Merrill Lynch to Microsoft : Buy Yahoo now

I don't think Yahoo! will accept this merge... No matter the price.

It would ultimately be up to the shareholders not Yahoo's management.

I think the shareholders would have to have a reason to feel true outrage at Yahoo! and/or great trust of Microsoft.

Comparing their stock charts over the last 5 years would not make me want to get my Yahoo! shares merged into Microsoft (unless they were paying mostly - or all - cash combined with an outrageous 50 to 100% premium over current share value).

As a sideline, Microsoft and Yahoo are falling in the past 6 months, whilst Google is rising.

Let's face it guys... Even a recent report noted that Microsoft Employees don't use MSN, instead defer to Google.

Now in light of this we have to think about it. MSN could (and will) Leverage Vista as their new comically dubbed 'MSN OS'. In short my guess is that you will need a PHD in computer science to move the default search from MSN to Google. However that being said, I still think Microsoft has a long uphill battle against Google in order claim something more than their current 8% market share or so.

Now Microsoft made some horrible mistakes in the past in regards to search. They first of all branded it MSN and tied it to Microsoft.

They then made MSN look like Yahoo (more about Brittney Spears and less about Business to Business) then they tried to make it AOL with dialup, then they tired a host of everything.. .everything other than search. The site itself 'weighs' roughly 6-7 times as much as Google's homepage, filled with javascript and all sorts of stuff.. meaning that it loads up way slower.

Their solution was to make http://search.msn.com after following Yahoo's lead with http://search.yahoo.com thinking that a third level name is the same as the main domain in people's eyes.. (Remember 12 years ago.. http://altavista.digital.com )

.. these companies don't get it yet... people want to search for their stuff.. not get flash popups thrown in their face about whoever is the teeny bopper of the day.

The point is that in my opinion MSN is a ruined name. Their only hope of doing anyting is for Yahoo and MSN to merge.. that way they combined might have what.. 35% market share?

Even both of them working together under the same owner it is still an uphill battle.

Microsoft need a damn brand name for their search product. MSN, nineMSN (aussie), Live, Sympatico (canada), search.msn.com, and dozens of other flavours won't ever cut it.

They need a Brand name that isn't "MSN". I can't believe "live" is the best they could come up with.

Is it pronounced "liv" or "live" as in "alive"?

They don't necessarily need to buy yahoo to have a brand name.

It's an idea that has been floated now for a few months. When it was first floated the general impression I got from mainstream and blogger press was neutral.
Now Merrill is "commissioned" IMO to advance the idea for a more serious run at industry buzz. I'm not reading anything that condemns the idea. I believe it will happen and why not?

"Microhoo" will jump to about 37% of search share and can leverage MSFT's software and sales people to win search distribution deals over Google. MSFT also brings games, something Google doesn't have.
Yahoo's new emphasis on social search, UGC, and search and share fills in for Miscrosoft's listless and boring "Live" offerings. Microsoft's new local and maps are every bit as good as Google. Yahoo News is better than Google News by volumes. Yahoo adding blog perspective right on the news page is miles ahead of Google. Combined they will be a force for Google to contend with.
I look for MSFT to make an offer of $42. per share and after the Yahoo shareholders grumble and threaten to sue blah blah it will settle at $49 per share.
That's my comment!

I look for MSFT to make an offer of $42. per share and after the Yahoo shareholders grumble and threaten to sue blah blah it will settle at $49 per share.

It was 43.66 in Jan.. They will have to offer much more than 49 to actually close a deal.

But I'm not the expert here.. Just my 2 cents.

Baidu.

Analysts/futurists love China and G is already getting their butt kicked there.

A quick win for the gipper.

please no.

I actually like Yahoo.

That being said, of course it would do wonderfully for MS to acquire the marketshare that Y! has developed over the years. Is it even fathomable that Y! would accept such a merger? What's that saying? 'Truth is stranger than fiction' It could happen some day if that saying decided to land on this possibility.

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It is sad because a couple years ago I would have sworn that MSN would be a player in the space. They seemed hell bent on getting into the space and throwing money toward search. Their search is a disaster however, and as much as I'd like them to close the gap on Google a little, MSN search is just atrocious.

To be honest, I think their opportunities have come and gone.

The first was to acquire Teoma/Ask. Yes, they aren't the best in search technology, but they are miles ahead of where MSN is at right now. They could have saved a lot of the time and money by already having a base to work from (like what Yahoo! did). They'd have gotten brand recognition in Ask.com, immediately took a little bit of market share, and given some legitimacy to their search efforts.

The second was to pull out all the stops with AOL. They really needed that market share. I think that losing out on them to Google not only hurt them with market share, but in morale. They needed to take a loss with AOL to get their searchers and didn't. It would have been a 8 point swing I believe overnight.

So where does that leave them? I'm actually at a point that I think they should just scrap search and go back to licensing out Yahoo! results or something. Put the time and money into their ad system that should be able to blow away the others with the demographic profiles they should be able to build with the new Windows. It seems they can't even do that right as their ad system is clunky, slow, and lacks any heart.

The downward spiral just doesn't seem to have an end in sight. I wonder if we'll look back on this as one of the big disasters Microsoft had.