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MicroYahoo: A marriage made in heck

MicroYahoo: A marriage made in heck

Maybe 2008 will turn out to be a good year after all. Or at least an interesting one.

We interrupt our regularly scheduled Geek News roundup to bring you this bulletin filled with conjecture and unsubstantiated opinions.

In what has to be both the biggest tech news story of the last year and the least surprising, Microsoft has made a direct offer to put Yahoo investors out of their misery by swallowing up the company -- lock, stock, and two chokin' barrels.

Timing is everything. Yahoo's share price is swirling down the toilet, even though it posted numbers (US$205 million profit in Q4) that many companies would kill for. Even at US$44.6 billion (US$31 a share), Microsoft's "generous" offer isn't outrageous. Look at it this way: They're buying 500 million Yahooligans for around US$90 apiece. That is dirt cheap. And they're leapfrogging into a solid No. 2 in search behind Google instead of a pathetic third, just by signing a few dozen documents.

Which is why I predict that Microsoft will not be the only suitor, and some major media company (CBS, News Corp.) or broadband provider (AT&T, Comcast) will dive in with a competitive offer. You know Larry Ellison is kicking himself for not doing it first, because he can't stand to be one-upped by You Know Who.

And after that, well, who knows?

If Microsoft wins the bidding (and I think they will, because they need it more than anybody else), I predict an unholy mess for a good long while, along the lines of the Time Warner/AOL mishegas -- only with even bigger egos to manage.

Yahoo employees will leave in droves, and Google will happily snatch up the good ones. Redmond will slough off the redundancies between it and Yahoo, and it will mostly make the wrong choices -- choosing to keep the stuff it's developed in-house (like Hotmail) instead of the superior products (Yahoo Mail). The revenue bump from online ads will be nice, but merging the two brands will be like a python trying to digest the engine block of an Oldsmobile Cutlass Supreme.

And while Microsoft execs cut a groove in the ozone commuting between Sunnyvale and Redmond, trying to manage two bureaucratic morasses at the same time, the Google machine will chug merrily along, introducing new mobile platforms to carry its ads and kicking Microsoft where it hurts most: in the operating system.

Maybe 2008 will turn out to be a good year after all. Or at least an interesting one.


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