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Microsoft's (MSFT) Ballmer Waits For Yahoo! (YHOO) To Lose Money, Then Move In For The Kill
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Microsoft’s (MSFT) CEO Steve Ballmer is making a good show of trying to get Yahoo! (YHOO) to discuss selling its search business. The combination could give MSFT 30% of the US market to Google’s (GOOG) 60%.
Ballmer once again said that he would like to sit down with Yahoo!’s new CEO Carol Bartz. But, that statement hides the fact that Yahoo! may well lose money this quarter, and Ballmer has no reason to talk until then. All he needs to do is send the message that he is open.
According to the AP, “Ballmer said at a technology and media summit Thursday in New York that a deal would help improve Microsoft’s Web search business by expanding the base of users.”
But, he won’t overpay for getting Yahoo!’s crown jewels, because he won’t have to.
A look at Yahoo!’s Q1 2008 numbers show that if display advertising at the portal drops 25%, Yahoo! could post a loss in the current quarter. Last year, the company’s operating income for the period was only $121 million on more than $1.8 billion in revenue.
Not much of a margin for error.
Douglas A. McIntyre
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