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Yahoo is a fake target: Microsoft wants Ebay! May 5, 2007

Posted by deminvest in ebay, goog, Google, Internet stocks, investment, MSFT Microsoft stock, nasdaq, Nasdaq stock, Single stocks, stock I own, stocks, Yahoo, YHOO.
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I 100% agree with John Gruber of Daring Fireball when he says:

“Personally, a merger between the two just seems like a disaster”

Microsoft and Yahoo have the same problem: they are loosing the Internet battleground to Google!

They can’t merger because their businesses overlap:

1) both are leaders for Internet Portal visits. Unfortunately neither has Google’s ability to convert those visits into lucrative searches.

2) both are leaders in messaging systems users

3) both are still leaders in webmail usage, but Gmail is catching up

4) Yahoo’s profits are shrinking. Microsoft’s Internet activity only post losses.

5) both are threatened by Google, but neither has any clue about how to fight back

Two companies with large overlapping businesses merge to reduce workforce, cut expenses and raise profits. They don’t merge to boost growth. Actually it would be a suicide to fire talents that Google would be more than happy to attract.

Actually Pete Cashmore says that talks between Microsoft and Yahoo are not happening.

So why those talks about a Microsoft – Yahoo merger?

I think it is a test for the real thing.

Microsoft wants hints about what may happen if they announce their public offer on Ebay.

Why should Microsoft aim at such an expensive ($42B) incompatible looser, when they can bet Ebay, a total winner at about the same price (46B) ?

Microsoft Ebay Merger

Ebay is a great Internet Company. Market leader on:

1) e-commerce

2) on-line payments

3) on-line phone-calls.

Ebay has the ability to turn visits into money. Ebay can fill MSN with advertising that call money. Ebay can stop being Google’s best customer. Skype can become world’s greatest Telecom if embedded into Windows. Paypal can become World’s greatest bank if embedded into Windows…

I already wrote that MSFT should swallow EBAY

Those lousy rumors about Yahoo, may hide the real target of Gates and Ballmer: jucy EBAY!

What does Microsoft know now that they did not kno 2 days ago?

1) When such merger is announced, shares of the target go up 20%… at least. They have to spend EBAY price + 20% hike + 10% premium to make the merger possible… about $60B

2) The public is so impressed by Google’s dominance of the Internet, that a huge merger like MSFT-YHOO has chances to be accepted… And if the World says “yes” to Microsoft – Yahoo, it won’t object too much to a Microsft – Ebay deal!

Comments»

1. Pixelco Blog » Blog Archive » Lo mejor de la semana - May 6, 2007

[…] Yahoo is a fake target: Microsoft wants Ebay! – Democratic Investments. […]

2. smith - May 8, 2007

yes

3. Orothe - May 9, 2007

Microsoft and Yahoo, if merged, would pose a threat to Google, though I still believe Google will come out on top.

Besides, what if google buys Ebay? that would totaly ruin your, unusual plan of companies becomming the best ‘if’ list..

4. deminvest - May 9, 2007

Microsoft and Yahoo, if merged, would simply have two systems, both unable to deliver significant results to web searches. Two lousy systems don’t make a good one.

Google buying Ebay would be a very interesting possibility, but Google doesn’t have enough cash. They would have to borrow 5 times their annual revenue… Not possible.

They could buy it using their stock. Ebay has a Market Cap 46.83B and Google 145.16B considering that public offers made with paper rather than cash, need higher premiums to succeed. Google founders would have to give away a huge chunk of ownership of their beloved toy. I don’t think they are willing.

5. buildabetterworld - May 9, 2007

I don’t know about that. In fact, Yahoo has all the functions eBay has by spending billions acquiring other companies. Yahoo actually has a much greater growth potential than eBay since it has a firm grasp over the Asian markets, and are recapturing North America. Smacking eBay down and capture it would just be an icing on a very delicious chocolate cake.

6. deminvest - May 9, 2007

What “functions” does Yahoo really have?

Yahoo started its auction system with great hype… then just gave up on it. Yahoo has a talking system, but everybody uses Skype. Yahoo does not have any payment system

Why do you say that about Asia?

Yahoo had to give all its China activities to Alibaba, because Yahoo wasn’t able to compete with Baidu and google.cn.

What about North America?

Yahoo is consistently losing market share to Google. It doesn’t seem to be “recapturing” anything in North America.

7. deminvest - May 9, 2007
8. Adeel Chowdhry - May 12, 2007

Google has made Microsoft and Yahoo worried. But, I don’t think M & Y merger is good. However, I agree with M & eBay.

9. ProsNGurus - October 12, 2007

Google will keep the lead even if they merge.

10. Stasigrii - November 4, 2007

Hello, very nice site, keep up good job!
Admin good, very good.

11. Jearrotabrets - December 5, 2007

emm.. nice post dude.


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