Why is Microsoft so desperate to acquire Yahoo ?

Unable to strike a deal on its own, Microsoft Corp. reportedly is hoping to snap up Yahoo’s online search operations with the help of News Corp. and Time Warner Inc.

  • Microsoft trying to recruit partners to put together a joint bid that would slice up Yahoo
  • Latest twist in Microsoft’s convoluted courtship is causing Yahoo’s shares to rise
  • Unconfirmed report published in The Wall Street Journal
  • Microsoft’s talks with possible partners unlikely to culminate in a deal

Yet again we see Microsoft chasing Yahoo ? Is it now a war of egos ?


  • Octavio Ballesta

    Hi Ali,
    Microsoft is loosing its competitive edge in the technological arena when Google is achieving and consolidating an insurmountable advantage in providing innovative tools, stellar services and state-of-the-art innovation for the Internet market.
    Yahoo, has made the correct decision in declining Microsoft’s offer to merge. Microsoft and Yahoo are incompatible culturally, financially and their software products are not complementary in a way that could signify a viable menace for the competitive leadership of Google.
    If Microsoft would have intention in filling the gap to become in true champion in enterprise innovation and gain consumer’s favor in the Internet market should begin recognizing that an excellent financial muscle is not enough by itself in pursuing a strategy of true competitiveness based in a culture driven by innovation and a creative mindset supported by Senior Management as if happens in Google.
    Microsoft’s intention of merging with Yahoo to gain competitiveness in the Internet market does not ensure for the long term that a powerful financial positioning would be enough by itself to gain the innovation race against a stellar competitor like Google that has developed the best enterprise climate, the most fine-tuned culture in nurturing innovation and the best compensation package ever imagined to gain access to the privileged perspective of being the company that is defining the business rules and is creating new products for the never-ending evolving and volatile market of Internet software
    The perspective of Yahoo is worrisome when the possibility of merging with Microsoft would signify the end of the look-and-feel of Yahoo applications that possibly would be fused in the architecture of Microsoft’s applications. From the perspective of Yahoo’s employees having a culture radically distinct that Microsoft, such merger would signify a demoralizing event that would affect employee’s engagement for the long term, and would be detrimental for the competitive positioning of Microsoft in the long term, against a giant like Google that would continue excelling in the best practices to pursue true innovation in an ideal workplace having the best talent available.
    Complementary to this theme, I include the link to a question I have posted in Linkedin sometime ago:
    1. Developing a corporate culture that fosters innovation, how easy is that?
    2. Which of these companies: Apple, IBM, Google or Microsoft will be a dominant factor to create the next wave of technological innovation?
    I hope this helps you.

  • Thomas Labus

    The need to stay viable in search until the next generation of search arrives is their main motivation. Is it real strategy or a move of desperation? Some of the former, more of the latter in my opinion.
    One of the interesting side lights to YHOO’s saturday rejection of the Icahn/MSFT offer was that the YHOO board did agree to sell the entire co at the old 33ps offer.
    MSFT says that they will not entertain any offers of the entire co until there is a new Board. So, I would say the proxy vote of Aug 1 will be prceeded by some serious negotiations with the level of hostilty going higher.

  • Brunella Longo

    Because of the audience.
    While thousands of his smart search engineers are working on the assumption that “what you get [in SERP] is what you need”, Microsoft has everything but trusting eyeballs. That still counts for the advertising market. No matter how interactive and immersed we are in Microsoft great solutions for individual productivity or for enterprise applications, included the acquired ones like Fast, no matter the Web 2.0 waiting for the Web 3.0 revolution, the currency of the media world is neither content repositories nor media properties. It’s still eyeballs.

  • Sam Srinivasan

    Because they need to make a name for themselves in the online world and this has been difficult in their own right….Google is miles ahead and capturing a lot of the online media spend….

  • Ray .Casey

    desperate? Hardly describes their behavior, rather that sounds more like rumor mongering or FUD spreading. BTW – what’s smarter than getting paid to search? Duh, Google is like “S#$@! why didn’t WE think of that”
    I know this sounds a bit off, but MSFT should get more AGGRESSIVE in acquisitions and responding with counter media, as they have been way to sheepish for too long because of the FTC, whiners, pundits, and FUD speakers against them. It is time for MSFT to get “Harry S. Truman like” and start nuking some bastards that are trash talking a great company, a great collection of products and the good things done for people in need (ha like try to get an Iphone and airbook serviced in Honduras.. yeah right! Like apple, Yahoo and others CARE one hoot about anything but brand, luxury and self interest/profit!)

  • Noreen Poli

    Because Microsoft believes in and operates under the “finite” pie model. And in that model Yahoo has more of the pie. Old habits die hard when you goal is to own the world.

  • Ray Miller

    IT sure beats being innovative on your own…………..

  • Israel Ekpo

    I think the answer to this is very simple. They were unable to do well in the online search market on their own so they tried to acquire Yahoo to do the job for them. However that did not work out. They tried to acquire Yahoo independently but that failed too. Now, they need help from other people to do the job for them as well. I think this will fail too.
    I think maybe Microsoft should ask for Yahoo’s help in acquiring Google and that will settle everything for them.

  • Arlen McCorkle

    If you understand the concept of “Affiliate Marketing” or “Affiliate Partnering or Venturing”, that is the reason Microsoft is chasing after Yahoo. You look at other sites like YouTube and Google and they weren’t bought for the amount of money because they had some special technology but the fact that they are tied to a different system than Microsoft is.
    Honestly, Microsoft’s future is not looking so good at this point as well. That’s another reason they are looking to get hold of a company like yahoo.
    * http://www.bww.com
    * http://www.ThisBizNow.com
    * http://www.QuixtarFacts.com

  • Lucas Finco

    Two reasons:
    1. Internet Search. Another bright idea that Microsoft totally missed and is behind in.
    2. SAAS. In 10 years, no one will be itching to install Office 2018 because everybody will be using Google Documents. Software as a service is the future. Yet ANOTHER bright idea that Microsoft totally missed and is also behind in. If SAAS takes off, you won’t need a bloated OS, either. Come to think of it, you won’t need Microsoft at all…

  • Patrick Abotsi

    One word: Google

  • Kevin Harville

    Megalomania. Plain and simple. Feathers on the caps of executives. Fear of not being number one.

  • Angelos Karageorgiou

    A few points to ponder
    1) Innovation: Yahoo has some, google has more, microsoft needs tons to keep abreast
    2) Meta Data gathered from searches, i.e. market research and shaping that can be done after post processing searching and browsing habits.
    3) Fiscal liquidity, money must be spent or lost. I am not an expert here somebody help me out
    4) The usual tactics of assimilating a potential threat or market share carver.
    5) A defense against the Google flood. I do not think that Google’s business practices will last , but while they do they are formiddable.

  • James Wallace

    Money! To try and regain all the ground the have lost since the Internet boom.

  • Nicky's World Productions


  • Mathieu Gorbinet

    Have you heard of the ‘361 patent ?
    There is a widely spread theory that Microsoft is after Yahoo to get its hands the US patent number 6,269,361 that Yahoo got when purchasing Overture.
    It’s a bid for placement patent for ads (think AdWords)
    * http://www.techuser.net/microsoft-yahoo.html

  • Shreyans Jain

    To destroy the “Googlophobia” but still I think yahoo and microsoft are very far than increasing google popularity.

  • Brian Ng

    Basically, the online advertising space has been dominated by Google after they purchased another Ad Click company, so Microsoft needed perhaps a stronger online ad banner clients and engine to add to their MSN AdCenter.

  • Olga Lednichenko

    [1] Most of us – do this: SEARCH -> SCAN -> CLICK
    [2] Google takes the cake on Search
    [3] Search is where it all begins
    Olga Lednichenko

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