DanLin.net

OK, I have been following this as close as everyone else here. Most people fundamentally don’t like the idea of Yahoo as a Microsoft company including myself. But financially it does make sense for Microsoft as they would finally hold the top honors in at least one if not two online services. MSN Messenger and Yahoo messenger would reign supreme over AIM and GTalk. The combined user base of Hotmail and Yahoo mail would pretty much give Microsoft access to every person who uses the Internet.

The most interested play is what would happen to search. Google has held the top honors for well over 5 years and uses their search as the center piece of their Don’t-be-evil empire. By combining MSN search and Yahoo search, they would shake up the search world but still come in at a distant, but closer second. Maybe Microsoft will have what it takes to kick Yahoo into gear and finally wake them up from their Terry Semel-induced slumber. As much as you’d like to hate Ballmer and company, they have been at the software game a lot longer than Semel and Yang combined. With the talent inside Yahoo and the management abilities from Microsoft, they can really give Google a run for their money. It seems to be a classic ‘whole is greater than the sum of the parts’ situation.

As of Monday Yahoo has rejected the $44 Billion offer. The valuation is pretty much built into the YHOO price at around $30 a share. If Microsoft counters with a higher offer the stock should see another boost north. If Microsoft takes the offer off of the table it would certainly send YHOO in a short term free fall. You’ve got to have a pretty good stomach if you are willing to wager in this game right now. Some say Yahoo is against the ropes and should have taken the offer as it stands as they don’t have other offers to leverage. However I think that Microsoft also has no other alternatives when it comes to an acquisition target. Neither AOL or IAC have resource that go as deep as Yahoo nor will they necessarily be open to being acquired. Microsoft will need to acquire both if not more companies to even get close to the kinds of valuable assets hidden within Yahoo.

In a parallel universe somewhere outside of this Galaxy, Yahoo has rejected the Microsoft offer and built itself back up as the Internet giant it once was on its own. Here on our planet, I think the writing is on the wall. The wall of a Yahoo company bathroom. It says, “For a good time , call Bill Steve at 1-800-MICROSOFT”.

Click here to read about the photo from above. Reported also at Valleywag.