Both are Serious but Microsoft is not Going to Buy Yahoo

Microsoft is not going to buy Yahoo but reports indicating that the two giants are in talks of a possible buyout is not an act to generate buzz among themselves; but a legitimate win it all vision for both of them. Microsoft is behind Google and their barrage of online services from MSN to Live have not closed the gap between these two companies; buying an established company like Yahoo should be no brainer as it could instantly keep them within striking distance of Google.

The buyout is not going to happen

No matter how tempting the deal looks, Microsoft is not spending 50 to 80 billion dollars to acquire Yahoo. Opening pockets for such a deal is not the style of the Redmond company as seen in their strategy in XBox, Zune, and their current portal. They never went as far as buying Sony nor Apple as they figured out a small amount and a few years wait could already bring them to profitability and at a closer level with their competitors.

Maybe the threat of Google is so strong and maybe Microsoft feels they have waited long enough for their MSN portal to rise; as such is their discussion with Yahoo. I understand the need to remain competitive and opening talks with Yahoo is a necessity and probably one of the best things Microsoft could do at the moment; but still, Yahoo is not a quick win solution given the huge amount they have to pay to close the deal.

They don't jive

Sure enough Microsoft is behind Google in search engine, so is Yahoo. Both of them have email, IM, portal, news and a lot of overlapped services that would start a tug of war on who should migrate to the other between them. Marrying Microsoft and Yahoo is an extremely difficult task that could provide enough tension to place both companies further behind in the race. The time required to make them efficiently co-exist with each other could be so long that both could end up completely losing the battle against Google.

What's next

If Microsoft and Yahoo decide to close a deal no matter what; I would suggest that they consider persuading the legendary Jack Welch to come out of retirement and lead this buyout. I am not suggesting that Steve Ballmer is not capable of handling this deal; but I believe the unmatched experience, accomplishments and mergers and acquisition skills of GE's legendary CEO Jack Welch could greatly ease the pain between these two companies.

Microsoft could instead spend 50 billion dollars pirating and hiring the very best people to make their online services as competitive as Google.

Conclusion

A complete buyout is not likely going to happen. The best deal for both companies is to sell a portion of Yahoo to Microsoft and both of them pool their resources together working on a service that could help them grab the online dominance away from Google once and for all.

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