For weeks we have been hearing rhetoric from both sides of the Microsoft bid for Yahoo played out in the press and I'm getting a little bored with it. TechCrunch ran an article yesterday that covered this really well (Here) and predicted that the deal would consummate in a couple of weeks with a $1 or $2 per share price increase.
My question is why?
If you're Microsoft all you've done is hurt your market cap and you get another property that you have to integrate into you own. There are lots of complimentary services which is where everyone sees the opportunity. The assumption is that you can maintain the market share of each service but reduce the cost of supporting both creating a net win.
I think that logic is flawed. The cost of restructuring and the golden parachutes of ex-Yahooers aside, you have to recognize how people use the web. I think that if they are lucky they will retain 80% of each services pageviews (where duplication exists) because the transition process will be slow (its Microsoft and Yahoo after all) and the lack of new ideas, service issues and malaise will create opportunities for competitors to gain market share. Neither company has a real Social Web strategy and the deal will likely only delay Microsoft in getting one.
For Yahoo I think they end up with some reasonable shareholder value and there aren't enough smart, risk loving people over there to figure this out on their own, but I feel the only play for them (if they don't sell) is leverage the network and completely shift to a Social Web experience.
Not that they'll listen to me :)