Microsoft and Yahoo: A marriage made in Internet heaven

This is a marriage that's meant to be, says CNET Blog Network contributor Steve Tobak. It will happen. But will it work?

Microsoft's unexpected marriage proposal to Yahoo has been the talk of the high-tech town. Who would have thought a possible geek betrothal could rival the coverage of Angelina and Brad?

And even though Microsoft has yet to get an answer from its intended partner, I've got a pretty good idea how this deal's going to go down. Here's my take on the outcome with respect to all involved parties:

Microsoft

It sucks being No. 3 in every Internet business metric--search, advertising, and properties. Microsoft is desperate to gain market share on Google. Also, it would probably be a good idea to turn a profit in its Internet business one of these days. That's the only reason Steve Ballmer's willing to take on the Yahoo mess.

Don't forget, the cost to the software behemoth means nothing. Win, lose or draw, Microsoft has nothing to lose and everything to gain.

Yahoo
As I said in previous posts , the board messed up in appointing Yang as CEO and now faces a not-so-difficult choice: reject Microsoft's offer and then what? Yang isn't capable of turning the company around, so what's the board going to do? Dump the co-founder and bring in an outsider with shareholders and employees running out of patience?

Not very appetizing.

And there are no other suitors desperate enough to take on the challenge and rich enough to afford it. Microsoft has made Yahoo's board an offer it simply can't refuse. And that's exactly what Ballmer had in mind.

As for Yahoo's employees, who knows? I hate to be brutally honest, but in this equation, nobody really cares; at least not the boards and investors of either company.

Customers
With both Yahoo and Microsoft floundering and Google looking like it's going to run off with the whole enchilada, I have to say the merger's good for end users, advertisers and everybody else in the Internet food chain. It's not like either Yahoo or Microsoft has any other real options.

Here's another way to look at it. What would telecom service and rates be like with Verizon and no AT&T? How about the oil business with Chevron and no Exxon Mobil? Well, without this merger, you may be reading this blog on the Googlenet, someday. And that can't be a good thing.

The feds
Who are we kidding? Scrutiny from regulators? There are no antitrust implications of this merger, period.

At the end of the day, I say Microsoft and Yahoo will have a lovely wedding and an enthusiastic send-off from Wall Street. And then, as with all marriages, the challenges will really begin.

 

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