What happens to the Yahoo and Microsoft deal?

Talks between Microsoft and Yahoo continue as the market closes and the business week comes to an end. Every signal is that the two sides are close to finalizing a deal, somewhere between $33 and $37/share. But are we going to see a deal at all?

If there isn't a friendly deal, is Microsoft going officially for the hostile take over? The market supports Yahoo's claim for "more money" as the stock price rose as much as 11% May 2, 2008 and closed at $28.68.

Analysts are pretty much guessing about a deal to be wrapped up over the weekend and announced on Monday. Their estimate for a cash/stock mix is in the $35 range. Microsoft has signaled that they’ll go as high as $33 this week.

The main reason Microsoft has changed strategies seems to be the willingness of Yahoo to do a search outsourcing deal with Google in the event Microsoft walks away or goes hostile.

The threat is very real, and some experts say that regulatory approval of such a deal would not be as difficult as some have speculated.

Techcrunch: Microsoft and Yahoo Merger

Techcrunch: "Big mergers tend to fail more often than not, especially when companies are trying to combine operations as opposed to adding on new standalone capabilities. One of Microsoft’s biggest mergers was Great Plains Software, which was a success specifically because Microsoft pretty much left it alone for a couple years and let it operate independently.

Helge: Let it operate independently is not an option with Yahoo!

That is not an option with Yahoo. the merger is a collision waiting to happen. Integration is going to be rough and will slow down the merged company. Nobody believes that a combined Microsoft-Yahoo will be a nimbler competitor than either bureaucratic organization is today on its own.

Helge: MSN might suffer more than Yahoo in the beginning.

Not that any of this matters from Microsoft’s perspective. The logic of the deal is to gain scale as an advertising platform and as a Web publisher. the two go hand in hand. The more Web pages and traffic you have, the more ad inventory you have to sell. Everyone is focused on search, because that is where Google is so dominant today.

Helge: Inventory to sell.

But remember, while search ads make up about 40 percent of Internet advertising revenues, display ads still make up about a third. And that is where Yahoo is strongest. Microsoft needs to bulk up on display ad inventory before Google’s DoubleClick deal goes through. If it can fix search, that would just be a bonus.

Helge: Display ads into context!

A combined Microsoft-Yahoo will help it compete against Google in display advertising, which is still an open game..."

Yahoo Adds More Media to IM

Yahoo is one of the largest instant messaging service, with about 27.7 million users in September, up 19 percent from a year earlier, according to data from tracking firm comScore. Time Warner Inc's AOL reported about 30.2 million users.

Helge: I used to use it. Now Yahoo IM occasionally. What made me move to Google?

Yahoo Adds More Media to IM: "Internet media company Yahoo said on Tuesday it is adding media-playing features, large file transfers, new languages and other tools to its instant messaging service.

Helge: Large file transfer isn't a bad idea.

The move comes as a growing number of rivals -- from incumbents like AOL to social network sites like News Corp's MySpace -- boost their positions in the market for instant messaging services.

Helge: There are too many.

Yahoo Messenger 9.0 launched as a test version and has added features similar to ones seen on social networks or media-sharing sites, including extra room to post a picture or other image next to contact names and the ability to share video or photos within a message screen."

Helge: Have to go testing. I'll write more about Yahoo IM later.

The BFF blog about TechCrunch

The BFF: "This week at Yahoo At Techcrunch 40 this week, many commentators are expecting news from Google and Yahoo.

Last week Mashable reported Yahoo opening up (Kind of). Yahoo has an impressive API architecture and an amazing team of programmers, I hope they let rip this week and that they 'feed' all their services.

Steve Rubel has rightly complained about the lack of feeds on Yahoo's websites. To be honest, and I'm talking for myself, I really need those feeds. I will not visit a site because it does not have a feed.

If Yahoo is afraid of losing ad revenue, I'd say find a subtle way of sticking it in feeds. It works if you avoid overkill, otherwise I'll unsubscribe. Yahoo have a great new firefox plugin by the way. It you make websites, you'll probably need it.

It's called YSlow for firebug and how your pages are load performance is. It has loads of really clever tips."

Helge: I guess there are news from Yahoo this week. The destiny of Facebook is still open. It's been quiet about the Microsoft and Yahoo merger. What can we expect from Google?

Sprint to Develop Mobile Internet Portal With Google - New York Times

Sprint to Develop Mobile Internet Portal With Google - New York Times: "NEW YORK (Reuters) - Google Inc. has made its biggest move yet on the U.S. mobile Web market by signing a deal with Sprint Nextel Corp. that positions the Internet company to build services to run on Sprint's planned WiMAX high-speed wireless network.

The two companies said on Thursday that Google will provide its Internet search service for a Web portal that Sprint is developing for the new WiMAX network. The gateway to various Web services will be ready in April 2008. The deal is Google's closest alliance with a major U.S. mobile service provider.

While Google is the world's leading provider of Web search and has agreements with large mobile providers in Asia and Europe, analysts say it has lagged Yahoo Inc. in the U.S. wireless market."


Helge: They are all going for the wireless, Google, Yahoo, Apple, Microsoft.

Mak IT fast

At the Web 2.0 conference somebody asked why “Yahoo hasn't acquired Six Apart's blogging tools or Facebook to gain some faster traction in blogging and social networking.”

Bradley Horowitz from Yahoo responded, "We put Yahoo 360 out there and learned a lot from it. 360 may be doing a 180, and change and adapt to address the opportunities." He didn't offer any specifics as to what the 180 degree turn looks like.

The Yahoo co-founder David Filo added, "We are absolutely interested in blogging, and we hope five years from now to be a major player in that space. We will look at acquisitions."

Marissa Mayer of Google was advocating speed. Her key statement for the listeners at the Web 2.0 Summit was that "slow and steady doesn't win the race." Speed is a huge component and big market driver of Web 2.0, she said.

• Google's AJAX applications, Gmail and Google Maps, benefited from speed
• Digital photography and Wikipedia are examples of how instant gratification helps drive people to become expert users faster
• For Google, or any other Web site, speed means people viewing more pages in same visit and spending more time overall online…and more money.