Merrill Lynch analyst Justin Post speculated about the appeal of Yahoo’s assets to Microsoft back in June, and he’s still persuaded, according to Barron’s Eric Savitz, that Microsoft could and should find Yahoo of compelling value.
I still don’t see it. Culturally, the two companies would go together like palm trees in the permafrost, and there simply are too many overlaps between Yahoo’s services and those Microsoft already offers with MSN and Windows Live. The integration of the two companies would be a nightmare, politically and otherwise.
By the time Microsoft sorted out the mess, Google would have lengthened and solidified its leads in search and advertising, and probably would have bolstered its YouTube-related dominance in online video.
Besides, as I’ve said before, Microsoft stands to derive better returns from its broadening forays into enterprise computing, where it can leverage its Windows and Exchange/Office assets more formidably, than it would if it continued attempting to fathom the capricious whims of a consumer market that it doesn’t seem to clearly understand.