Microsoft buys Yahoo

Microsoft buys Yahoo?Microsoft to buy Yahoo for real this time? (BBC report) It was announced late yesterday that Microsoft has put in a bid to buy Yahoo for $44.6B, some 62% above where the Yahoo stock price closed on Thursday. Granted Yahoo stock has dropped 46% over the course of the last 3 months (high of $34 in October). Speculation was rife last May that this deal would go down (see SearchEngineJournal post or this Friday Traffic Report blog). There was talk of such a deal in 2006 as well…(see here at Scobleizer).
Google versus Yahoo?  Coming out of the garbage
The Yahoo stock performance and, more importantly, Google‘s continuing dominance obviously have created an environment where this deal would make sense. At 62% above the last close, the premium would look hard to reject from the Yahoo board’s perspective, especially after CEO Jerry Yang had just announced that 1000 people would have to be laid off.

My immediate analysis would be:
– obviously need the anti-competition authority’s approval on this one
– Yahoo’s corporate culture will take it on the chin
– some intelligent cross-fertilization would likely make the combined entity a viable competitor to Google (which would be a good thing), but they will need to find and communicate a real point of difference. How will they manage to compete better in China?

And in case that deal falls through, I invite you (and/or Microsoft) to peruse this site which considers the Top 100 alternative search engines available. What’s interesting is the churn in and out of that top 100 list… And I have been turned on to the KoolTorch search engine which provides a kind of mind-mapping result to your searches. Quite Kool indeed — and a nifty educational aspect (if you enjoy categorization!).

Your thoughts? If you want an interesting thread on the topic and the potential impact to open source work, go visit LinuxJournal. There’s lots of commentary to read through there…