Comment on Microsoft Acquiring Yahoo | Jeff Kagan Tech Analyst

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Jeff Kagan

Tech Analyst

     

We have been speculating recently that Microsoft would still be interested in Yahoo and may be thinking about another bid for the company. The Wall Street Journal says that may indeed be happening right now.

It says private equity firm Silver Lake Partners is working with investors, the Canada Pension Plan Investment Board and Microsoft to put a deal on the table to buy Yahoo.

This is just what I expected. I have been saying that it is just a matter of time till Microsoft makes another play for Yahoo. What may be new this time is Microsoft is partnering with others to accomplish it.

This is curious. Why would Microsoft want to muddy the water with multiple owners? A pure play would make so much more sense.

Sure Microsoft tried and failed once before in 2008. That is no reason to bring in others.

Remember when Ed Whitacre the CEO of SBC tried to acquire AT&T after the Telecom Act of 1996 was signed into law. Then FCC Chairman Reed Hundt said that was ‘unthinkable’. The deal was withdrawn.

What happened next? Several years later when the long distance industry was collapsing and AT&T was worth much less, a fraction of it’s former self, SBC make another attempt and this time succeeded. SBC acquired AT&T, Bellsouth and Cingular and took the AT&T name. They got AT&T at a bargain.

Sound familiar? When Microsoft made their first attempt to acquire Yahoo in 2008 Yahoo was worth much more. Today Microsoft could acquire Yahoo for pennies on the dollar. It is a bargain now.

SBC hit a home run with the acquisition of AT&T. Microsoft could hit the same kind of home run with the acquisition of Yahoo.

Let’s see what happens next.

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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com

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Jeff KAGAN| Tech Analyst w Atlanta based jeffKAGAN.com

Analyst sharing perspective on the changing industry for 25 years

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Phone 770-579-5810 Email jeff@jeffKAGAN.com Web www.jeffKAGAN.com

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