When Rupert Murdoch stunned Wall Street with a $5B offer for Dow Jones, he ensured that
- no one would get close to bidding for the venerable publisher of Wall Street Journal and Barron’s, and owner of Marketwatch.com
- and DJ’s board and shareholders would not be able to refuse the offer.
Should MSFT make a similar, open bid for Yahoo!? Today the MSFT/YHOO storyline is getting more and more ink as MSFT is openly calling to becoming a #2 in online ads.
Yahoo! is at $26, midway of its $22-33 range that its traded at for the past 12-18 months, that means $30-40B in market cap… so if MSFT openly made an offer for $50B through a mix of cash and stock, would Yahoo!’s board (who I believe has introduced a poison pill) really be able to say “thanks, but no thanks?”
After all, as a YHOO shareholder myself, I don’t see what YHOO plans to do to hit $50B in market value, frankly. I say that, even though I think YHOO is the best positioned online media company around. There is a disconnect between potential and reality right now.
As a web professional, I think YHOO + MSFT can actually work quite well when you consider how quickly technology and media are meshing and how much software and advertising are becoming intertwined.
As per culture? Give me a break! How many people at YHOO today were there in 1994? How many MSFT people are not products of the Web and don’t live, breath and sleep Internet?
I don’t know, but if YHOO’s board remain impartial to a merger or sale to MSFT, maybe MSFT should take a cue from Murdoch after all?
Read our previous post on why YHOO and MSFT make a decent fit, here.
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WatchMojo NewsletterFor some time I’ve been saying that the Web will do to TV a greater carnage than what the Web did to print. I’m biased because I am in web video, but ask yourself what came first: my belief that web video will kill TV or my desire to get into web video?
Anyway, a few interesting pieces today: Will It Take Television 10 Years To Learn The Lesson Of The Wall Street Journal and The New York Times? Good question.
Will the networks spend a decade pouring their efforts into closed Internet video offerings that no one seems to be interested in? Will they continue to lock up their content with DRM, when people’s attention is moving to a larger variety of video players than ever? Will they continue to sell a paltry number of videos via iTunes, while people are downloading free Internet videos by the billions?
I’d say by virtue of TV being a $250B offline revenue stream, TV cannot simply embrace the Web because the upside in web video is so small for TV companies that that would be suicidal. So they are in a far tougher spot than print ever was or will be. Mind you, the more “good content” (read: not user generated crap) we find online, the more advertising dollars will flow to the Web, but it won’t be fast enough or large enough to make a dent in TV company revenues. Hence the tough spot and why TV companies are nervous and envious these days. It’s also why I’d be buying up every web video startup if I were a TV exec. But again, I am biased. Why? The article I linked to asks:
If the networks do wait a decade to free their content, who will be their competition when they finally do open up?
Again, good question. All I am doing is stating the obvious, after all; a NYT article states: Web Videos Stealing TV Viewers, and Marketers.
Henry “The Bull Turned Bear” Blodget has some commentary of MSFT’s online ad ambitions - coined as 10, 20, 30, 40 by division president Kevin Johnson:
Blodget adds: “The first two goals are achievable. The second two are a pipe-dream–unless Microsoft buys Yahoo (YHOO)…”
Now, take this with a grain of salt because I own YHOO shares - and they have been caught in a 22-33 range for what appears to be forever - but I am pretty darn sure that MSFT will sooner or later remake its image enough to seem like a good marriage partner for Yahoo. Sure, Jerry Yang might not use MSFT products, but with age comes wisdom and common sense. Ultimately, YHOO has a great future if it realizes that it won’t catch Google in search. MSFT needs to realize that alone it won’t even catch up to Google either. However, together, they might not need catch up Google in search to become a far greater new media online advertising behemoth that would be far more complete, diversified and strong than Google.
You know what I mean by MSFT might remake its image: shave its armpits and wax its legs (aQuantive), get a manicure and what not ($240M Facebook investment). It might even do some serious surgery (spin off Bungie Studios). But underneath the veneer: this remains the same MSFT at present time: a company that largely makes money on pretty much anything but online ads. YHOO, however, is not really interested in marrying a software company, but as MSFT becomes more and more about the web and entertainment, then it becomes a better and better fit with YHOO.
Ultimately, if MSFT wants to get serious about web advertising, it needs to get serious about acquiring YHOO, which remains the only company that can help it get there.
After all, IAC is not the solution, neither is AOL.
Search is important, display banner inventory is too, so is video inventory and mainly, having a network outside of one’s site, only YHOO gives MSFT all of these things. I could go on and on, but YHOO music would be a shot in the arm of Zune; Yahoo! Movies and Games would be a perfect fit for the XBOX franchise, too.
Mark my words, it might not happen because YHOO still thinks it has the potential to close in on Google, but that is lunacy. YHOO and MSFT are a far better fit than the purists would claim… and that remains a considerable opportunity.
Disclaimer: Long YHOO
