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Microsoft’s New Deal Targets Yahoo’s “Milk” – Will it Go Sour?

"Microsoft is trying to get the milk without buying the cow…"

That’s a quote from a Reuters source on news that Microsoft is going back to the negotiating table with Yahoo, not to buy the entire company, but instead just a small slice of it.

In its official statement, Microsoft says…

…Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo! Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties…

The common consensus has Microsoft buying–or at least partnering with–Yahoo’s search engine business only. Perhaps to beef up its own search offering, or perhaps simply to block a deal with Google.

Whatever the reason, I don’t see how this is getting "the milk without buying the cow." The milk isn’t Yahoo’s search business, it’s the company’s brand.

Sure, it would expand Microsoft’s search audience, if it could somehow become Yahoo’s official search engine partner, but where would that put the two companies? It would leave them with the same declining search audience–just chopped up differently.

The "milk" is Yahoo’s solid brand on the web. Yahoo is cool, Yahoo is trendy, Yahoo is the brand that Microsoft wished it could evolve "Live" into. Yahoo needs Microsoft’s determination and deep pockets. Microsoft needs the positive sentiment that’s cemented to Yahoo’s brand.

Any other "partnership" is just slapping lipstick on a couple of pigs cows.

  • http://www.jaankanellis.com Jaan Kanellis

    “Any other “partnership” is just slapping lipstick on a couple of pigs cows.”

    Exactly and well said.

    Jaan Kanellis’s last blog post..Can You Manage Your Email and RSS Reader?

  • http://www.sitevisibility.co.uk Eloi

    I agree that MSN are buying into the brand more than the actual business – that’s why they should have accepted.
    But saying that Yahoo is cool and trendy is a bit much!Maybe it’s just cuz I am in the UK where it’s got such a smaller share than in the US…

  • http://www.seoresults.co.za Web Marketing Man

    Have to concur with this statement. It does seem that the MicroHoo saga is far from finished, and that Microsoft definitely wants in on Yahoo’s action. Maybe the looming facebook merger will tie these loose ends together, with Yahoo being able to trawl the data in the walled community that is facebook, with Google being excluded. Aiming at the hugely popular and growing social segment is definitely key here.

  • http://www.futurefactory-software.com Musashi

    I dont like Microsoft much but for me it would be really a bad day, when Google and Yahoo go together. Google is just too big in the Search and Advertising market. Microsoft and Yahoo could together try to match Google and put up an interesting fight.