After Microsoft’s bid there have been alot of rumours surrounding potential rivals to Microsoft in attempting to purchase Yahoo! However, like with all rumours some make more sense than others.

Either way according to the WSJ ”Citigroup Global Markets analyst Mark Mahaney in a Friday research note estimated that Yahoo could boost its cash flow more than 25% annually by outsourcing all its search advertising to Google.” which would see a deal with Microsoft making sense due to the fact that if partnered with Microsoft, Yahoo! will have more leverage and won’t play second fiddle to Google as they would consistently need them to offer them the search advertising feed.

Here are the current rumours around for potential bidders and my opinions on their bids:

Apple

Apple are a $118 Billion company and have the market cap to make a deal happen. However since they haven’t bought a company since 2002 I doubt a deal will happen as I’m not convinced they’d be willing to fork out more then Microsoft’s current offer or even match the offer on the table. 

Dan Rosensweig

If you’ve never heard of him Dan left Yahoo! in late 2006 as the COO and has since joined Quadrangle Group. Dan has the motive to create the deal and has large amounts of money at his disposal to ensure the company can revitalise itself. However, the debt crisis has affected him as well as the other private equity firms so again a deal looks unlikely. 

eBay

Remember March 2000 when a Yahoo! acquisition of the eBay was killed moments before being publicly announced means we know these companies know each other well even if Yahoo! at the time was worth $70 Billion and eBay $20 Billion. In 2008, both are worth around the $40 Billion mark and eBay just has the market cap to enter a bid and remain the controlling entity. However, I doubt a deal with eBay - Yahoo! will happen as eBay are still in transition and have had their own problems with growth.

News Corp.

News Corp. was trying to scramble a rival bid on Friday but have since had the weekend to consider the options for the whole asset. The only way I can see them making a bid for Yahoo! is if Yahoo! was to be sold off in segments as News Corp would probably try to acquire a few of those.

Pure Private Equity

This is probably the most unrealistic offer of the lot considering the fact that they will probably be looking to try to acquire the company for a quick flip. However, they thought of market debt and other factors means that a deal of this nature is highly unlikely.

However, I’ve heard from a couple of sources something very interesting. Basically a plan is being created to sell off Yahoo’s media assets to NBC Universal (Basically all media assets excluding Video with the remaining aspects of the company which is its search and advertising assets would have a deal that would see it merge with Facebook. As a result, Facebook would become a public entity in the near future. However by breaking up Yahoo! it means that there is a non-tax-free deal meaning that its a less attractive offer to that of Microsoft’s.

In conclusion with the above rumours and my thoughts it seems that there will be a competitive offer launched by a rival bidder this week. However even if this does occur, I’m sure Microsoft will just increase their bid and ensure Yahoo becomes an operating subsidiary of Microsoft Corporation.

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