The Wall Street Journal-20080202-Microsoft-s Bid for Yahoo- Deal Journal - Breaking Insight From WSJ-com

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Microsoft's Bid for Yahoo: Deal Journal / Breaking Insight From WSJ.com

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AOL-Time Warner Redux?

Microsoft Corp.'s $44.6 billion unsolicited bid for Yahoo Inc. has big-ticket numbers, globe-changing drama and an undercurrent of corporate violence. Unsolicited bids -- especially for people- intensive companies like Yahoo -- tend to scare away those human assets. There will be much carnage before this is over.

And what, exactly, could a combined Yahoo-Microsoft offer? Get braced for a parade of numbers, metrics and justifications.

Yet for all of Yahoo's failings, Microsoft has yet to prove that it can do any better. Its Internet businesses have had the feel of a rich kid trying to buy his way into the action.

There is some industrial logic to putting the two companies together. Technology-development costs could be scaled back. And marketing budgets could also be slashed.

Still, in a world where users -- not companies -- are continually innovating and upending the business world, creating an ever-larger bureaucracy doesn't seem like a guarantee of anything. For Yahoo shareholders, the message is clear: Take the money and run. The message is also clear for Microsoft shareholders: The onus remains on the company to sell, sell, sell its case.

This has the feel of AOL-Time Warner 2.0 until proven otherwise.

-- Dennis K. Berman