Tuesday, May 6, 2008

Slip Or Save?

Microsoft Is Holding The Knife To Yahoo!'s ... ?

Interesting times here in Silicon Valley with Yahoo! rejecting, for the nth time, overtures from Microsoft and then being surprised that Mr. Softee walks away. Fascinating stuff and a topic that generated a lot of column inches on web-pages and newsprint alike.

Witness too lots of backpedalling from Yahoo! executives and board members as they try to explain how this will be good for Yahoo! in the long run, to be set against a bunch of really rather pissed-off institutional shareholders who think they just got royally screwed, and you have the stuff of SV legend.

However, this isn't going to be the end of the road, not by a long chalk. Expect warm-and-fuzzy overtures from Yahoo! to Redmond saying, in effect, "just kidding", alongside Microsoft getting more aggressive about undertaking other moves aimed at further weakening Yahoos! operating abilities. Yes, Yahoo! could do a deal with Google to outsource search but that would fundamentally weaken their core value to MS or indeed anyone else. It's also been talked about that they could buy AOL but frankly the laws of thermodynamics are against them if they believe that by tying two rocks together the combination will be able to stay afloat better than one on its own.

Whatever way you choose to look at this the real loser will be Yahoo! regardless almost of what metric you apply. Beware a woman scorned? Probably easier to deal with than a Redmond rebuffed.

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