Saturday mornings are not an ideal time for a big story to break within the Australian media. No television news, radio is on weekend leave except for the gallant ABC and the websites are waiting for their diet wire feeds to take care of the hard yards. However, you would think one of the biggest stories of the year would make some sort of appearance in the local media. Outside of few exemptions the local media has missed the story completely. The ABC picked it up somewhat and NineMSN (soon to be NineMSN-Yahoo7?).
Microsoft is set to buy out Yahoo two of the largest internet sites on earth with millions of Australians checking their e-mail, instant messages or finding content from these websites. The local angle to the story is even more compelling with both internet portals opting for partnerships with rival free to air television networks. Yahoo with Channel Seven and Microsoft’s MSN network linked with Channel Nine.
So a merger of the two different websites within Australia if the transaction goes ahead is set to be impossible without either of the networks being left out of having an effective web presence. It would leave them with Channel 10 in the Internet wilderness. However, the underlying framework of the key tools on the websites has to change inline with Microsoft grand plans for the portals if their takeover succeeds.
The rivalry between Seven and Nine is that of ledged, even though friendship can happen if it is in their mutual economic interest, for example keeping out the competition.
Or will Microsoft face a counter bidder. Few companies can match Microsoft’s force but some maybe be interested.
The formally Australian based company, would love an asset like Yahoo to add to it array of web business ranging from newspaper masterheads to MySpace. To top the Microsoft bid they almost have to bet the company AOL Time Warner style with a market cap of $60 billion US dollars at the moment, a merger is the only option left on its cards. They got MySpace on the cheap and the price would deter them. But that has never stopped the company before in challenging the boundaries.
News also has strong links with Google and for their content it may work better for them to stay on the sidelines and sell their space to the highest bidder than be owning the advertising network. Google is still number one and will be for a long time, News is not a company happy to be in second place.
Would allow the ABC television network to create the same linkages its rival NBC has made with the MSN website. However, like News Corporation they have to bet the company on it and News Corporation is much more likely to take a brave step like than Disney would ever be able to match.
A very unlikely wildcard but you never know these days. It is already on friendly terms with the Microsoft who has a joint stake in its website and cable television network MSNBC. For them this merger would be a real plus in getting their news onto the Yahoo portal. Though it the only other competitor with real financial clout to match Microsoft’s bidding power.
Microsoft’s upper hand will be the synergies it will be able to make, making it much more valuable to itself than anyone else. The only real hope for the other bidders if regulators take the monumental step to block the merger, which considering Microsoft dominance of the technology may not be such a crazy idea. There would be strong arguments for either case.