Microsoft has contacted Yahoo! at a couple of occasions regarding a possible merger. The reason is quite obvious and that is to take down Google. A merger may have many obstacles ahead of it, but is far from impossible. Since the discussions surfaced Yahoo!’s stock value have been on a rollercoaster. This isn’t the first time Microsoft have made attempts to “help” Yahoo! to fight Google’s dominance, among others through stock purchases and then the very same rumors were circulating. This seems like a repeat of the last, but according to one analyst the discussion has already been terminated, but nothing is certain.
The problem is that these are two very different companies with completely different organizations and leaderships, which on the other hand have probably had a positive effects on the surging stock, things could’ve been a lot worse at Yahoo!. Yahoo! presented some rather poor results for the first quarter, which alerted analysts and made them question Yahoo!’s outlook and seriously doubt the very optimistic future Yahoo! was estimating.
A Yahoo! in a bit of despair could be a very good deal for both the search engine company and Microsoft. A merger would not be just a show of strength but just as much as sign of weakness, a proof of their inability to keep up with Google and admitting that Google has grown too strong. Most people agree that this is not a question of if, but when. Microsoft has been slipping and needs to come up with something drastic.
Together the two would still not be able to reach Google’s income from search-related ads and search total, but they would be able to measure up to Google when it comes to displayed ads (in the USA). There are a lot of things that have to work for this to go through, e.g. the American anti-trust laws, but all in all it looks quite feasible.
