Microsoft vs. Yahoo: Winner Is Google

Posted by on May 4, 2008 in Business | No Comments

There is a blizzard of stories this weekend about Microsoft dropping it bid of $31/share to acquire Yahoo. Rumors continue to circulate that either Time Warner or News Corp. might somehow hop into the mix. Others that Microsoft had raised it bid to $33/share, putting Yahoo’s value at $47.5 billion, before it was rebuffed by the Board. That is a premium price to say the least, since after the announcement Yahoo shares rose .82 cents to only $28.59. In fact that is a 70 percent premium compared to its original offer. There are even rumors floating around that Microsoft CEO Steve Ballmer needs to go.

For me this is all just a bunch of noise. The clear winner here is Google. Yahoo may still look to forge an ad agreement with Google. Microsoft’s core product, Vista, isn’t doing so well and their other money makers are not fairing much better. Google Docs is going after Microsoft’s profitable business suite. xBox 360s are being outsold by PS3s (don’t even mention the “ring of death” or HD-DVD issues). The Zune can’t compete with the iPod and Microsoft’s online entertainment properties are close to non-existent. Plus the potential for a Google phone and browser are just two other areas where yhey could quickly erode Microsoft’s market share.

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