Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO)

An interesting piece in today’s Wall Street Journal looks [subscription required] at Yahoo!’s (NASDAQ: YHOO) history of very bad acquisitions: Geocities, Broadcast.com, Inktomi, and Overture.

And then there’s this beauty: Yahoo! could have acquired Google (NASDAQ: GOOG) for just $3 billion back in 2001. Oops.

So investors have good reason to question Yahoo!’s insistence that Microsoft’s (NASDAQ: MSFT) offer is too low: What does Yahoo! know about acquisitions in the first place? And if they’re such experts on what companies are worth, why have they made so many big mistakes?

But perhaps Microsoft should take a look at the Journal piece too. Yahoo! essentially threw away billions of dollars on internet companies that it thought had competitive advantages but didn’t. Is Microsoft doing the same thing with its bid for Yahoo!? The reaction of traders to the original offer which sent Microsoft shares plunging indicates considerable skepticism about how well the combined entity would do.

This is starting to look like a case of a reluctant bride insisting on a bigger diamond while the groom’s parents tell him he’s too good for her anyway.

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This entry was posted on Thursday, February 14th, 2008 at 6:16 pm and is filed under Latest News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.