Companies generally don’t comment on rumor or speculation—that’s the blogosphere/news media’s job. The speculation du jour, which seems very likely born of non-buyer’s remorse, is that Microsoft is eyeing—or should eye—an acquisition of eBay or, at least, PayPal and/or Skype.
eBay LogoOr not. But it wasn’t that long ago, when it was becoming abundantly clear Google was busting the search block, that analysts and investors started pushing Microsoft to make a bid for Yahoo just because it made a lot of sense. As soon as MS got its ducks in a row* with the Office update and the release of Vista, that’s pretty much what they did.
And we know how well that worked out: Microsoft’s still got its $44 billion and Yahoo has a few months worth of ‘splainin’ to do. Lots of questions remain about Microsoft’s next move, which could be another Yahoo bid once share prices sink below $20 again, or it could be, according to Stifel Nicolaus analyst Scott Devit, buying a stake in PayPal or Skype.
Driving the speculation are MSN’s cash back display ads popping up on eBay, where fixed-price items qualify for the program.
And that’s it, really. That’s what appears to be driving the speculation. But Devit’s not the only one tossing around theoretical good ideas. Berstein Research’s Jeffrey Lindsay takes another route, crediting a “Microsoft-like suitor” as a potential eBay acquirer, who would then spin off PayPal and/or Skype.
ZDNet Editor in Chief Larry Dignan doesn’t think that idea is so off base, and makes a case that an eBay buy would be a better deal for Microsoft than Yahoo, if Microsoft just had to spend some money. With a higher market cap, more revenue, better price to earnings ratio and a current share price of $28.50, Dignan might be right.
Given eBay sellers recent rows with the auction giant, new ownership could be welcomed. Stranger things have happened, including speculation Google is negotiating a buyout of Digg.com. Try and make sense of that one.
Microsoft appears to have abandoned any hopes of owning Yahoo, but with the right collective acquisition focus, the Beast of Redmond could grab a pretty good chunk of the online market without Yahoo. Buying Ask, for example, would add some more search share as Microsoft figures out its own brand; eBay would put them in charge of online auctions; and why not just go ahead and buy all of Facebook, just to round off their edges?
