EightBlack.

The industry titans have had a crack at this before.

But because the Google juggernaut over the past 12 months has shown no sign of slowing down, what choice did Ballmer and Semel have but to go back to the table with a different perspective.

Story broke via the New York Post and now this snapshot courtesy the Wall Street Journal.

The renewed talks are a sign of the continued growth in Google’s power and problems over the past year with in-house efforts at Yahoo and Microsoft to ride a boom in Internet advertising. Meanwhile, management changes at both companies could help pave the way for a pairing that a year ago couldn’t happen. The talks were first reported in the New York Post.

Microsoft and Yahoo couldn’t be reached for comment.

I love this saying from one of Tom Peter’s slide decks…

“When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former co-chairman of Goldman Sachs’ Investment Policy Committee, answered: I’m sure there are success stories out there, but at this moment I draw a blank.”

I agree. You dont get economies of scale by being bigger. This deal, to be successful, will require abundant thinking by both sides and I’m just not convinced they’ll be able to get it over the line.

Microsoft traditionally dont like big acquisitions and this one will require them to trump up with a boat load of cash - enough to even give them indigestion and its public knowledge that one of Yahoos founders, Jerry Yang, thinks Microsoft is about as appealing as a prostrate exam. Or something like that. Apparently, he doesn’t even use any of their applications.

If a deal just so happens to eventually get over the line, then good. It will make the space a lot more interesting. And it will push Google harder.

If it doesn’t, then Yahoo! should concentrate on doing what it does best. And that’s serving its communities.

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This entry was posted on Saturday, May 5th, 2007 at 1:04 am and is filed under Microsoft, Yahoo!. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.