The following post represents my personal opinion and not that of my prospective employer.

I have a stock portfolio which I check every day around noon (PST Time Zone), and that is the time which stocks are usually at their picks. I was surprisingly shocked seeing Yahoo! made a big jump from $29 to $33 a share. I am a big fan of Yahoo! and I had the opportunity to cheer up and celebrate the big jump, but the news that made the big move in Wall Street did not come appealing to me. The rumor was that Microsoft and Yahoo! are back in talks to merge.

The prospective merger has its own benefits and drawbacks. The one benefit which I could see is that Microsoft and Yahoo! may, and I am going to stick with ‘may’ here, join forces to become a giant competitor for Google, but it follows a series of problems. I think that if both companies merge, there is a bad sign for the market that they cannot compete with Google individually, and makes Google simply look unbeatable. The second drawback could come from the differences in each company’s corporate culture. Yahoo! is a fast paced creative company whereas Microsoft is a bureaucratic slow follower in products and services development. This means that merging the companies both together, may not result in a happy outcome as the insiders may feel the differences in two cultures resulting in lack of motivation and productivity. The second wow to the merger could be that Microsoft and Yahoo! have too much in common. They both offer services like email, messenger, maps, and search, thus the merger would be like which products to keep? They could keep both brands but, what is the merger deal then? And it would be waste of resources to keep two versions of services running. They have already jointed Yahoo! Messenger and Live Messenger together such that users can instant message in between two platforms, but I don’t think if this methodology is applicable for maps, and email. There is just too much overlap there.

However, I am proposing a resolution. Microsoft may offer Yahoo! $50 billion dollars for the merger, but I am thinking they should instead give up their MSN network to Yahoo!’s hands so that they can control their revenue making machine, and I believe that with the new Panama platform that is doable. The rest of the resolution remains on how they are going to split the revenue.

After all, what both companies should think about is that how they can attract users to use their search engine service. Lots of the problem is that not too many users use MSN for search, and proposing a merger cannot be a definite solution.