More details are emerging on round 2 of Yahoo/Microsoft: Instead of a simple straight up acquisition, Microsoft may be able to pull off a deal where they get to pick off just what they want - search - and leave the rest of Yahoo and its troubles behind.
This is a deal that would obviously cost Microsoft much less than a $40+ billion full buyout. And Ballmer could quiet the Microsoft employees and stockholders who were making it known that they hated the original Yahoo deal. At the end of the deal, Microsoft would own Yahoo’s lucrative search and search marketing business, and be a stockholder in the resulting entity. That final version of Yahoo would certainly use Microsoft for at least some of its advertising (Yahoo’s display advertising business may stay with Yahoo).
I suspect a deal will be done quickly - Yahoo’s Yang and supporting board of directors are already being beaten senseless by their own stockholders and they can ill afford another round of incompetence.
If only Yahoo could go back to Febrary 2 and just take Microsoft’s original offer. Everyone but Google would have been better off. In fact, if I were them, I’d be spending half the ongoing negotiations just trying to get Microsoft back to their original offer. Who knows, Ballmer may even go for it.
Also look for Microsoft’s big search announcement on Wednesday at the Advance08 conference.
On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You’ll hear more about our plans Wednesday.
Sorta true but there’ll be a friendster 3.0 or Ryze 5.0 for us Geeks to go to to pal around other geeks
Everyone but the users would be better off with the original deal. Seems like Y! will make more money with Google ads, while selling a unit, which TC thinks is eventually dead, to MSFT for a hand sum.
What TC has never explained is how MSFT, with their failed online strategy, and Y!, also bashed by TC at every chance, can do what neither of them can do separately?
Why does FB, a company whose business model could vanish virtually overnight, get so much love from TC about their potential future, but Y!, a mature player, with lucrative properties, a huge audience, et al, is spoken as if it’s already dead?
Y!’s “already dead”, FB is great, and MS needs a half-dead company Y! to beat Google?
Something doesn’t compute.
Was I just seeing things or was the Techcrunch site reverted back to the Wordpress default theme?
asad - we’re making some IE-based tweaks.
Truly hope Yahoo isn’t as dumb enough to give away their search to an inferior organization like Microsoft who has Fucked up their own search.
The only possible positive outcome would be Yahoo being the default on Internet Explorer - which is the only saving grace for MSN
But what the HELL can Microsoft provide Yahoo search with - perhaps big bucks - but it hasn’t help MSN
Steve deserves one of these….
http://www.anorak.co.uk/politicians/184076.html
I feel lot of great things will happen to search this week.
Does the site name Tech Crunch was inspired when Mike was eating a chocolate Crunch bar?
how much Y! stock do you own mike?
@7 hahaha good point !
Am I the only one who gets an impression that this is a paid strategic “blog placement” courtesy of Microsoft ?
You know everyday this blog has more personal bias than before, sooo much bias and @7 is funny. LoL.
I think Yahoo guys wont let go there reliable sources
I think Mike is not funny.
Don’t be too hard on Mike, he is just a lawyer!
Michael: You might have your sources, but I dont see why Yahoo will give its search to Microsoft.
Also, you are a big proponent of $33 deal; but now forget about the past and look at the present. YHOO is trading at $27 today. It NEVER went back to $19.
Microsoft should have put some more dough in its offer. Or, it should have an alternate strategy.
Its good for everyone that the deal did not go through. M&As are hardly worth the hype that they live in.
I think Yahoo is dead meat, because they didn’t focus on what’s important you think Google you think search, whats Yahoo! they lost the game, Icahn is in, Microsoft is in, Yahoo is out.
Hey Mike why does TC last posts suck more than before? And don’t erase my post answer mee!!!
Uhmmm… about that Wednesday announcement… don’t be drinking too much MSFT cool-aid.
The entire tone of this announcement (check out the full text here) is part of the reason why MSFT can’t hack it on the Internet. Who talks like that? (AND believes themselves!)
To wit: “… reinvent portal” and “deliver new experiences” … bla, bla, bla (BTW, the portal model is part of the problem, it doesn’t really work. So it would be better to “un-invent” it.)
“… enable new paradigms in search”… hahaha… good one.
That is how they manage to make even cool things uncool. Shudder to think what they would be doing to a purchased Yahoo, users would be disappearing faster than you can say “$45B down the tubes”…
“… algorithmic search”… is there any other kind?!? Maybe he means vs. the still broken search inside of their own Windows OS…
The only two useful things out of this are:
1) Acknowledges MSFT deep branding issues. Now fixing them is another matter. For that they would first have to first get over themselves. Chances of that happening?
2) They DO need to innovate in search if they want to have any chance to outflank Google. Chances of that happening? Not good since Ballmer wanted to (and apparently still wants to somehow) buy Yahoo/Search.
If they really had anything game-changing up their sleeves, they wouldn’t have even considered making that offer. Maybe AFTER launching such a “secret weapon” and running Yahoo further into the ground. Sounds like pipe-dreams to me…
Arrington, Microsofts loudest and most obnoxious shill, is once again blabbing about how Yahoo has no alternative but to take Microsoft’s bargin-basement rectal exam.
Seriously, can you say something new? Can you admit to your public how much money you get for flogging the original unsolicited takeover ‘offer’?
Let’s be serious here, Microsoft is more desperate than Yahoo, otherwise they wouldn’t be paying a two-bit hack and his irrelevant blog to push so hard on a deal that is done and gone.
Seriously, does anyone even use Yahoo! for search anymore?? I only use Yahoo! for Mail and other apps.
@2 things do compute when you consider that Arrington is getting paid by Balmer to push the dumbest possible analysis (granted that it helps that bald moron retain his job). Microsoft has openly and covertly paid bloggers and journalists to shill for them in the past, and this is no exception.
And yes, when the same guy claims that Facebook can do no wrong or that turds like Mahalo have a future, you know that this and all previous commentary on the Yahoo ‘deal’ (which nobody at Y! asked for) is pay-for-post.
Arrington, you FAIL at both analysis and honesty.
Well if it just gives its search to Microsoft , than Icahn is screwed big time, as market will punish the shit out of yahoo. So that is not going to happen as that is the major monetizing product in the whole yahoo basket, even Icahn does not want that. To get rid of Icahn, Yahoo should make sure they do something which would make Yahoo not an option for Microsoft like buying zoho and partnering up with google. In the end yahoo + microsoft both are going to fail no matter what kind of partnership they form as Microsoft has sucked in its internet strategies before, and the investment in Facebook will also fall flat! Both there search engines are on a downward trend, and adding them would not really help, even in the long run.
I think Icahn will be the one hurt, as he really though Microsoft will go through with the deal no matter what ! as Yang thought Microsoft really needed Yahoo no matter what.
Search stinks compared to Find
I wont jump the gun and say search 5.0 is boring/slowing, but I do like Barney pioneering Find 1.0 (via http://www.PowerSet.com) the way Adrian Scott was 1.0 with Ryze
“If only Yahoo could go back to Febrary 2 and just take Microsoft’s original offer. Everyone but Google would have been better off. “
ok - no longer helpful. I’m not reading Tech Crunch any more. Rolling bones would get me better insights.
So sad - you guys used to be good and provide a useful service.
@20 I agreee with you …. this is not right , this post does not make sense!
yahoo should be thanking ms for picking through their dumpster of declining business assets and dealing with their clearly incompetent management.
seriously, michael, stop writing and let Eric take over, you writing sucks!!!
How will Yahoo! make money if they sell the search business to Microsoft? Am I missing something.
Sigh, Mike is right this time. Wednesday.
@27- display advertising -well its just a bluff from Microsoft.
In some ways, it does seem this straightforward-like it could be checkmate.
I suspect there is going to be a 3 way deal with YHOO-MSFT-EBAY brewing.
MSFT will buyout search business from YHOO, EBAY will get the auction business (Japan, Korea and China) and YHOO will just be a media company (probably will get Skype from eBay)
If MSFT really gets the yahoo’s search there would be no competition to google. From what I see yahoo is working hard on improving it’s search and could actually compete with google. MSFT rolled out a clone of google’s search without even trying to bring some innovation in.
I still don’t see what the advantage would be when MS takes over Yahoo!.
Yahoo! does not need anybody. They are making good profits (Which is rare in the Internet business) and they bring new innovations from smaller Yahoo! branches all over the World. With a MS - Yahoo! merger, all that knowledge would fall apart.
It might be not to bad of an idea to sell the search Business and move on. Yahoo! has so much more potential and Yang would still be in control of his legacy.
And what is it with all this “Fighting Google” thing? Why would anybody want to fight Google? As history has shown, this will change all by itself as new innovations will come along and Google will be in the same position as Yahoo! is right now. Don’t fight it, invent new money making ways and Yahoo! is good at inventing.
Don’t forget. Google has just one thing playing for them and that is search. All other products they have are crab!
Best thing that happened to both Microsoft and Yahoo was the deal falling through. Each would have made the other sink further. Now they are left to their own devices, and their troops have gotten the fear of god as a motivator.
Regarding FB, does anyone think that Microsoft would ever offer enough billions to Mark Z to get him to sell?
@33 Martin, when a company controls 80% of the any market it is always bad. There are lots of content busineses that depend on traffic they get from google. One push of a button, one additional filter and they don’t have any business any more.
Gmail is actually a great innovation from google. They were the first to risk making an entirely java-script based interface and their spam-filter is the best. After gmail appeared I forgot about own pop3-boxes.
Should I save Yahoo?
should YAHOO be upgraded from a Web1.0 to a Web2.0 or better yet a Web3.0 portal?
All it takes are a few simple tricks, hit the market and the masses will lop it up. End result stock going through the roof. Microsoft seeing the value makes an offer of US$80 billion. Do you dare me? Who are you to dare me? LOL
Y! will continue to surprise the world — what else?
Question is, does any one from YAHOO read this blog? My guess is nope. No one important that is. My next guess is, even if people who read this blog know how to reach those guys, they are Pro Facebook, hence Pro Microsoft. Long run. Not short run economics.
You see that is why I told Steve Yahoo is toast with or without Microsoft. I like this game. I wonder if it is too late to play. Jerry, are you listening? So simple, yet so complex for the brightest minds. Once a man, twice a child. Secret, never grow up.
“Everyone but Google would have been better off…” What about us the end user? Can you share with me why you’re such a big M$ fan-boy?
Um, most of these comments are so obsurd, I don’t know what to say.
Most of these comments are from anonymous sources with URLs that are actually fake (why bother?). You all know your IP’s are logged right?
This is a completely speculative post; he never said otherwise
@19:
That is why I find a Y! search deal to be near-worthless. Yahoo is my homepage, I use the mail, fantasy football, etc, but never search.
I google things, check wikis, check relevant websites I know the urls to, etc, but Y! search (as MSN has long been) is simply irrelevant to my routine web navigation. Google obsoleted both of these companies in search; instead of combining buggy-whip companies, they each need to be figuring out how to make steering wheel grips and seat covers.
And what happened with the advertising deal between Yahoo and Google?
LOL
In this game it is not about the money anymore, it is about bragging rights and who has a superior brain.
Checkmate
(Haven’t read all the comments, so may be repeating few things here)
“where they get to pick off just what they want - search - and leave the rest of Yahoo and its troubles behind”
I believe you have been trying to convince us all this time is “search” is the actual trouble for Yahoo. Now suddenly, it becomes the most lucrative part and other parts of Yahoo are trouble? Aren’t they still number one in display ad?