Sure, it's fun to speculate that Internet titans Google, eBay, Microsoft, or Yahoo! could merge in some way. And maybe eBay and Yahoo! is the most likely of any of the possible combinations, as this article posits.
But I take all the talk about such mega-deals with a grain of salt. Here's why:
- Internet companies by nature are egocentric. Even if they aren't on top now, they all think they will be on top next week, or next month, with the latest release or new innovation. And I should know since I work at
- Wall Street loves to do deals. Investment bankers would make millions in fees off of a giant Internet combination. They often use reports -- such as the current one from JP Morgan referred to in the article -- to try to create momentum for their ideas. But just because bankers talk about how great a merger would be, doesn't mean that execs within the companies agree.
- Of course these companies all talk! As well as being competitors, they are also partners and in many cases execs are buddies (or at least like to act like they are). These guys love to know what everyone is up to. It's high sport for them. But just because they get together doesn't mean they have any intention of doing a deal.
- Finally, a word about the news media. The Wall Street Journal put these rumors in play about a month ago. You can bet every business news editor immediately started applying major heat on their reporters to advance the ball on the story (I'm a former Business Week reporter so I know well how this works). When I read between the lines of what's being reported now, I sense some scrambling to come up with something new line. And the JP Morgan report providing some decent fodder.
As I wrote in a blog post when the WSJ stories came out, so far I see a lot of speculation and not much substance.
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Reader Comments (Page 1 of 1)
5-24-2006 @ 3:53PM
Sheldon Liber said...
I agree that is not likely that the Internet Kings are interested in mergers at this very early stage of the game. I also agree that Ebay/Yahoo seems like it would have the most merit. It is much more likely that the mergers will be between USA & Chinese companies.
5-24-2006 @ 5:01PM
Dave said...
You all know MSFT hit about $28 a few months ago. Also Bill Gates owns the software market. If giants sway too far from what they do best, things go away. MSFT now at $23.50 is nothing to brag about or talk-up about another merger. I sold 1/2 of my MSFT today and now moving into some of the money making deals out there for any walk of life to buy.
I think Mr. Gates needs to get back to basics and grow more on what MSFT does best.