Blogger Scot Wingo from eBay Strategies reports that Yahoo is bidding against Microsoft for online auctioneer eBay. Yahoo, apparently, is the favorite to win with a bid of $40-$41 per
share.
eBay shareholders would end up owning most of a combined Yahoo-eBay (eBay has a bigger market cap than Yahoo). Moreover, Yahoo's misfiring management team might not do any
better running eBay than eBay's own management team. Valleywag's Owen Thomas sees this as a move of last resort for Yahoo, saying the company's shareholders "would be foolish to sign onto a highly
dilutive deal unless they see absolutely no future for the stand-alone company."
Microsoft is too big and spread too thin for its Internet business to be considered anything
more than a sideshow, which is why a move for eBay would be a "disaster." Adding the online auctioneer can't take away from the fact that all of Microsoft's profits come from Windows and Office, which
means the Web business will always play "second fiddle" to software.
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