bayHoo! – The Merger of eBay and Yahoo!
Microsoft’s offer to purchase Yahoo! for $45B to overcome Google’s growing influence on the web is not going away soon. Microsoft will do every thing in its power to acquire Yahoo! because Microsoft is trailing far behind Google and Yahoo in search and ad revenue. Eliminating Yahoo! will kill one competitor instantly. What can Yahoo! do? It has the fiduciary responsibility to share holders that outweighs the desires to thwart the monopolistic ambitions of Microsoft. The solution lies in the merger of eBay and Yahoo!
The market capitalization of eBay and Yahoo! are almost the same. eBay has hordes of cash without any debt but eBay’s earning per share (EPS) is one-half of yahoo’s EPS. These two web-pioneering companies need each other to move forward for increasing investors’ confidence and returns on investment.
As a merged company how can they improve their combined performance? First, they can keep their independent brands that are widely known and very valuable by forming a parent company called bayHoo! An acquisition by Microsoft will lead to Yahoo!’s brand erosion. Microsft is hell-bent to acquire Yahoo! not to preserve Yahoo! brand. Microsoft does not like to have Yahoo! as a household name in the future.
Yahoo! properties attract the highest web traffic. eBay will leverage this traffic through out Yahoo! properties and charge premium fees to eBay sellers for advertising their listings. eBay does not have an integrated listing advertsing service right now. eBay sellers will get more exposure to their products and services.
The eBay store will merge with the Yahoo! store and bayHoo! will eliminate all duplicate costs involved in maintaining two different merchant solutions that may essentially offer the same services. bayHoo! will use this money to offer more features to bayHoo! store owners.
The generation Y grew up with The Yahoo! Messenger and it is in their every day vocabulary. bayYahoo! will integrate eBay’s Skype VoIP service for video chat in to Yahoo! Messenger and charge users for this service.
eBay’s PayPal is there for conducting all trqansactions. PayPal can leverage web’s most visited finacial site, Yahoo! Finance, to offer more services. With creative thinking, it is possible for bayHoo! to become a very successful online company.
It is the time for Jerry Wang and Pierre Omidyar start talking.
