Drummond, never one to hold back, raises some questions regarding Microsoft's Yahoo! offer. He starts by saying the openness of the Internet is what made Google -- and Yahoo! -- possible. And goes on to say that, because of the openness, good ideas spread quickly and users benefit from the constant innovation an open system provides. According to Drummond, this is what has made the Internet a popular and exciting place. He also asks a few questions:
Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?
Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet?
Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services?
Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet?
Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services?
Three very interesting questions depending on your position, perspective and opinion. Personally, I am amazed with Google's innovation - I use and encourage others to use their applications and would hate to see things slow down. Read Drummond's complete post (it's short) if you can.
Let's look at where Yahoo! is on this. The company has not had a good history with either Microsoft or Google and the offer has put them in a difficult spot. Most experts are saying if Yahoo! does not take the deal with Microsoft the company will have to form some kind of partnership with Google - most likely agreeing to have Google run their search engine and take revenue generated from ad clicks. Another option for Yahoo! would be to go private with a leveraged buyout. In an Associated Press Article titled Microsoft bid backs Yahoo into a corner , Stifel Nicolaus analyst George Askew is quoted, saying this option (leveraged buyout) would involve Yahoo! going into about $20 Billion of debt and having to layoff approximately 4,500 (31%) of their current employees. Neither of these appears to be a good option for Yahoo!
Where's Microsoft on this? They want Yahoo! to the point where the company may end up raising the bid on the current $41 Billion offer. Microsoft also may be financing a portion of the deal if it goes through which would be the first time the company has taken a loan to buy a another company.
Yahoo! may not have any other options at this time - other companies that may have the money (Comcast, Verizon, AT&T, etc.) do not appear to be interested at this time...... In the same AP Article, investment banker Peter Falvey from Revolution Partners is quoted:
At the end of the day, I don't think they (Yahoo!) are going to be able to turn down Microsoft.
Yahoo!'s board has a difficult decision to make.
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