Broadband Developments

Yahoo shares jumped nearly 6 percent based on news that Microsoft may be looking for partners and make another bid on Yahoo’s search business. One of the interesting details emerged that Yahoo was willing to sell itself all in one piece. Time Warner and News Corp are mentioned in the reported arrangement. Yes, that is the same News Corp that Yahoo looked to as a white knight suitor when the initial takeover fell apart. Any arrangement with Time Warner or News Corp will likely break out the content portal portion of Yahoo, while Microsoft retains the search portion. Details on the background to previous attempts at a deal are in the Wall Street Journal story.

If Ballmer comes back to the table, expect that whatever he comes up with will go through. Microsoft in Ballmer’s control won’t be made to look stupid or lack the will to do this twice. Microsoft will execute a deal that suits them absolutely whether it involves a complete takeover or breaking out the search business.

Additionally news of a Justice Department review of the Google-Yahoo deal will certainly add some pressures for Yahoo’s side. The civil investigation will look at whether the deal restricts competition in the market.

For Microsoft, this deal would translate into an additional respectable presence online in addition to their desktop and office dominance. In the big picture, creating this traffic portal plays a big part in Microsoft’s cloud computing ambitions. Forget all the side stories and stock value ramifications, focus on the Google component to get an idea of where this is all really going..