Micosoft (MSFT) may go slow in Yahoo! (YHOO) integration

Good news for Yahoo! (NASDAQ: YHOO) employees who thought they might lose their jobs if the proposed buyout by Microsoft (NASDAQ: MSFT) goes through. Microsoft believes that if it integrates the technologies of the two companies very quickly, consumers and advertisers could suffer. The FT writes:

"Technology companies, if they dive in and just smash things together for smashing them together's sake, it's reckless, it's just simply reckless," said Ray Ozzie, who took on the company's top software technology role from Bill Gates in 2006.

While the news may be good for Yahoo! engineers, it is probably bad for investors. Shareholders in the two companies have been hoping that an integration, especially one which would spread a common search technology over the Yahoo! and MSN sites, would quickly drive better revenue. A drawn-out combination might put those "synergies" off for several quarters, making the buyout a long-term play but not one with much earnings enhancement.

Microsoft's stock has already moved from $33 in late January to $27.87 as of Friday's close, at least partially because of the huge premium the company is offering for Yahoo!'s stock. Word of a very long integration process is not likely to help that.

Douglas A. McIntyre is an editor at 247wallst.com.