Microsoft-Yahoo: Long term merger arbitrage?
Daniel Hung (July 29th, 2009) Writes:
The market (and internet) is buzzing with talk of the Yahoo!-Microsoft search deal. The deals are pretty simple and somewhat more beneficial than the deal which AOL signed with Google a few years back. Basically, Microsoft will power Yahoo’s search and Yahoo will become the ad platform across both search properties. Yahoo is granting Microsoft a 10-year license on its search technologies and transferring much of their search development team to Microsoft. What becomes of Microsoft AdCenter seems hazy, but without access to a legitimate search destination, it will likely be phased out as advertisers prefer to deal with ad networks that have broader reach.
Implications for Yahoo! Yahoo is finally embracing the fact that it is not a true tech firm or development shop. The Company started as a web directory when the internet was in its nascence. It’s only innovation was that prior to Yahoo, no one had
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