MS Buying Yahoo? Bad Idea, Even At a Discount

jfruhlinger writes "Nearly four years ago, Microsoft tried to buy Yahoo, but eventually withdrew the offer in the face of resistance from Yahoo's leadership. This week rumors resurfaced that Microsoft was once again bidding on the struggling Internet pioneer, this time for significantly less money. But even at a discount, it might be a pretty bad idea for Microsoft to get involved in the unfocused, money-losing Yahoo."

Comments

Leave it for Alibaba

[mark_elf]

Jack Ma wants to regain control of Alibaba http://money.cnn.com/2011/10/01/technology/alibaba_yahoo/index.htm/, makes more sense for them than for Microsoft. I wonder if the MS interest is just to drive the price up for some reason.

I seriously doubt it.

[blackicye]

It was a bad idea then, it's no better of an idea now (and some would argue worse.)

Why not wait another year or two and buy Yahoo for an even bigger discount, something closer to free.

Are we talking about the same Microsoft?

[Required Snark]

"a pretty bad idea for Microsoft to get involved in the unfocused, money-losing Yahoo."

Am I wrong, or is the phrase "unfocused, money-losing" pretty much the definition of the stuff that Microsoft is rolling out these days? SilverLight, Bing, Zune, .NET languages, ...

Yahoo is just a website

[satuon]

I think of google as a search engine that happens to have a web page which you can use if you don't have a search bar in your browser. But when I go to yahoo's page, it looks more like a news site than a search portal. To me it looks like an ordinary website, not much different from cnn.com.

Re:Yahoo is just a website

[msobkow]

Very true. I have an email account at Yahoo (had it for years), but other than that I've never knowingly used any of their services since Google beat them at the search game. They're a good news aggregator, but if they disappeared there would still be hundreds of sites filling that niche. In fact, the only reason I end up reading their news is that I get taken to the page when I log out of my email account.

But I wouldn't say they're "unfocused" as the summary says, and it's been made clear that the summary is completely wrong about them losing money. Like most web-based companies, they're constantly on the lookout for "the next big thing." Their big problem is they've never really found "the next big thing", though they've developed and deployed a lot of "me too" services.

Despite that, they're a far more recognizable brand than "Bing", and unlike Bing, their search results seem to be on-topic (just checked a couple queries.) Apparently Yahoo still has a few tricks in their search engine that they could teach Microsoft.

Money-losing!?!

[Dahamma]

I know Yahoo isn't particularly trendy right now, but their 2010 EPS was 0.88 and they have made a profit so far every quarter on 2011.

Calling them "money-losing" in a slashdot post isn't only completely incorrect and horrible journalism (thanks, Timothy), but lesser publications and individuals have been sued for libel for this sort of thing when it affects the stock price...

Re:Money-losing!?!

[bloodhawk]

but lesser publications and individuals have been sued for libel for this sort of thing when it affects the stock price...

umm lesser publications? what could possibly pass as a lesser publication when it comes to financial information than /.? seriously if anything EVER said on here was used for stock decisions then the moron making said decisions was going to lose his money from the next guy that tried to sell him a bridge anyway.

Better idea

[Anonymous Coward]

Earth to Microsoft: Yahoo! is not worth $44 billion.
You could buy General Motors lock, stock, and barrel for $14 billion, name all the cars "Google Sucks,"
and get more bang for the buck. Heck, you'd have enough left over to buy Ford for around $16 billion,
and you could name all those cars "Google Sucks More" and still have $14 billion left over for a big party

-stolen from a post here a long while ago the first time this came around. still true-

Re:Who, exactly, is losing money?

[Hadlock]

They're a revenue stream for some hedge fund or conglomerate, sure. You can bank on them having level revenue for the next 2-5 years, but there's no growth left there. R&D got the axe years ago, and they haven't developed a noteworthy product or championed a cause that anyone can remember since free email (yahoo mail) and yahoo maps... which are third rate backwaters these days. All that is left is a bunch of degree mill MBAs looking to pump up the company to sell it to investors... same as AOL. The trade name doesn't hold the glamour or instill the brand pride it did in the first half of the 00's.
 
Sure, profits are UP, but at what cost? Employee morale must be at an all time low, they are hemorrhaging long time employees, the board of directors is directionless and they have had no CEO with a sense of direction since they kicked out Jerry Yang. The soul of the company is dead and the product they sell is a commodity; no one has faith that you could reasonably improve the shareholder value by 20% in five years.
 
They could bring back Jerry Yang, but that would involve scrubbing the entire board of directors to get him back; not likely. Yahoo is circling the drain, investors are looking for a way to cash out without alarming anyone, but nobody is buying, which only drives their stock price lower. So long, Yahoo, and thanks for all the free email!