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Potential suitors throw Yahoo! to the wolf

Forrester eats its research

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Yahoo! can marry Microsoft or remain an old maid with a less than rosy financial outlook. Those are the options. And we're being kind including one of them.

In the wake of Microsoft's $44.6bn bid for the struggling web giant, many asked whether other mega corporations might jump in with their own bids. In fact, the issue was raised during the conference call where Steve Ballmer and company discussed their jaw-dropping offer with industry analysts, and even Microsoft general counsel Brad Smith said "Obviously, any number of companies might have an interest."

But just days later, most of the potential suitors have fallen by the wayside. Yesterday, during his company's latest earnings call, News Corp. chairman and chief executive Rupert Murdoch said he was uninterested in Yahoo!, and The San Francisco Chronicle reports that media giants Comcast and NBC Universal have said eh-eh as well.

Well, there's one corporate behemoth who's at least interested in partnering with Yahoo! in an effort to fend off a Microsoft takeover. But that corporate behemoth is Google.

"As I said, any number of companies might take an interest," Brad Smith continued during that Microsoft call. "I think there's really one company that cannot. That's Google itself. Given that Google has roughly a 75 per cent market share worldwide for online paid search they are not in a position to do this. Given its super dominant market share, Google is clearly prevented by the antitrust laws from buying Yahoo! or buying this business from Yahoo!"

For once, we agree with Mr. Smith. And we'd go even farther to say that even a Yahoo!-Google partnership would ring those anti-trust alarms.

The fact of the matter is that Microsoft is the only company with the dough and the inclination to acquire the Yahooligans. Jerry Yang's only other option is to keep Yahoo! an independent company, and that's a long shot at best, considering the deal Steve Ballmer has waved at Yahoo! shareholders. As The Wall Street Journal reports, Yang's best - and perhaps only - option is "to play hard to get," hoping for a few extra billion. ®

Bootnote

On his blog Rough Type, tech-minded author, speaker, and friend of The Reg Nicholas Carr says that he opened up his email client to find a note trumpeting the latest reports from Forrester Research. One of these reports - issued on January 31, a day before Microsoft announced its bid for Yahoo! - was called "Microsoft Will Make Small Acquisitions: Its Size, Visibility To Antitrust Bodies, And Strategy Rule Out Big Deals."

Analysts? Gotta love them.

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