Microsoft is trying to buy Yahoo – or, as El Reg puts it in inimitable form, Microsoft! bids! $44.6bn! for! Yahoo!
That’s … surprising. With the huge credit crunch at the moment, the conventional wisdom was that mergers and acquisitions activity would be negligible, particularly at the monster scale. Of course, Microsoft has a huge cash pile. But it was never $44.6bn huge at its peak, and it must be a lot less than that by now.
It always bothers me when the normal run of economics don’t seem to apply to high tech companies. They’re different, for sure – for short or even medium periods you can see growth rates that you just can’t see in most other industries. But you can also go from massive to bust much faster too. I don’t think it’s possible to defy financial gravity entirely. So I’m getting that “but but but” feeling that I had round the dot-com bubble.
That time I didn’t have the courage of my convictions. I imagined that all these bright people saying that the usual rules didn’t apply were right. But they were wrong. So this time I’ll be a bit more forthright with a prediction: no good will come of this for Microsoft. Yahoo shareholders would be mad to say no.
(Worth noting in passing that this would entail Microsoft owning del.icio.us, since Yahoo bought it at the end of 2005. I think del.icio.us’ traditional userbase might find that … interesting.)