The big story of the day: Microsoft aims to acquire Yahoo to the tune of a lean $44.6 billion dollars. And what a story it is.
It makes sense, of course. Microsoft’s web presence isn’t where they want it to be. While long-term gains may eventually be gained from their online service convergence into the “live” brand and domain, what they have migrated now is fractured, and imprinting the live brand rather than the old services into peoples’ minds will take a while yet. Worse yet, Microsoft is loathe to let go of the MSN brand, which it has invested countless time and money into: MSNBC has proven its worth, and with the home page of seemingly every other web browser in the world set to msn.com, it’s hard to fault them for this. However, the move is one that has to be made if Microsoft wishes to truly unite its web presence.
The fight isn’t about services though, of course: it’s all about advertising. Microsoft’s purchase of aQuantive last year has made headway into the battle, but has been largely disappointing. The Google advertising juggernaut continues to plow forward, and with the DoubleClick acquisition having been approved and looming on the horizon, the advertising market for Microsoft is starting to look less like an uphill battle and more like Mount Everest.
So, Microsoft’s purchase of Yahoo would earn it at least a bit more foothold in a market one of its most fearsome rivals dominates. But what does Yahoo gain? They aren’t doing well financially at the moment, but then again, they haven’t been doing well financially for years. Perhaps the execs will see this as a chance to finally dump their woes on someone else for good; it remains to be seen. For now, while they appear to be extremely cautious about their public reactions, their stock is leaping by spades.
While Yahoo isn’t what it used to be, it will be extremely interesting to see how this story unfolds; could this be the end of one of the web’s biggest giants?