Sunday, February 10, 2008

Yahoo to Microsoft....

Microsoft is obviously desperate to gain Yahoo audience or else they wouldn't have offered 62% premium on Yahoo stock. This may not necessarily indicate that Microsoft is in desperate need to get into search engine business. They're doing alright, believe it or not. Microsoft may be more interested in acquiring a better ad revenue system.

That's a very interesting concept. Where Yahoo decided to throw exteremely annoying smiling-girl dating commercials in the mailboxes and browsers of their users, Google took a more educated approach. They decided to target the content for the user. In other words, the user is not seeing a dating commercial if they're shopping for memory in a page.

While Yahoo hasn't changed their ad model (well they have probably made the banners bigger), Microsoft may have decided that this is a good time to get the Yahoo userbase and set up a good and profitable ad revenue model. This will be good for Microsoft and the users. And the uses might appreciate the ads a lot more if they're invested in the ad business.

However, Yahoo's response was to act like a big company and refuse. They're asking the Microsoft pay even more! Another 13 billion!

Wow, that's a lot of money! Microsoft has the option to directly take the deal to Yahoo shareholders. Well, Microsoft shouldn't pay the extra money. Already the bid is pretty decent.

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