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May 04, 2008

MicroHoo Deal Falls Through and That's the Right Outcome

  Microsoft is taking over Yahoo! 
  Originally uploaded by Gnal.

[May 7th Update: Meant to post this late Sunday night before the amrkets clsoed but that didn't happen. SO a little dated now but I was right about the stock price hitting $24 a share.]

Read late last night that the Microsoft-Yahoo deal has collapsed, primarily due to price differences (Microsoft was willing to pay $33 a share, Yahoo wanted $37) but there are lots of reasons that this fell through. Marc Andreessen's extremely insightful pre-collapse analysis explores all of the why-not reasons, which he wrote before the collapse was announced.

I didn't want this deal to go through and I'd suggested to friends when I went to the Utah Ski Trip back in late February. that this wasn't a good acquisition.

Two dinosaur tech companies without clear internet strategies means two poor players merging to become a super poor-player.

Here are some good posts on why the deal wouldn't or shouldn't happen:

I'll also be interested to see if Umair weighs in on this merger-collapse discussion.

Quickly, who are the winners and losers?

  • Winners- Google (in the same way that it "won" the FCC's wirless spectrum auction) and the us (e.g. internet users)
  • Losers- Microsoft, and less so, Yahoo

So looking ahead, Fred Wilson and others are taking guesses on where Yahoo's stock price will go on Monday. Take the poll below to participate:


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