Wall Street places a $50 billion dollar value on Yahoo!. As of the day I write this, Microsoft only has $26 billion dollars in cash sitting on the sideline. Further, they have a Market Cap of $291 billion dollars compared to Yahoo!'s $45 Billion. An acquisition is not unreasonable.
Shoemoney has reported on the Top 10 Reasons why Microsoft would purchase Yahoo:
- For the Search Algorithm: honestly, is the live.com search algorithm really inferior to Yahoo!'s? I think it stacks up pretty well against both Yahoo and Google and the only problem is adoption.
- Yahoo Search Marketing
- Yahoo Publisher Network
- The People: Presumably everyone except Executive Management?
- Video: Ad Volume ++
- Community Properties
- Business Directories
- Yahoo just cleaned house.
I actually see this as a much bigger thing than just purchasing an Ad Network. It's the type of ad network they are purchasing, and with Microsoft's portfolio of media infrastructure, this could be a eutopic deal for the seemingly evil empire.
I've blogged a ton about online media. About Yahoo! inking deals with Comcast, Viacom, and CBS to manage their digital advertising platforms. As Google is seen as the new evil empire, media companies have rallied against the giant.
Can you imagine what would happen if Microsoft actually did acquire Yahoo!. I keep blogging about the network effect, and how the amalgamation of digital media will win the war, how Joost is creating the new corporate high quality version of YouTube, and how Microsoft Silverlight is Microsoft’s platform entry into the digital media content distribution market.
Can you imagine if Microsoft acquired Yahoo! and their ad platform (ie., Yahoo!’s customer base: CBS, Viacom, Comcast …), and could present these customers with a monetization platform (Yahoo!), and a content distribution platform (Microsoft), that could reach more than just the public internet, but the private xBox Live network (which at any time of day has better ratings than the Super Bowl), and any other private delivery networks that Microsoft and it’s video customers wanted to setup. Furthermore, using .Net integration they can easily extend the application to include customized functionality.
In the ninety’s, Microsoft invested heavily in trying to reach customers with satellite TV. Gates bet a ton and invested heavily with several big American networks. They knew they could revolutionize video advertising by presenting custom video ads. This may be their final foray into that market.
While, I doubt Yahoo! would sell out to Microsoft, I have a feeling Microsoft will do everything in their power to try to buy Yahoo!, but that everything at this point is still just a rumor.
Microsoft TV anyone? I like my Joost!