Tuesday | 2 December, 2008
Yahoo: Will any other suitors come a-courting?
Apple? Analysts say probably not
Linda Rosencrance 06/02/2008 08:47:44

While Google has reportedly shown an interest in collaborating with Yahoo to ward off a potential takeover bid from Microsoft, and other companies have contacted Yahoo, it's unlikely that any of them could beat Microsoft's offer, analysts said Monday.

In a statement Friday, Yahoo said that the company and its board will evaluate Microsoft's US$44.6 billion offer "carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders." A Yahoo spokeswoman Monday said that the company wouldn't comment beyond what was said in the statement.

However, Reuters reported that a number of companies have been in contact with Yahoo, although it was uncertain whether any alternative offers had been made.

Last December, Kathy Sharpe, CEO of Sharpe Partners, a New York-based marketing and consulting firm, wrote in a blog post of a fantasy acquisition that involved a takeover bid for Yahoo by Apple.

Last week, someone told Sharpe that an Apple bid for Yahoo was about as likely as the New York Giants beating the 18-0 New England Patriots and winning Super Bowl XLII.

Even though that fantasy became a dream come true for the Giants, Sharpe doubts her Apple fantasy alternative to Microsoft's offer for Yahoo will ever play out.

"I don't think under these circumstances anyone wants to get into a bidding war with Microsoft," Sharpe said. "The price is so high, and even if [Yahoo's CEO] went to [Apple CEO] Steve Jobs, and even if they had even been talking about something that could work out as a way for the portal part of Yahoo to become part of what happens with iTunes, in some sort of holistic way, that's not what's going to stop [Microsoft's bid]."

Sharpe said she didn't think Yahoo's stockholders and its board would let CEO Jerry Yang say no to Microsoft's offer of US$31 per share, a 62 per cent premium over Yahoo's Thursday closing price. And she said that's why Microsoft came out with its high bid -- to stop all conversation.

However, Sharpe's not so sure a Microsoft-Yahoo deal would solve Microsoft's Google problem.

"I think it creates a bigger problem for Microsoft," she said. "They have to now integrate with a very large portal, and they don't know how to do a portal themselves, and it's unclear whether Yahoo does either. They have two massive sales forces and two search engines that have to be integrated. It's possible when they come out of box again, they'll be a pretty impressive force, and they're going to push the ad market around a bit, but they're not going to take search share from Google. And in the six months it takes them to get this deal done and finished and through the hoops and the companies put together as one, Google will march on, and we know what that's like."

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