5 reasons to worry about a Microsoft/Yahoo merger
- TAGS:antitrust, mergers, Microsoft, Yahoo
- IT TOPICS:Enterprise Software & Services, Internet, Software
Most mergers don't work. Different studies of past mergers show that 53% to 70% of mergers (depending on the study) failed to reach their financial goals.
Think: AOL TimeWarner. "This has the feel of AOL/Time Warner 2.0 until proven otherwise," says Dennis Berman, the star M&A journalist at The Wall Street Journal.
A takeover bid like this could scare away Yahoo's people assets, Berman says in his Deal Journal blog, although Microsoft has promised big retention bonuses for key engineers and execs.
How will combining two weak search players (MSN and Yahoo) yield a strong one? People will stop googling? Ha. As one commenter put it: "Tie two rocks together and they still sink."
The U.S. Department of Justice Antitrust Division will be taking a look at this combo. Microsoft will argue that this is the only way to compete with the Google giant. That argument may work in a Republican administration, but it may not work in a Democratic administration next year.
Related Articles and Opinion
- Preston Gralla: With SP1 and Yahoo bid, Microsoft becomes the new IBM
- Robert Mitchell: Microsoft + Yahoo = Sears + Kmart
- Sharon Machlis: Microsoft's bid for Yahoo: the risks
- Preston Gralla: Microsoft-Yahoo deal: The only way to save Microsoft Live



