Microhoo! Not Gonna Happen

The Wall Street Journal is reporting that Microsoft is interested in buying an equity stake in Yahoo as a way to counter Google. I highly doubt that this will happen.

Microsoft should invest in companies that could give it access to technology or services to help it catch up to Google, and Yahoo doesn't fit that description. Yahoo can offer traffic, but in the areas of advertising and search technology, MS is ahead of Yahoo. Maybe MS wants Yahoo to use MSN Search and AdCenter, but I can't see why Yahoo would want to become shackled to a competitor and not have options should something better come along.

Yahoo has many relationships with MS competitors (RIM to name one), and the company is in a strong financial position, so I don't see what's in it for them. I can just see Microsofties showing up at a board meeting trying to persuade Yahoo not to do deals that would be good for it and bad for them. Yahoo is on a good path, so no use in screwing with it.

It would make more sense if Microsoft acquired Yahoo outright and then streamlined their operations, but Microsoft doesn't have that kind of cash. So, nice rumor, but that's all it is.