Experts chime in on aspects of Microsoft/Yahoo deal

Analysis of the deal and what it means for search, collaboration services and enterprise

Microsoft's US$44.6 billion offer to buy Yahoo has analyst tongues wagging, here is a sample of what they are saying:

The Deal

"Over the past year both Microsoft and Yahoo have lost share in the US search market, while Google increased its dominance of the market. Google's U.S. Internet search market share increases from 51.7% in fourth quarter 2006 to 58.4% during fourth quarter 2007, while Yahoo declined from 27.6% to 22.9%, and Microsoft's share fell from 10.4% to 9.8% according to comScore. Google is already well on its way to monopolizing the Internet search market, and a combination of Microsoft and Yahoo may be the only way to present a serious challenge to Google in the Internet search market."

--Allan Krans, Technology Business Research analyst

"The addition of Microsoft engineering capability into Yahoo should allow the combined entity to bring new products and services to market more quickly, something that Yahoo has notably struggled with. Meanwhile, the online engineering capabilities that Yahoo has will undoubtedly offer Microsoft the potential to bring new services to market, which counter-mines against the undermining efforts that Google is pushing forward."

--David Mitchell, Ovum senior vice president of IT research

"Perhaps this time government regulators ought to consider just saying no. Unlikely, perhaps - at least here in USA, Inc. - but it's difficult to understand what the concept of antitrust means anymore if the world's most powerful technology company is allowed to buy its No. 1 competitor's No. 1 competitor. ... While Yahoo stockholders will likely be popping champagne corks this morning, the rest of us ought to be taking a considerably more sober approach to the deal and its implications ... this just can't be good for competition, consumers or the Internet."

--Paul McNamara, Network World Buzzblog

"This is the single largest deal that Microsoft has ever done and although they are capable of funding this deal, this is still a big chunk even for Microsoft. ... At the end of (Microsoft's letter to the board of Yahoo) there is a phrase that basically states that they are prepared to make the deal hostile (meaning without board support) ... On the regulatory issue, they are confident this will be accepted. They will argue that Google is in such a dominant position in search that their combination will not consolidate market power. They will also argue that the Windows monopoly has made no difference in the creation of this market and they would be true to a point."

--Greg Royal, Network World blogger

"Microsoft and Yahoo make a powerful pair to compete with Google, whose search engine dominance is becoming increasingly 'evil.' Complaints abound as to exactly how Google ranks its search results -- and even how it ranks the placement of its keyword-sensitive ads. This merger, should it go through, will make it a lot more likely that the EU will give the OK to the Google/DoubleClick marriage.

--Network World's Micronet

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