Yahoo co-founder and CEO Jerry Yang thinks so. He believes that a Microsoft purchase of Yahoo would be a wise choice for the operating system giant. Jerry Yang spoke at the prestigious Web 2.0 event in San Francisco and openly expressed his opinions to an interviewer. “To this day, I believe the best thing for Microsoft to do is to buy Yahoo,” he said. While there are no talks happening at the moment, he continued by stating that the board of directors and himself would “remain open to everything.”
Now let’s take this idea one step farther. What does this potentially mean?
Microsoft’s last talks fell apart under unknown circumstances, but the potential deal was anywhere from $33-$37 a share. If Microsoft places their bid, it would most likely be under the reduced share prices of today, hovering around the $13 mark. Shareholders might see a bump in Yahoo’s stock price, which would be a welcome outcome. The search engine would then redefine itself as a Microsoft product, perhaps taking more advantage of the Microsoft company stability while Microsoft capitalizes on the advertising reach that Yahoo enjoys.
If Yahoo stays unchanged, business would need to be further streamlined and more rounds of layoffs and reorganizations would take place. If the stock continues to fall and revenues do not pick up, Yahoo might be forced to think of other options such as selling search outright to Microsoft. This would be an act of desperation since the key to their advertising success has been a combined force of search and display channels. The display channels alone might not be enough to keep the Yahoo brand a significant force in the market. Either way, this is certainly a story that we should keep an eye on in the coming months as conditions weather on.
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