Both Microsoft and Google have spent a lot of time recently courting Yahoo in attempts to make a purchase.
The truth of the matter is that both companies are handling well enough on their own and have little to gain from acquiring Yahoo.
So if there is little gain in the purchase, why are they fighting so hard over it? It is a classic case of “I don’t want it, but I don’t want you to have it either”.
While both companies stand tall on their own, neither want their rival company to get a hold of Yahoo either.
Now it seems that Microsoft is likely to have won the fight and Microsoft has begun taking a closer look into Yahoo Inc.’s financial information in order to help it consider financing an appropriate bid.
In order to get a closer look, Microsoft has signed an non-disclosure agreement. They are not the only companies looking into such bids for stake in Yahoo, with private-equity firms such as TPG Capital and Silver Lake, who both also signed NDAs.
It seems likely that Microsoft may not be interested in purchasing the company outright, instead wishing to help finance the investment in conjunction with investing partners.
This would allow them to not take on the full brunt of the cost for something they really don’t want to buy, and would also give them enough control to safeguard its Web-Search partnership with Yahoo.
A the moment both Microsoft and Yahoo declined to comment on the NDA situation, but it seems that the main reason for the NDA was in order for Yahoo to continue with management presentations and to give confidential information access to those who might be interested in a bid.
Yahoo embarked on a strategic review of its options in September after firing its CEO Carol Bartz, as the company has continued to struggle with declining sales.
One of the moves established by Carol Bartz during her time as CEO was to forge a 10-year agreement to provide search technology to Yahoo through Microsoft. Protecting this deal is Microsoft’s primary interest in making a bid for purchase.
What is interesting is that early on Google seemed just as interested in making a bid, mainly just to undermine Microsoft’s efforts to buy the former web portal.
For now it seems uncertain if Yahoo will become Microsoft property or if the company will just own a small piece through a major investing deal.
No matter what happens, what is evident is that Yahoo will never be the same. In the world of technology things change very quickly. Yahoo was once the king of search and yet today it doesn’t even handle its own search technology.
Years ago MySpace was king of social networking and now it is largely a joke. Time can certainly be cruel to startup companies, and so it really isn’t surprising.
What you have to wonder is when and if such a fate will ever befall larger companies like Microsoft. Will there be a future where Microsoft isn’t a relevant force to reckon with? As long as Microsoft its Xbox consoles, Office software, and its PC-OS line it seems unlikely, but then again back in the late 90s who would of thought that Yahoo would fall?
What do you think of the buyout deals with Yahoo? Should Microsoft buy it outright or just make an arrangement to back a bunch of investors?
Do you think that Google will still consider making a late bid? Considering they’ve yet to sign an NDA I would imagine they have lost interest, but I suppose you never know. Have a strong opinion about the potential purchase of Yahoo? Share your thoughts below!