Thursday, March 19, 2009

Microsoft Still After Yahoo; A Potential Special Situation Play

Told ya so!

Microsoft Corp. Chief Executive Steve Ballmer is still signaling an interest in a deal to buy part of Yahoo Inc.


Mr. Ballmer had to wait a decent interval after Ms. Bartz took over Yahoo to avoid any perception that a proposed deal would be a slight against Jerry Yang. IMHO once they sit down to negotiate, the final deal will be to buy all of Yahoo and not just the search business. Microsoft never ever ever walks away from a strategically necessary acquisition, and Yahoo is a much more affordable target now that its shares trade at around half of where they were a year ago.

Nota bene: Anthony J. Alfidi holds no position in MSFT or YHOO at this time.