Microsoft acquistion of Yahoo faces roadblocks

Early Sun­day, I saw this on a Boing­Bo­ing arti­cle: Google legal coun­sel David Drum­mond has released a state­ment that crit­i­cizes the pro­posed merger as anti­com­pet­i­tive. Here’s a New York Times arti­cle about the announce­ment. Google claims that Microsoft would use Yahoo to push pro­pri­etary solu­tions. Microsoft has a long his­tory of devel­op­ing and imple­ment­ing its own exten­sions to Inter­net standards.

Eliz­a­beth Mon­tal­bano of Net­work­World had sim­i­lar con­cerns in her arti­cle. She and the Reg­is­ter point out that Microsoft is really buy­ing Yahoo’s com­put­ing plat­form and user base, partly because Microsoft’s Inter­net pres­ence ls ineffective.

Of course, both com­pa­nies have dif­fer­ent cul­tures. One unit­ing fac­tor may be their mutual envy of Google, as dis­cussed in this Busi­ness­Week arti­cle.

This is not a “done deal” by any means

Yahoo’s board will most likely resist the buy­out offer, which may give the Fed­eral gov­ern­ment and the EU more time to raise their objec­tions. Busi­ness­Week has a good sum­mary of the poten­tial chal­lenges to the pro­posed pur­chase in this arti­cle.

Even if Microsoft does actu­ally pur­chase Yahoo, vic­tory is not assured. As Joe Nocera of the New York Times pointed out in his arti­cle today, Microsoft’s online divi­sion is the only one of the company’s five strate­gic busi­ness units (SBUs) that loses money. Adding Yahoo may not stem the flood of red ink.

See my Fri­day, 1 Feb­ru­ary 2008 post and com­ments about the pro­posed Microsoft pur­chase of Yahoo for more infor­ma­tion and links.

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