According to MarketWatch, Terry Semel, Yahoo!’s (YHOO) CEO, spent most of a recent presentation talking about the common interests of his company and Microsoft (MSFT). Semel described why the companies "have a shared interest in both presenting properly licensed content, and in setting firm standards for purchasing online ads."
According to Reuters, Microsoft’s (MSFT) CEO Steve Ballmer was spending the day saying that a large acquisition was possible for the world’s largest software company. "In general, though (we focus on) smaller deals, we are open to large acquisitions".
The press has reported that negotiations between the companies ended some time ago. But, that is still hard to believe.
Yahoo!’s revenue growth is now only 10% in a good quarter. Hitwise reported that in April, Yahoo!’s share of the US search market dropped to 20.73% from 22.21% in April last year. Microsoft’s search share was even worse. It fell to 8.46% from 12.59% in April-over-April figures. Google’s (GOOG) share rose to 65.26% from 58.64% a year ago.
Without a merger, both Yahoo! and Microsoft search would seem to have very little future. It is easy to say that the two company cultures would clash or that software and internet companies cannot live under one roof. But, two dying men clinging to one life raft may view the world a little differently than when they are on dry land.
Douglas A. McIntyre
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