Microsoft-Yahoo

There is good coverage of Microsoft’s $44.6 billion takeover bid on the techcrunch and (obviously) Yahoo! News.

As an employee, I cannot comment on any of these developments. I can however point you to fellow Yahoo! Jeremy Zawodny who outlines what the possible outcomes seem to be:

1. Microsoft actually does buy Yahoo for $31/share (or something in that ballpark). This is the default case in the minds of many people.

2. Another large company (or group of companies, possibly including private equity funds) makes a counter offer. This will ultimately only serve to drive the price up. Microsoft will outbid.

3. The Yahoo Board of Directors decides to outsource Yahoo’s search advertising (and possibly search) business to rival Google. This entails a long-term partnership for a number of years and is sufficient to send Microsoft back to Redmond to continue working on its own search and search advertising business. I imagine this would be a very tough call to make.

4. As a variation of #3, Yahoo may look to strengthen its display advertising (graphical ads) business and take some significant share of the DoubeClick acquisition as part of the deal. That makes Google the dominant contextual tetx advertising company and Yahoo the dominant display/banner and behavioral advertising company.

5. The board simply rejects the offer and decides to continue as is. This seems quite unlikely to me. Shareholders will insist that something big happen.