Appatic

There is a new rumor swirling around about Microsoft wanting to buy Yahoo.

I find it hard to believe. But even if Microsoft had considered that Yahoo was worth a second look. They would not buy now. They still got the Skype deal to complete.

And because of that deal and other moves Microsoft has made and it is going make. It could face problems in going through. As it would give Microsoft a monopoly on IM and Mail.

You can bet other companies would complain to that part.

IF they still would be willing to gamble on going with a deal. I think they should not pay a dime over 25 billion for Yahoo. After that, they should just sell off all the parts Microsoft don't need. Parts that could actually be sold of for up to $12 billion if sold well. But that even if sold in a firesale would fetch not less than $7 billion.

What is that Microsoft could want from Yahoo?

1.-Their Search. But they already power it, so that is not enough reason.
2.-Their Display Ad biz. That they are partnered with. But is still a valuable thing.
3.-IM. Microsoft is already #1 and is going to be getting stronger because of Skype. Not much point on it
4.-Mail. Something else Microsoft is already #1.
5.- Video properties. Valuable because would boost MSN and Bing Video to #2.
6.- Other internet properties. Valuable only for branding and marketing.

Everything else from Yahoo would have to be put up to for sell.

Things like their stake in Yahoo Japan and Alibaba.

Conclusion

Don't believe it. I don't think Microsoft needs to buy Yahoo anymore thanks to the deal they already got locked for 10 years. Deal that don't changes even if Yahoo is bought by someone else. They would still get dibs on the option for buying Yahoo Search and Ad business. No matter who would get to own Yahoo.

But if it got to happen, it could face trouble to go through. And Microsoft should not pay a dime more than 25 billion for it. Microsoft should then break Yahoo and sell off it's parts before integrating it. That way it would minimize the blow and could indeed be well worth the gamble within 3 years.

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