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Microsoft To Buy Yahoo!?

written by John Chow on May 4, 2007

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I got up this morning to the news that Microsoft is looking at the possibility of buying Yahoo! in a deal worth an estimated $50 billion. It’s no secret that both Microsoft and Yahoo! has been feeling the power of the Google machine. Google beat out MS to supply ads for AOL in 2005 and recently won the bidding war against MS for Double Click.

A buyout of Yahoo! by Microsoft at this time actually makes some sense. Yahoo! has been performing poorly, it’s management has been shaken up and the share price has been under performing. Microsoft needs to step its game if it wants to compete against Google on the search engine front. Their new Live search is a joke (do a search for John Chow and you’ll see what I mean). With Google developing Internet-based software that directly competes with Microsoft Office, Microsoft really doesn’t have much of a choice but to go on the offensive.

Even if the deal was to go ahead, the combined MS Yahoo! search volume would still not equal Google’s, but it would go a long ways to closing the mile wide gap the currently exist. News of the take over has boosted Yahoo! stock 18% in today’s trading.

How do you feel about a potential MS Yahoo! marriage? A good idea or more a marriage of conveniences?

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Court May 4, 2007 at 1:10 pm

I think it’s a good idea, but I just don’t see them catching up with Google’s search technology. I’ve been amazed that Microsoft search hasn’t been able to get any better, it’s still terrible. It seems like they would have at least improved somewhat. By the way I used you (John) as an example to prove how terrible their search is:

Deaf Musician May 4, 2007 at 2:38 pm

Nobody is buying anything… go back to sleep. :mad:

Kenny May 4, 2007 at 3:28 pm

Exactly, the two can become one all they want but the fact of the matter is Google’s search relevancy is unrivaled.

Microsoft is better off spending a few billion in hiring some people that can help them develop search results that can rival Google’s.

Guillermo May 4, 2007 at 9:59 pm

You have to remember that Google’s search engine is their main focus, meanwhile MS don’t focus their entire efforts into just that business category. And let me clue you in that some think that the whole thing is actually just a PR campaign. :wink:

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

rahul May 4, 2007 at 1:11 pm

that marriage will short search engine majors ,bad as big Microsoft-cash rich eat up such rival to fight against rival like google :evil:

Guillermo May 5, 2007 at 9:37 am

How would you fight against Google’s search engine dominance? :?:

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Amanda May 4, 2007 at 1:12 pm

I hope they do it buy it. Anything to eventually take down google! GRR

Guillermo May 4, 2007 at 10:05 pm
Voluntary Death May 5, 2007 at 12:00 am

nah.. with Google worthing 130Billion dollars… hmm that would be decades or at least a century IF microsoft or yahoo will do it right.

JasonJ May 6, 2007 at 2:23 am

Come on, Google itself is proof you can go from 0 to $130,000,000,000 is less than ten years. That’s the Google paradigm.

SEO blog May 4, 2007 at 1:17 pm

I’ve said it a few other places but I really hope this ends up coming through. For one, I love Yahoo and MSN’s rankings and it would be nice if the two could take some of the market share from Google.

Plus, the more competition, the better off for use as marketers. Whether it’s higher payouts from Adsense/YPN or just more diverse sources of traffic, we would all benefit IMO.

msdanielle May 4, 2007 at 3:17 pm

google needs competition plain and simple. if yahoo and msn merge (microhoo?) they may move an inch closer but it’s still one inch out of one mile. mrgarylee has a good little thread going, in which i also pointed out that they’re so far behind google that the only way they could catch up is if google licensed out their algorithms, which won’t happen…

Guillermo May 5, 2007 at 9:39 am

I love the “Microhoo” name! :mrgreen:

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Everyday Weekender May 6, 2007 at 12:02 pm

great point.. I think competition is healthy.. it always benefits the consumer to have competition.

Without competition, you end up with one big, fat, lazy company that has no reason to try harder.

msdanielle May 6, 2007 at 2:09 pm

that’s actually a pretty good way to create a nice visual for what’s going on

Marc May 4, 2007 at 4:44 pm

You might like it as a webmaster, but try them as a user someday… They’re both terrible…

Guillermo May 5, 2007 at 9:40 am

Why do you think they are terrible? :?:

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Marc May 6, 2007 at 9:46 am

They give poor results for most queries.

Voluntary Death May 5, 2007 at 12:01 am

good point. with the competition, both company will be forced to make their system better. and in the end, it is us users getting the benefit out from these Search Engine War.

dancer May 4, 2007 at 1:31 pm

I think it’s good for Yahoo. They’ve been suffering brain drain and are dying a slow death. They’ve consistently managed to go from number 1 to nothing. They killed Overture and their new ad system they spent years building is still not as good as Google. It’s kind of sad to see the pioneer of directory/search flounder like this but I don’t see them winning this game on their own in their current state. Their acqusition of Right Media is interesting but almost feels desparate.

Not convinced it’s as good for Microsoft but they truly decide to allocate mindshare and effort in this space it’s a good way to buy instant market share.

Guillermo May 5, 2007 at 9:41 am

Excellent point.

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Linux operating system May 4, 2007 at 1:43 pm

We should also consider that Google with is entering in MS business, now MS would like a revenge.

Guillermo May 5, 2007 at 9:44 am

That’s very true. Google is trying to step into a market dominated by MS for a long time and although they are FAR from ever competing against MS’s Office (especially the 2007 version), they still are trying to spread to other markets. MS is not as worry when it comes to search engine development, but they still are trying to compete.

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

JasonJ May 6, 2007 at 2:28 am

Yeah, but Google is only doing that (Docs&Spreadsheets) to drive more advertising content, whereas Microsoft is still trying to sell software licenses. The more traffic Google can drive to their site, the more ad revenue.

Actually I think Docs is more an experiment than a strategic maneuver. That’s what makes Google so unpredictable — when are they doing something strategically and when are they just doing it for shits and giggles.

-Jason, from Chief Prognosticator

Dan and Jennifer May 4, 2007 at 1:47 pm

Looks like a good deal for both Yahoo and Microsoft, but definitely a pre-arranged marriage of convenience. :-)

That’ll significantly increase the competition with Google, and should be good for all of us as consumers and providers in whatever capacity.

Have an awesome day!
Dan & Jennifer

Guillermo May 5, 2007 at 9:49 am
Mubin May 4, 2007 at 1:51 pm

Whats really weird is that shoemoney actually predicted this happening in 2007.

SEO blog May 4, 2007 at 2:19 pm

yeah, he’s pretty much on fire in terms of his predictions so far. This could become what the 3rd or 4th thing to come true? Not too shabby.

Guillermo May 5, 2007 at 9:52 am

Where can I find other predictions? I definitely need to know this things in advance, so I can get some stock before the merge. :evil:

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Joseph.C May 4, 2007 at 2:01 pm

I think if the deal goes through it will be a big boost for Microsoft in the search engine and text-link advertising market. Microsoft just has focusing on competing with Google and concentrate on the needs of the online user and how they can make the experience better.

msdanielle May 4, 2007 at 3:23 pm

agreed. the things ms and yahoo are missing are 1. the user experience with search, and 2. search relevance in their results. if they pared down and did JUST search like google, they’d stand a chance to increase quality. google’s strength is due to the fact that they do one thing, and they it right. someone also mentioned in mrgarylee’s post comments that ms and yahoo are portals, which distracts from the main money-making potential – search. if google turned into a portal, they’d go to crap. i can’t even stand the “personalized” home page. i go to google for search. that’s it.

Guillermo May 5, 2007 at 9:56 am

I guess that’s the main point some people miss. Google = search, MS = many, many products and services. MS is not trying to dominate the market, but to keep in the fight.

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Wolf Stone May 4, 2007 at 2:02 pm

I’d rather see Yahoo team up with Amazon and use their sellers/buyers as a means of increasing their branding or see yahoo and some social networking site merge so yahoo can use the core audience of social networking sites to inculcate their brand.

Guillermo May 5, 2007 at 9:57 am

That’s very interesting. What social network do you think would go well with Yahoo?

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

How to start a clothing line from scratch May 4, 2007 at 2:05 pm

I’m still looking at that buyout amount…$50 billion :shock:

SEO blog May 4, 2007 at 2:26 pm

I think John will be earning that much off this blog by the end of the year :lol: :wink:

Mubin May 4, 2007 at 3:29 pm

Expect a buyout from Google before that happens.

Guillermo May 5, 2007 at 10:00 am
Marc May 4, 2007 at 4:46 pm

That would come close to draining Microsoft’s cash reserves… So they can readily afford, but it would put them in a position they’ve not been in in a long time.

Guillermo May 5, 2007 at 10:03 am

Believe me MS is not running out of money any time soon. :wink:

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

SEO Expert Blog May 4, 2007 at 2:15 pm

I don’t think that Yahoo and MS will be a good couple but there is a need for some real competition against Google’s search market dominance.

Ronaldo Camacho May 4, 2007 at 2:18 pm

The Live Search is a joke, no question. That search for John shows me in the 2nd place and the home in 3rd… :lol:

SEO Expert Blog May 4, 2007 at 2:27 pm

If you do this search from Germany is the first result.

ian May 4, 2007 at 9:31 pm is also number one when doing the search from Australia.

Search Engine Marketing May 4, 2007 at 2:34 pm

wow … i’m shocked with the msn results … humm … wonder how my name does in msn …

Darin Carter


Josh Buckley May 4, 2007 at 2:47 pm

Looks like windows will come filled with yahoo software now.

Chicago Web Design May 4, 2007 at 2:55 pm

It’s just a rumor. TechCrunch posted an update as a response to the Wall Street Journals post.

James May 4, 2007 at 2:58 pm

John, don’t you think that this search for you on Yahoo (link will somewhat just like the search for you on Live Search if Microsoft gets their hands on it? No way they won’t mess it.

Blogging For Money May 4, 2007 at 3:45 pm

where are my comments?

Everyday Weekender May 6, 2007 at 12:05 pm

I don’t know.. where did you leave them :lol:

Market Matador May 4, 2007 at 3:52 pm

I’ve been hearing rumors that the Wall Street Journal said the deal wouldn’t happen and wouldn’t go through. I don’t know if there is any truth to either side, but Yahoo! is horrible. No reason for Microsoft to buy a second class stock, unless they have BIG plans for it.

Will see,

-Sam from

Marc May 4, 2007 at 4:54 pm

It’s not worth it if it was a strike towards Google. Even if you could get over the massive hurdle of merging two search technologies in a short period of time, there’s still the underlying issue that neither one of them is good at any aspect of search when compared to Google.

Merging two bad search engines does not make a good search engine.

max May 4, 2007 at 6:38 pm

Yeah, your search on Live search IS bs… haha…well… that’s why we all use google right? :evil:

KidBlogger May 4, 2007 at 6:54 pm

I hope Microsoft turns yahoo into something ridiculous too! :twisted:

Phishie Diaz May 4, 2007 at 7:37 pm

Live Search is awesome! You’re listed on the second page John! :razz: :razz: :razz:

FameFire May 4, 2007 at 7:57 pm

I am using Google. When I started to use net 6 years ago, the only name I knew for search was Yahoo! But now not a single day pass without Google. If Yahoo and MSN merge, it is good that their combined work with make an another good search engine with Google. But its not so easy.

Guillermo May 5, 2007 at 1:12 pm

It is definitely not easy at all.

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Best CD Rates May 4, 2007 at 10:17 pm

yeah, does anyone bother to figure out how livesearch and yahoo search works?

Ankur May 4, 2007 at 11:06 pm
Nathan Hutchinson May 4, 2007 at 11:18 pm

I’m not really too worried if they join because nearly everyone I know uses Google. If someone was buying Google it’d be interesting. :cool:

Pallab May 4, 2007 at 11:19 pm

The deal is off the table according to The Wall Street Journal.
This deal would have definitely helped MS in two cruicial areas – Search Engine and Online Advertising.
However, the advantages for yahoo is less obvious (atleast to me). MS would be able to deliver yahoo’s content to a larger and wider audience. But, from technichal point it wont add too much to yahoo’s offering. adCenter and Live search are not doing too well.
I suppose that’s why Yahoo rejected MS’s offering.
You can read my take on this deal here.

Guillermo May 5, 2007 at 1:16 pm

Well the problem is not that easy, there are a lot of elements involved in a deal this big. First, Yahoo and MS are competitors in some areas and Google knows that the alliance would have a big impact in the long run. In addition, not only MSN would benefit from this deal, but Yahoo would become part of the most dominant software force in the world today, not too shabby either.

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Voluntary Death May 4, 2007 at 11:58 pm

I’ve tried to use Live Search since it looks better and feels better. However, it’s just the looks and the feel. When I do a search, most are really relevant, BUT their index is not as updated as I am forced to go back using again since FOR THE LAST 2 months that I’ve submitted my site to both of the search engines…

Google indexed my site after 4 days or so… while Live Search… guess what? 2 months past and until now…. I don’t find my site there. (ONE GOOD REASON WHY GOOGLE IS STILL THE BEST FOR BLOGGERS)

Court May 5, 2007 at 12:18 am

I think it’s kind of funny that people are tearing up Yahoo like they’re nothin’. I don’t love their search results but they’re better than MSN’s and Yahoo is the #1 site for traffic in the known universe. I think they’re doing ok.

Guillermo May 5, 2007 at 1:17 pm

The traffic is definitely an advantage and that is why MS is so interested.

Cody May 5, 2007 at 12:53 am

I use google for all of my search, but I do like some of Yahoo’s technologies (like their widgets and messenger). I’m just scared that if the two DID actually merged, MS would ruin what Yahoo! does have going for them.

Voluntary Death May 5, 2007 at 1:43 am

exactly. if this merger will happen, then bye bye Yahoo Messenger and hello to Windows Live Messenger new users. Although I do think that is only a bonus for MS since it’s not just the messenger that they want to hit. (you can IM from Yahoo Messenger to Live Messenger and Vice Versa though)

Everyday Weekender May 6, 2007 at 12:06 pm

you think MS would do that?.. you think they would force people out of Yahoo Messenger? .. I’d suspect they’d lose a lot of following that way. :idea:

Shaun Carter May 5, 2007 at 1:28 am

This could happen, but it will never go through. Anti-trust laws won’t allow it.

Guillermo May 5, 2007 at 1:20 pm

This is one the most important challenges against this deal indeed.

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Cheap Custom Content May 5, 2007 at 4:05 am

I use Google search 99.9% of the time, too, but I don’t think Yahoo is doing that bad; Yahoo IS Yahoo. Yahoo mail and messenger are still very much used by a LOT of people and I am personally quite pleased with them (Gmail and Gmail talk aren’t all that, if you ask me). I think, for now, Yahoo could do a whole lot better without merging with anyone.

Guillermo May 5, 2007 at 1:19 pm

I agree. I still use my yahoo e-mail account I got many, many years ago. I forgot about hotmail and don’t use Gmail at all.

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

JasonJ May 6, 2007 at 2:31 am

This would be a major reason to buy Yahoo — traffic. But Microsoft would have to make sure they consolidate their net properties with that of Yahoos. Otherwise there are no cost savings — and based on Yahoo’s EPS data, they need all the savings as possible to make the deal remotely worth it.

-Jason, from Ask Jason

Cheap Custom Content May 6, 2007 at 2:54 am

Sure, but won’t Yahoo’s over-all image get tarnished for “selling out”?

Everyday Weekender May 6, 2007 at 12:09 pm

I don’t think ‘selling-out’ would tarnish their image. I mean if Yahoo is in trouble and MS eats them up, I don’t think it would matter.. yahoo becomes MS.. their image would be tarnished regardless.

James May 5, 2007 at 11:34 am

I think it could be good. Combined, they could be enough to provide competition that would keep things in check.
It will only work if they actually pool resources and improve things together. If the two companies just join, and no improvement is seen, then it won’t do anything.

Law of Attraction May 5, 2007 at 12:11 pm

Thats evil :twisted: and will not do much for MS. Bad idea..MS neds to become more creative!!

Everyday Weekender May 6, 2007 at 12:10 pm

Its what they’ve always done though.. More is always better right?.. it takes too long to start from the ground up, so there more you can absorb the further your reach..

Guillermo May 5, 2007 at 1:21 pm

This was an excellent posting John! :wink:

Guillermo Zuniga
Internet Marketing -Microsoft
Guillermo Zuniga Dot Com -Internet Marketing for You!
Wiki eBooks -Many Writing as One!

Bob May 6, 2007 at 1:08 am

Dos any one have any information about the new Yahoo promotion… recieve one free yahoo directory link worth $299.00 if you add a nofollow googlebot tag to your site.

Cheap Custom Content May 6, 2007 at 1:29 am

Yahoo could still redeem themselves and work on their search capabilities. It’ll be tough (close to impossible actually) to overthrow Google, but who knows what else they have under their sleeve.

JasonJ May 6, 2007 at 2:32 am

Well it looks like the deal is off — lol, actually it was never really on:
Deals Off

What will happen to Yahoo’s stock price on Monday?

One guess.

Everyday Weekender May 6, 2007 at 12:10 pm

taco. That’s my guess.

John Luc May 6, 2007 at 10:50 pm

John as usual you know how to stir the pot,(in a good way)

Microsoft could well afford to buy Yahoo if it wanted and the payoff would be huge for decades to come.

In todays world a lot of marriages are done for a matter of conveience so why not businesses do the same as well.

If this is truth or more of just Yahoo and Microsoft both jousting for some press time, then it would indeed be a bit of a pain for google or a nice little thorn in the side, but I don’t think google would run scared, they didn’t get where they are today by laying back and waiting for things to happen, they take action hit people before they know what’s up.

The big “G” has more than a few tricks up it’s sleeve.

When I heard that they had purchased a huge plot of land and bought a dam, yea that’s right Google bought a dam to cool their computers I knew something is going to be coming out soon with them.

Keep up the good work John

John L.

Samay May 7, 2007 at 11:48 am

Google is all set to Capture market as much as possible. Microsoft is worried with google’s increament, thus it wants to compete by overtaking

Pablo Rosales May 9, 2007 at 5:47 pm

I have to agree with this one

Law of Attraction May 8, 2007 at 4:03 pm

in the end nobody is buying anybody…..MS will be much better by hiring or acquirin startups than Yahoo….what happened to good old competition…MS will not give soo easily