Should Microsoft buy Yahoo?

Steve Ballmer and Co. are reportedly weighing a multibillion-dollar bid for the troubled internet portal

(Image credit: Justin Sullivan/Getty Images)

Rumors are swirling in the tech world that Microsoft is considering bidding on Yahoo — perhaps with an as-yet-unidentified purchasing partner. The two tech giants have history. In 2008, Microsoft tried to acquire Yahoo for $47.5 billion, but had its bid rejected. The following year, the two inked a 10-year internet search partnership. Now, with Yahoo on the auction block for far less than what Microsoft once offered — Yahoo's current market value is $18 billion — should Microsoft make another move? Or would it be wise to avoid the troubled portal, whose temperamental board brutally fired CEO Carol Bartz just last month?

Microsoft should snap up this bargain: Microsoft "would be foolish" to not at least consider buying Yahoo, says David Callaway at MarketWatch. For all its troubles, Yahoo "is still a stunning group of Internet assets, with a massive reach of almost 700 million unique users." Plus, Microsoft needs to make some kind of bold move. It "can't just chug along forever, clutching its cash reserves while Apple, Facebook and Google steal all the limelight."

"Why Microsoft should bid for Yahoo"

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.


Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

And Microsoft can't afford to let someone else buy Yahoo: "Microhoo 2" would make sense, says Larry Dignan at ZD Net. The two companies "are already partners and know each other well from the [2009] search deal," which made Microsoft's Bing the search engine for all Yahoo sites. And Microsoft still really needs the traffic Yahoo provides; if another company were to acquire Yahoo, it could ruin the search partnership, and that's something Microsoft can't afford to lose.

"Microhoo 2? Microsoft reportedly eyes Yahoo bid"

Hold on. This is a risky deal: Sure, "if anyone has a reason to bid for Yahoo, it is Microsoft," says Martin Peers in The Wall Street Journal. But "that still doesn't make it a good idea." There's no guarantee that Microsoft could do any better than Yahoo's past leaders in getting the company back on track — "Microsoft has, at best, a mixed track record with online businesses." Steve Ballmer and Co. might be wiser to back a different buyer "with better prospects of fixing Yahoo" than Microsoft itself.

"Microsoft should be kingmaker, not bidder for Yahoo"

Continue reading for free

We hope you're enjoying The Week's refreshingly open-minded journalism.

Subscribed to The Week? Register your account with the same email as your subscription.