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Microsoft-Yahoo: Trapped in Groundhog Day

Posted by: Rob Hof on July 02, 2008

So, Microsoft hasn’t given up on Yahoo after all? So it seems from a Journal story that just hit the wires, following on a melange of related possibilities raised by Boomtown’s Kara Swisher. It seems Microsoft is talking with News Corp. and Time Warner about a deal that might give the software giant Yahoo’s search operations and send the rest to one of the partners.

Maybe it’s true, maybe it will happen, maybe it won’t. Maybe something else will happen. Maybe nothing. I don’t know. Neither does the Journal:

Some of the people familiar with these talks say they are preliminary and unlikely to result in a deal with Yahoo. Indeed, two weeks ago, Microsoft Chief Executive Steve Ballmer called Yahoo Chairman Roy Bostock to suggest they meet to discuss a new idea involving other partners, according to a person familiar with the matter. The meeting, scheduled for Monday, was subsequently canceled by Microsoft, which Yahoo took as a sign that Mr. Ballmer’s efforts to find a partner have so far failed.

Meanwhile, the Washington Post says Justice will open an antitrust investigation into the Yahoo-Google search deal. I’m still doubtful Justice can or will quash it, given the limitations of the deal, but a probe sure could slow things down so much that the two companies might decide to bag it. Of course, it might also be moot if Microsoft manages to pull together its own deal after all. Indeed, Microsoft clearly was pushing for Justice to look at the Google deal.

I’ve thought all along that Microsoft would finally find a way to a deal for Yahoo, so I wouldn’t be surprised if it happened even after all of Ballmer’s protests to the contrary. But don’t ask me to predict when and how. I can safely say I haven’t seen this movie before, so I don’t know how it will end. Or maybe this really is some twisted version of Groundhog Day.

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Reader Comments

john oneill

July 11, 2008 06:04 AM

Microsoft sure have a strange way of courting Yahoo. They want the company bar current management. They dont hide these ambitions and we are left with a situation in which Microsoft and the Yahoo board are both trying to convince the shareholders of the merits of one over the other. Surely shareholders will take price as the major focus and not allow Microsoft frighten them in to a deal. After all, despite the passing of Yahoo by Google, Yahoo is still one of the great I.T. success stories on the world stage and has a far better history of search engine market performance than Microsoft.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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