Friday, April 18, 2008

Yahoo's Best 'Alternative': Merge with eBay

With Steve Ballmer's "three weeks or we're going hostile" deadline rapidly approaching, time is running out for Tech Ticker's parent to find a legitimate alternative to Microsoft's unsolicited embrace. The Wall Street Journal reports that Yahoo's "limited test" of outsourcing search to Google is going so well, the companies are discussing a full partnership.

Such a move -- or even discussion -- might face regulatory scrutiny, but could prove to be a "brilliant 11th-hour countermove by Yahoo [that] will force Microsoft to pay more for Yahoo than it otherwise would have," writes Henry Blodget.

But there's another alternative for Yahoo that, while often rumored in the past, hasn't come up much during the current saga: Merge with eBay.

James Altucher, managing director of Formula Capital, believes Microsoft will ultimately get its way, albeit by raising the cash portion of its bid. But the author and columnist also believes a Yahoo-eBay combination would be a true win-win for both companies. Yahoo's China properties would be key to the deal, and a combination with eBay is something Alibaba might view more favorably than the Microsoft tie-up, Altucher says.


finance.yahoo.com

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