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What Else Could Microsoft Buy for $40 Billion?

Analysts and investors continue to be bearish about the prospect of Microsoft paying $40 billion-plus for Web giant Yahoo. The two companies are locked in a pricing standoff that's now lasted several weeks, but most analysts believe that Microsoft will ultimately prevail. One source says the Yahoo board is crazy not to accept the offer.

Investors and analysts say Microsoft would be better off buying a series of smaller companies whose services don't overlap. RBC Capital Markets analyst Robert Breza said: "It's possible to argue that without Yahoo and a blank check for $45 billion, Microsoft could make investments that would bring scale over time, and also more synergies beyond just advertising." Breza pointed out that B2B software provider, Web analytics company Omniture and Facebook would all cost less than Yahoo.

Others say there's no guarantee that a combined Microsoft-Yahoo would be better placed to compete with Google anyway, a concern that's reflected in Microsoft's share price, down around 15 percent (a market cap loss of $40 billion) since the Yahoo bid.

Read the whole story at New York Post »

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