Could it be so? According to the New York Times, a new strategic alliance – at least – between Microsoft and Yahoo! is once again a possibility.
A lot has changed since Microsoft’s attempt, in 2008, to buy Yahoo! The target company is now worth less than half of the $45 billion that Redmond offered for it back then. Management ructions at Yahoo! seem to have worsened in the intervening years, particularly following the termination of CEO Carol Bartz earlier this year. But other things have stayed the same: Yahoo’s continued strategic uncertainty and the weak online advertising market, to name just two. To name a third, there remains a general sense that there really isn’t room anymore for MSN and Yahoo! and AOL in this new world we live
in. The music in this dance eventually has to stop, and surely there will only be two chairs to sit in, not three, when it does.
Microsoft must certainly have this in mind as it signs a new non-disclosure agreement and looks again at Yahoo! – and if nothing else it will want to lock its competitors out of the negotiation room. But it’s more complicated now. As The Times points out, Microsoft’s strongest imperative now is to shore up the search and ad sales arrangement with Yahoo! to maintain this toehold in its search battle with Google. Therefore, the company is unlikely to make a play for full acquisition of Yahoo! again, perhaps preferring instead to
participate in a consortium bid to buy Yahoo’s business assets. Microsoft
has wider issues, issues which are beyond the help of a Yahoo! alliance, that warrant its resources nowadays.
And what does Yahoo! want? Strategic clarity; a firm idea of what the company will look like in a year’s time. Right now, that’s so unclear that they are operating with an interim CEO and talking to all different kinds of possible investors, each with different agendas. That’s not good for any of the company’s stakeholders – not for partners, not for
employees and particularly not for shareholders. And spare a thought for those
shareholders, as they yearn for 2008 and what might have been.
