I make from working with Yahoo. I am not sure how they will merge ppc networks across both search engines.

From an advertiser point of view I am even more confused as the new Yahoo PPC centre is actually not too bad since they relaunched. But then again MSN ad centre is not particulary good from any point of view.

I cant see any positives yet...

Bigger isn't necessarily better. The failure of MSN and Yahoo to compete with Google was never a question of size; it was a failure to be quick and innovative.

Bigger usually doesn't make a company faster, and engineers working for MSN instead of Yahoo won't think any smarter or faster. The problem isn't money; it's brilliant minds.

Yahoo was working on a new system, which had to be delayed, and never went far.

Its YPN for ads is still (!) in Beta and still limited to the US. It is also still notoriously unable to serve up relevant ads because its targetting is awful.

Google Adsense got out of Beta years ago (or was it ever in Beta?); its ads are very relevant; and it's been international for a long time.

These Yahoo failures are mostly engineering failures (which poor leaders have allowed, by not replacing the engineers).

MSN's ad network isn't very impressive, either.

So who is going to get Yahoo ads into relevancy? Who will get it out of Beta? And when will it go international?

MSN needs a Steve Jobs, who turned Apple around by ideas and vision, e.g., the ipod.

What big new thing has ever come out of MSN in the last ten years?

Online MSN is in the similar sitation compared to Google as Apple is relative to MSFT--a small fraction of the market.

Unless and until MSN can poach or find the next Steve Jobs, or some hot shot from Google, its plans leave little cause for optimism.

p/g