Will Microsoft buy Yahoo? Stay tuned for the battle of the titans

Microsoft is taking Yahoo back to the negotiation-table. Down the road is a possible takeover/merge worth roughly $50 billion, New York Post and Wall Street Journal reports.

It’s a huge deal if it goes through.

Together Microsoft and Yahoo would have the developers environment (with newly launched Silverlight), the operating systems and the users/customers. It would also be Microsofts move into more aggressive online marketing and advertising presence (after having lost the battle for advertising firm DoubleClick to Google last month). A merged Microsoft and Yahoo could eventually perform a major strike against Google. Let the battle of the titans begin!

On Friday many influential bloggers and reporters gave the potential deal thumbs up. “Does a deal make sense? Absolutely. Yahoo effectively could become MSN on steroids,” Adam Lashinsky writes at Fortune. At Between the Lines Larry Dignan notes that the arguments for a deal indeed are pretty good: “Yahoo’s Panama ad system is the real deal and if company officials are to be believed – it’s only going to get better. That fact indicates that Yahoo’s price tag will only increase. Why not pay $50 billion today so you don’t have to pay $70 billion later,” he writes.

Andy Beal, blogging at Marketing Pilgrim, says the deal makes sense on a number of levels: “Microsoft and Yahoo combined, might have a chance of actually competing with Google as they would hold a combined search advertising market-share of 27%. That’s still a long way from Google’s 65% share, but it’s a whole lot better than they have now.”

However merging the two companies, with their different culture and demographics, would not exactly be smooth. Skeptical voices were also raised. At GigaOM Om Malik says that a merge seems like a bad idea: “Marrying a company with Internet DNA (Yahoo) with another who can’t take a step forward without turning its neck twice (looking back at the PC) is not that easy,” he writes. And at BuzzMachine Jeff Jarvits states: “I don’t see what Microsoft bring to Yahoo or vice versa in strategic terms. Oh, there’ll be lots of chatter about synergy but I wouldn’t bet my lunch money on it.”

 

According to The New York Post Goldman Sachs is helping Microsofts Redmond-team in the negotiations. We’re excited to see what this mating dance will result in. A merge would mean a major game-change. Compared to he protein-drinks served at Google, Microsoft/Yahoo would be on steroids.

By John Furrier and Tina Magnergard Bjers

PS. At SearchEngineLand Danny Sullivan points out that if Yahoo is for sale Google may be interested. Dwell on that.