The Microsoft acquisition of Yahoo! couldn't have been timed better as this article points out. Yahoo's recent and dramatic fall, plus its lack of high profile management, made it possible for Microsoft to offer a substantial premium yet acquire the company for only $44 billion. To boot, Google just reported earnings that disappointed the street and fell sharply - plus it is in the midst of trying to get legislative approval for its Doubleclick acquisition in Europe and can't easily fight this one off. Google is going to wake up and find itself in significant jeopardy now. They have developed some neat products (Google Earth, etc.), made a bunch of non-core acquisitions, and are about to bid most of their cash on a wireless license. Yet, there true strength has always been in online advertising and most specifically paid search. Microsoft and Ballmer are aiming right at the heart of their online advertising business now. A successful Yahoo! integration and an acquisition of a one or more of the really unique upstart search engines and Microsoft will be a real player finally. I therefore would avoid the temptation to view Google's stock as a bargain at $500.

 

Submitted: Feb 2, 2008    Views: 199    Comments: 0    Likes: 2   


View Article: http://www.nytimes.com/2008/02/02/technology/02yahoo.html?_r=1&adxn...


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