Well the rumor mills are turning again and this time it is a bit too strong (my assumption based on the fact that the Google juggernaut is rolling on and nothing can and is being done by Microsoft and Yahoo in individual capacities to stop the rolling ) Well the rumors are that Microsoft is going to offer 50 billion dollars for Yahoo
Looking at Yahoos latest financial standings that looks like a good price for financial details see the following
http://finance.yahoo.com/q/ks?s=yhoo http://finance.yahoo.com/q/ks?s=msft http://finance.yahoo.com/q/ks?s=Goog
According to the latest updates Microsoft has a cash reserve of 25.48 billion at their disposal so if they go with the valuation of 50 billion and yahoo decides to accept it then they still have to raise another 25 billion more which I don’t think will be a problem for them and google also has 11.94 billion dollars in cash( I am also looking out to see who is going to be googles next acquisition target)
Yahoo also has cash reserves of 2.35 billion but then again the other two giants are debt free where as yahoo has a debt of 749.76 million
well I would guess that bigger question is does yahoo want to sell to microsoft??
or the other way around does microsoft want to buy yahoo??
Both the parties have not yet confirmed any sort of negotiations but then again this is not the sort of deal u want to put it out in the market before anything concrete happens.
But if microsoft is willing to buy yahoo then the questions that need to be answered are
1)How much will they pay??
2)What will they do with yahoo (brand yahoo is one of the most recognised brands in cyberspace)??
3)Which of yahoo offerings will survive and which ones will vanish??
4)Will their shareholders be happy with this deal (since yahoo is almost in a coma state at present)??
5)The mother of all questions would be will be combine entity be able to take on google (otherwise microsoft shareholders will not see any benefit of this deal)?
If this rumor is true then I guess Microsoft’s concern is not the price tag or the debt or the usefulness of yahoo brand and access to its loyal users but the fact that integrating yahoo’s assets (IP and web properties) into Microsoft’s family of products will be a gigantic task and all the issues faced while integrating and migrating hotmail into the msn family will come back to haunt them and also the open source movement will lose one of its champions yahoo is the user of many open source offerings like php, mysql, apache etc etc
Well only time will tell whether this is true or false but overall I dont think the merged entity will be able to give Google a decent fight why you ask? well because google does one thing well and that is search unless someone else comes up with a better search engine google will remain in the limelight (yes I have tried Microsoft search engine and it is good but then again it is not part of Firefox
and also it does not make you come back looking for more information the way Google does)