What’s The Juice With Yahoo and Microsoft Lately? … For The Layperson, Part I
Throughout the past few days, I’ve heard plenty of people buzzing about what’s going on between MSFT and Yahoo, and it has made me realize what an insulated community I exist in. I take it for granted that everyone around me has the same nuanced understanding. So, I’ve broken down what;s going on - as I see it - for the layperson. Please take a gander.
Synopsis: Yahoo’s lagging stock price, and hot Internet properties have made them an attractive acquisition candidate for a long time. Unlike Google, Yahoo has long been in the “content” game and as such, has gained a huge - we’re talking mega-ginormous – following in many areas. For example, Yahoo Finance, is and has long been the #1 business website (in terms of traffic) on the Internet and Yahoo Fantasy Leagues have been the #1 destination for sports enthusiasts. Furthermore, Yahoo has made some surprisingly nimble acquisitions such as social bookmarking pioneer, del.icio.us, and the now ubiquitous photo-sharing platform Flickr. However, with so many eyeballs comes a huge sticker price, one that makes Yahoo a hard company to swallow. With Yahoo’s share price dipping below $20 and a large round of layoffs lowering cost concerns, Microsoft decided to crack open its always sizable war chest and bring an offer to the table. This was a chance for Microsoft to not only take out a competitor, but to get good R&D (Research and Development), a whole pipeline of products, and essentially, “buy” there way into a serious online presence that they’ve yet to achieve organically. Additionally, they’d save tons of money in operating costs with their new acquisition due to “synergies in operation” (ie. being able to fire everyone at Yahoo whose job already exists at Microsoft – management included).
With an offer on the table, the Yahoo Board of Directors were forced to consider it, and in doing so, put the company “in play.”
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