Doubtful deal for the giants

I’ve always been a sceptic. If you’ve read this column for a while, you’ll know that already: nary a story happens in the tech industry that I don’t raise at least one eyebrow at, and often the other as well.

Sometimes I waggle the two eyebrows up and down in rapid succession. It’s quite a party trick.

But I think I’m progressing beyond sceptic and into cynic territory. At least when it comes to this Microsoft-Yahoo thing. It just doesn’t seem likely to me.

In case you’re a little out of the loop (not likely if you’re a CRN reader) a couple of weeks ago, the Rupert Murdoch-owned New York Post broke a story that
Microsoft and Yahoo were in serious talks regarding a merger — specifically, an acquisition by the former of the latter in exchange for $US50 billion or thereabouts (what’s a billion or so between buddies?). The following day, Dow

Jones-owned The Wall Street Journal picked up the story and ran with it, saying that its sources confirmed that the two companies, which had been dancing around possible agreement talks for years, were back at the table.

Now, here’s where the cynic in me surfaces. I’m trying to recall the last time the New York Post — a tabloid not unlike The Daily Telegraph or The Herald-Sun — scooped The Wall Street Journal on a major business story. It isn’t coming to me. That it should happen less than a week after Murdoch announced he was making a play to acquire Dow Jones and thereby The Wall Street Journal just seems too coincidental. You should see my eyebrows go.

The story has of course been picked up by every news outlet on the planet at this stage, but have you noticed how none of the later stories actually add new information? It’s all “according to reports in the New York Post and The

Wall Street Journal …” Surely somebody else has a good enough source in either Yahoo or Microsoft to contribute some morsel of extra information to the situation?

The other thing that is giving me apoplectic supercilia is the fact that the underlying assumption in the stories from both papers is that neither Yahoo nor Microsoft is capable of taking on the juggernaut that is Google on its own. I will accept that Yahoo has gone off the boil somewhat in the past few years, and Microsoft may have lost focus if the Vista debacle is anything to go on. But the idea that either of these companies would be looking to throw in the proverbial towel at this stage of the game just seems, well, eyebrow-raising.

The acquisition of Yahoo would not be a small thing for Microsoft, like acquiring some Silicon Valley start-up with a cool idea and a working prototype. Fifty billion dollars is big money in anyone’s language, and the inherent problems would, I believe, outweigh the marginal benefits. I don’t see that Ballmer’s boys need to make such a desperate play. Yet.

I’ve been wrong before and I’m sure I’ll be wrong again at some point. But just in case I’m right, remember you read it here first. If I’m not, blame my eyebrows.

Matthew JC. Powell can also wiggle his ears. Contact him on mjcp@optusnet.com.au

deal doubtful for giants mobility the