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Preston Gralla's picture
Preston Gralla

Seeing Through Windows

China could squash Microsoft-Yahoo deal

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Rated -5
365 Votes

As if Microsoft's attempt to buy out Yahoo wasn't in enough hot water, here comes more trouble: A new Chinese antimonopoly law, slated to take effect in August, could end up killing the deal.

The New York Times reports that the law "gives Chinese regulators authority to examine foreign mergers when they involve acquisitions of Chinese companies or foreign businesses investing in Chinese companies’ operations."

At issue would be Yahoo's 2005 investment in China's largest e-commerce firm, Alibaba.com. Yahoo owns 40% of the company.

It's too early to tell whether China will try to squash the buyout, but I'm betting that it will. Recently, the Chinese company Huawei Technologies was forced to pull out of a planned investment in 3Com because of national security concerns in the U.S. So China may well have payback in mind.

In addition, as the Times points out, "the Chinese have in recent years become more and more alert to the role the Internet plays in their economic and political affairs." So any deal involving the Internet will most likely come under scrutiny, especially a blockbuster like this one.

If the deal doesn't go through, I think it will be a good thing for Microsoft. As I've written before, the buyout would saddle Microsoft with an underperforming company, and divert its money and resources from more important ventures.

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What People Are Saying

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Rated +14
338 Votes

LOL

Wow, imagine China's authoritarian capitalists nixing one of America's most corrupt capitalists, Bill Gates. In the meantime, I have a hunch we're going to see a rise in anti-Microsoft sentiment in Latin America in the very near future...but that's just an educated guess.

Like they say, what goes around comes around.

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Rated +3
341 Votes

Microsoft-Yahoo Squash

I don't agree the law could squash the deal but can appreciate the angle. When you find out what Microsoft has for investments in China, you might think twice about this position creating any issue.

-Microsoft's Princess

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Rated -6
388 Votes

Starving out Yahoo.

Many of us Remember Microsoft's attempts to become lord and ultimate master of computers in the 1990's. And after failing... they made XP, then Vista. Which turned into ME2.

So now they've set their grubby sights on owning the major search engines of the internet. Saddled or not, I'll bet they will fire the bulk of Yahoo's workforce, and make the Yahoo.com website a redirect to MSN.com as soon as they manage to buy it.

Then, using this newfound glory they'll kill off google.... And after that likely start engaging in heavy duty corporate censorship.

Good thing China might squash the deal.

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Rated +8
350 Votes

Microsoft MAY be able to buy

Microsoft MAY be able to buy Yahoo, true, but Google? Why on earth would Google sell to Microsoft? Yahoo makes sense; they company isn't doing as well as it one did. Google, on the other hand, is on the rise. I'm waiting until they make their own operating system. =D

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Rated -1
375 Votes

Wow, this may be the dumbest

Wow, this may be the dumbest comment I've ever read.

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Rated +5
301 Votes

You can't be serious

Chinese antimonopoly law? That makes about as much sense as Snow skiing in Brazil…..