Kara Swisher

Recent Posts by Kara Swisher

Yahoo-Microsoft Rumors–Sorry Folks!

I guess someday Microsoft will finally get around to buying Yahoo–as it has been doing, based on various reports, for the last few years now (talk about due diligence!).

microsoftYahoo

But not today.

That has not stopped the speculation from flying all over the place–mostly due, I think, to the fact that no one can exactly figure out what either party is going to do to get its game on again in the Web space.

Thus, a merger! Of course!

Of course not, of course.

But that did not stop the latest rumor–floated by that professional rumor-floater Henry Blodget on his Silicon Alley Insider blog last week just as we entered into the news doldrums of Thanksgiving–from raising the shares of Yahoo for a bit.

Blodget posited in his post on the recent–and, let me say, borderline kooky–rumblings from a spate of Microsoft execs, led by borderline-kooky-rumbler-in-chief Steve Ballmer, about various Web companies.

(Often, for wont of an Internet strategy of its own, Microsoft higher-ups can often be found pooh-poohing others’ efforts or important online trends Microsoft missed completely.)

You will recall, of course, it was Ballmer who insulted Facebook (see my post here) just weeks before handing over a huge sack of investment dough to the hot social network.

Of course, Microsoft execs, like Ballmer as well as ad head Kevin Johnson, have also been saying their goal was to be in the top two spots in the online ad space for a while now.

Johnson, for example, recently said that the company wanted to triple its search share to 30% and jack up its small 6% online ad share to 40%.

It’s nice to have dreams!

And since No. 1 is currently occupied by the heretofore unassailable Google, it’s an open secret that Microsoft covets the market share of No. 2 Yahoo.

It’s also no secret that Yahoo and Microsoft have been talking for a long time now about a variety of ways they could partner, especially since Yahoo was once Microsoft’s principal ad partner, to take on the Google juggernaut.

A few years ago, for example, former Yahoo CEO Terry Semel journeyed to see Ballmer at Microsoft’s HQ in Redmond, Wash., to talk about ways to join forces, given Yahoo’s eroding second spot and Microsoft’s distant No. 3 position.

Ballmer reportedly saw this play by Semel as a weakness on Yahoo’s part instead of an opportunity and it never happened. But it’s clear that the only way for Microsoft to get to No. 2 is to buy its way there.

Hence Yahoo.

“Buying Yahoo would give Microsoft 30% search share instantly. It would also boost Microsoft’s ad share close to that 40% goal,” wrote Blodget.

Smartly, Blodget floats the rumor and then slaps it down, noting correctly that “a Microsoft acquisition of Yahoo would be disastrous for Yahoo.”

He’s right about that, of course, because it would only suck Yahoo into a nightmare of merger distraction the already distracted company does not need, rather than giving it more heft to battle Google in the ad space.

In addition, for all its troubles (and we have noted those here many times), Yahoo’s current CEO Jerry Yang has a real chance, if he employs a little more boldness, to revive the company and whip it into better shape than it has been in of late.

And, if that does not work, Yang still can sell it off later.

Blodget does note that if Microsoft made a lightning-fast, cash-rich Rupert-Murdoch-takes-Dow-Jones (owner of this site!) offer on Yahoo, it could all be done quickly.

But not, as I said, today.

Please see this disclosure related to me and Google.


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I’m a giant vat of creative juices.

— David Pogue on why he’s joining Yahoo