Microhoo or Yahsoft? Microsoft/Yahoo! merger deal bid is on again

The Microsoft/Yahoo! merger deal bid is rumored to be on again. In IT Blogwatch, bloggers go back to asking if we should call the new company Microhoo or Yahsoft.

By Richi Jennings: your humble blogwatcher, who selected these bloggy morsels for your enjoyment. Not to mention inverted iPhone snobbery...

Douglas A. McIntyre broke the story:

Sources at a major client of investment house ThinkEquity say that the firm considers a Microsoft (MSFT) link-up with Yahoo! (YHOO) in the search business to be “imminent”. ... [Others] speculate that under the terms of the arrangement, Yahoo! will be paid $3 billion upfront and will get 11% of the revenue that its searches provide after traffic acquisition costs in each of the first two years. In the third year, that figure would go to 90%.
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If Microsoft can finally closed the transaction, it will, for a relatively modest sum, have wrapped up 30% of the US search market, giving its new Bing product a chance to thrive. Bing has picked up modest market share since its launch, but many analysts believe that after its $100 million marketing campaign is over, that share will be largely lost. ... If the transaction materializes, Yahoo!’s share could jump $4 or $5.
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Kara Swisher unwittingly writes an offensive headline:

Top executives at Microsoft–including SVP of the Online Audience Business Group Yusuf Mehdi, search head Satya Nadella and top digital exec Qi Lu, as well as others–have all flown down to Silicon Valley from their Redmond, Wash., HQ today to iron out the remaining issues, which seem to have to do with the deployment of technology.
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If all goes well, the deal could be announced within the next week, sources at both companies said. ... While [we've] gotten several different versions of terms of the latest deal, they all include Microsoft (MSFT) paying Yahoo (YHOO) several billion dollars upfront to take over its search advertising business and guarantee certain payments back to Yahoo. There is also a display advertising element to the deal, which would likely have Yahoo take the lead in selling premium advertising for the companies.
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John Oates sighs, "Again?"

Of course we have been here before - much of 2008 was spent following the companies on-off romance. ... By our reckoning, Yahoo!'s chief executive Carol Bartz is still on leave, so a deal might need to wait for her return. ... Any deal is likely to look pretty sweet to Microsoft compared to the $44.6bn that it was offering for the firm - Yahoo's market cap is now $22.6bn.
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So much for Bing then. The deal would allow Microsoft to take over Yahoo!'s search business in exchange for several billion dollars while Yahoo! would sell display ads for both firms.
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Eric Savitz thinks "convoluted" thoughts:

Provocative stuff, and keeping with some of the other rumors that have been floating around about the two companies over the last year or so.

So is it true? ... YHOO today is up 51 cents, or 3.3%, to $16.22.
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Kip Kniskern says the rumors are, "Right on schedule":

That Bing has gotten off to a good start has been well documented around the web, enjoying lots of press. ... You can’t visit a tech news site without at least a bit of Bing news, proof the rebrand is having an effect.

But it doesn’t take a rocket scientist to figure out that all the positive buzz around Bing isn’t going to do any good without a series of moves as bold or bolder than the rebrand itself. ... If (and that’s a big if) the deal takes place, it’s going to shake up not only the search wars, but also Microsoft’s own display advertising strategy, which Yahoo! may end up running if this all plays out as expected. ... The timing is right, and the pieces are in place to make it work.  Of course we’ve been led down this path before.
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Bobbie Johnson also notes the timing:

Yahoo ... is due to release its latest quarterly results next week, and may be hoping that any agreement with Microsoft could take the edge off a disappointing fiscal period.
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Such a deal would be a further hammer blow to the reputation of Yahoo co-founder Jerry Yang, who led the charge against Microsoft and sparked a war of words with rival CEO Steve Ballmer. Since the negotiations between the two collapsed late last year, however, Yahoo has brought in a new CEO, Carol Bartz – who may take a more pragmatic view of the situation given Yahoo's financial struggles.
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Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and spam. A 24 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You can follow him as @richi on Twitter or richij on FriendFeed, pretend to be Richi's friend on Facebook, or just use good old email: itblogwatch@richij.com.