Yahoo! Deal's Biggest Hurdle: Government
Still, some argue that Microsoft could use its dominance in the PC business to gain a stronger hold of the Internet space.
Gary Reback, an attorney for Palo Alto, Calif.-based Carr & Ferrell, maintains that Microsoft is not simply looking at Yahoo!'s ad-based searches as the sole reason for merging companies, pointing to Yahoo!'s content as additional incentive.
"I don't think it's just about search," says Reback, noting that the combined entities would still have far less market share than Google has now. "That strikes me as very narrow-minded."
Trip Chowdhry, an analyst for Global Equities Research, points out that Microsoft owns 90% of the PC operating system platform, which most people use to get on the Internet."The desktop platform is the first entry point to any Internet platform, to get to Yahoo!, eBay (EBAY), Amazon (AMZN) and Google," Chowdhry says. "Now you mold the two, you're merging the PC platform with the Internet platform, and you have totally removed the choice. It is very serious." Chowdhry adds that users tend to have more loyalty to email and instant messaging, thus allowing Microsoft to further seal its dominance. Unlike most observers, Chowdhry believes the Microsoft-Yahoo! deal won't make it past U.S. government regulators. Most others believe the merger will ultimately pass -- even if the process stretches out for months. But Reback speculates that Microsoft will try to ram the deal through by the end of this year, while the Bush Administration, seen as a more lenient government in antitrust matters, is still in office.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV