Microsoft aggressively courting Yahoo (again)?

In what would be one of the biggest business deals to go down -- well, ever -- Microsoft is rumored to once again be in talks to buy Yahoo after being rebuffed numerous times in past years. The New York Post is citing unnamed sources in reporting that Goldman Sachs is helping Team Redmond make a play for the web's perennial "number two," and arguing that an acquisition or merger would make sense for both companies. Microsoft would get a stronger online advertising presence -- something it clearly desires, as evidenced by its battle with Google for DoubleClick -- along with as an audience whose demographic supposedly skews younger and content that it could offer with Zunes, Xboxes, and the like. Yahoo would also serve to benefit, goes the argument, by picking up some of the much-needed technical expertise and financial backing required to dethrone the big G. Still, these two rivals have done the mating dance several times before without anything substantial arising -- save for IM interoperability -- so it remains to be seen whether the landscape has shifted enough in the eyes of both firms to solidify an agreement this go-round.

[Thanks to everyone who sent this in]

[Andrew @ May 4th 2007 11:48AM]

MSoft also called me this morning. I was asleep and
then they tried Yahoo! I'm desperately trying to get
them on the phone as I type!!

[andy @ May 4th 2007 11:52AM]

bye bye free yahoo account with iphone lol

[carter @ May 4th 2007 11:55AM]

Is this a tacit acknowledgment that they don't see Vista and Zunes as significant future revenue streams?

That means they'll own Flickr. Bleh.

[Todd @ May 4th 2007 12:01PM]

Perfect definition of a “Bad fit”

The fastest way to decimate tens of millions of loyal Yahoo Mail and Flickr users? Demand they use IE 7 ( ONLY ) to get their mail and manage their photos - which would be the the first thing Microsoft does on day one.

Plus all the millions of people who would receive this notice:

"...Silverlight is not your default media player, to use this Yahoo service, you must uninstall Flash 9 and then install Silverlight 1.0....”

[adam @ May 4th 2007 1:04PM]

Todd --

Microsoft doesn't demand that you use IE for Hotmail, why do you think they would they demand that you use it for yahoo mail? The newer Live Hotmail Beta works beautifully with firefox.

[Buck Jones III @ May 4th 2007 12:08PM]

This would be great for both companies! All services would benifit from the combined power of the two. We saw this coming, because they're starting to merge messenger, etc.

[Mark @ May 4th 2007 12:13PM]

Then Google buys Apple... Gapple anyone?

[Peter ostrowski @ May 4th 2007 12:17PM]

You know, I really though hard about this the other day while I was trying to get my dam zune to work with xp, (not fun) this is what Microsoft should do. Fire most of their employees. Sell off most of there physical assets. and then just buy Apple. I mean it would cost a crap load, around 60-100 billion. But they would just be better off and no I don't have a mac right now or an ipod (sold my old one once I got a zune) but ive used both and they just are better. Every computer OS has its problems but right now OSX is just better than windows. The ipod is one of the best on the music players on the market. Once MS owned apple they could concentrate on getting the os to work on all pc hardware, get more drivers etc.. and work on getting the ipod to support more formats. They also get the Iphone.

Just do it already.

[The Aggie CEO™ @ May 4th 2007 3:56PM]

you REALLY think the Government would APPROVE a merger between Apple and M$ when they were trying to make M$ break up way back when!?!?!

[robi @ May 4th 2007 12:21PM]

Microsoft needs to forget Yahoo and just buy Google - problems solved

[Ivan @ May 4th 2007 12:52PM]

"Microsoft needs to forget Yahoo and just buy Google - problems solved"

Google isn't for sale. Yahoo! tried to buy them for $3 billion a few years ago and Google asked for $5 billion. Now that their brand is valued at $66.4 billion, I doubt they will allow themselves to be acquired any time soon.

"The fastest way to decimate tens of millions of loyal Yahoo Mail and Flickr users? Demand they use IE 7 ( ONLY ) to get their mail and manage their photos - which would be the the first thing Microsoft does on day one."

I don't think so. They don't do that with Windows Live Hotmail or any of their other live properties. Also, I use MSN AdCenter frequently (I am an SEM professional) and it works perfectly with firefox.

Frankly, Microsoft needs a big acquisition like Yahoo! in order to compete with Google. Yahoo! also may need to be acquired in order to survive in the search game. They have fallen way behind Google due mostly to their horrible management and slow corporate bureaucracy. That company could really use a big time shakeup. Also, with Microsoft's money behind them it will be harder for Google to outbid everyone for things like YouTube.

[The Aggie CEO™ @ May 4th 2007 4:03PM]

LMAO!!!

now THATS Funny.........

[Will @ May 4th 2007 12:55PM]

Or it could be MS's way of throwing a wrench in the iPhone. I really doubt MS would support the iphone, if they aquire/merge/buy Yahoo. The iPhone is cool. But without the online access to content, then it's just a really nice "dumb" phone, and wouldn't cause much of a stir.

[Geoff @ May 4th 2007 12:36PM]

Yeah, they are going to demand everyone use IE to get their email. Sorta like how it doesn't work that way at all with Windows Live mail... c'mon... think please.

[chus3r @ May 4th 2007 1:19PM]

I think this would seal the deal in my move from Yahoo to Google. Yahoo has started feeling a little bloated lately. Is Answers really any good? What about 360, true blog...hardly. Connect, headaches on the TV side. It is nice to see that they are trying to make web culture easier to digest for users. While Google might lack pretty design they bring a good steak and potato meal, while Yahoo is more like the frozen Salisbury Steak.

[Todd @ May 4th 2007 1:06PM]

"...They don't do that with Windows Live Hotmail or any of their other live properties."

A valid point Ivan, albeit a temporary one. Remember how Microsoft used to have a Mac version of Internet explorer? How about a Mac version of Windows Media Player? Office? While you are at it, download the Silverlight IDE for Mac...oh there isn't one.

I give a zero percent chance of Live.com/X supporting FireFox in the long term.

...and yes, should Microsoft buy Yahoo, they would instantly kill off all access to Yahoo via the iPhone.

[Ivan @ May 4th 2007 1:28PM]

Todd,

I don't think that Windows Media Player and IE were killed off for the Mac because Microsoft was sticking it to Mac users. They were most likely killed off because nobody was using them. The scenario is different for Flickr/Del.icio.us and all the other Yahoo! properties since they are already widely used by people who use firefox, so Microsoft wouldn't want to alienate a newly acquired customer base, whereas their attempts at Mac versions of IE and WMP were aimed at dividing an existing customer base with competing products.

They may have been dragged to the party kicking and screaming, but Microsoft now realizes that the number of users who have rejected IE is growing and they cannot be ignored anymore.

[Todd @ May 4th 2007 1:06PM]

"...They don't do that with Windows Live Hotmail or any of their other live properties."

A valid point Ivan, albeit a temporary one. Remember how Microsoft used to have a Mac version of Internet explorer? How about a Mac version of Windows Media Player? Office? While you are at it, download the Silverlight IDE for Mac...oh there isn't one.

I give a zero percent chance of Live.com/X supporting FireFox in the long term.

...and yes, should Microsoft buy Yahoo, they would instantly kill off all access to Yahoo via the iPhone.

[Karl @ May 4th 2007 1:31PM]

This would be an excellent move for both companies, but a highly polarising move for the industry.

I don't think such an aquisition would get through the antitrust regulators. Although arguing that they need to bolster their businesses in wake of the Google-Doubleclick deal is a possible defense.

And considering that Yahoo have Konfabulator and Flickr (good advertising opportunities), Microsoft would be well advised to go for it.

[BW @ May 4th 2007 2:43PM]

Look I like Yahoo, does anyone not rememebr the monoply suit against MS? I dont think its right for the big fish to be able to just eat whatever they want just because they have the stomach to do so.... If MS does aquire yahoo I will quit using it. just my 2 cent though

[JD @ May 4th 2007 3:06PM]

Man this is depressing. Microsoft websites are a pain to navigate. The joys of Windows Validation and Microsoft Passport. I can't image what they'll do to Yahoo.

If Microsoft slowly kills Yahoo, what other options are out there besides Google?

[john @ May 4th 2007 3:19PM]

I think it makes better sense to do a revenue sharing deal. Microsoft uses Yahoo advertising platform & Flikr. Yahoo uses Microsoft Live ID, Live Search and Virtual Earth. Microsoft throws in several billion dollars to sweeten the deal.

[Todd @ May 4th 2007 5:46PM]

UPDATE: Yahoo has turned down the offer. I would have loved to have seen the look on Bill Gates' face when he heard they said "No Thank You" to 50 billion. The same thing just happened to him with DoubleClick - Microsoft offered MORE than Google, but DoubleClick turned it down.

[CT A @ May 4th 2007 6:16PM]

To make this complete, Sony & Apple & Google partner up and screw everyone over. (Gaming, Mp3 Player, Software, Computer, Tv)