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Yahoo: Bill Gates says Microsoft deal “unlikely”

By Neil Robinson on | From blog.lanzen.co.uk

Bill thinks Microsoft will not win Yahoo deal On his last day at Microsoft, Bill Gates admitted he felt it very unlikely that Microsoft would acquire Yahoo.

Although Steve Balmer is leading the Yahoo talks, the retiring head would have been closely involved. NBC network’s Tom Brokaw asked him if Yahoo would be part of Microsoft in a year from now.

Gates replied “No, I don’t think so. But there are plenty of decisions ahead that Steve [Ballmer] will get to make about what he invests in, R&D, and what kind of deals he does. I don’t think that [the Yahoo deal] is likely.”

Microsoft now looking elsewhere to gain Internet search expertise?

On Tuesday, 2nd July, following the previous Friday’s Bill Gates TV interview where he dropped the Yahoo bombshell, Microsoft announced that it would buy the fledgling Internet search company Powerset Inc for an undisclosed sum.

San Francisco-based Powerset has it own “semantic search” technology designed put searches into an ordered context to make the result more relevant. Powerset is the latest in a number of recent Microsoft acquisitions in this space.

Wall Street’s heavy hitter’s reputation takes a knock?

If the deal is dead as this suggests, it will be a major embarrassment for corporate raider Carl Icahn, who had been building up a stake in Yahoo to force a proxy contest that he hoped would unseat the Yahoo management board and pave the way for Microsoft’s unobstructed takeover.

Could it be that Icahn, who admitted that he doesn’t even own a computer, is a little out of his quite considerable depth when it comes to understanding Internet companies?

Like the majority of his suited Wall Street colleagues, maybe he’s more at home with conventional, tangible balance sheets than measuring the potential of the virtual world.

Yahoo had tried to protect itself by creating a generous severance package for key personnel that would have made any Microsoft deal extremely expensive to administer.

Yahoo has also been involved in several re-positioning manoeuvres, one involving a Google search deal, some of which has seen the departure of Yahoo leading lights. This has unsettled the market and adversely affected Yahoo’s share price.

Yet despite Yahoo’s lower value, there’s been little progress of late towards an agreement with Microsoft. Now, on his final day, Bill Gates has indicated clearly what he feels about the deal. Can we lay this one to rest now?

Well, let’s all hope so…