Behind Microsoft-Yahoo: The Online Economics of Scale
Posted in: Miscellaneous at 31/07/2009 15:36
In their persuasion assault on Wednesday, Carol A. Bartz and Steven A. Ballmer repeatedly explained the Microsoft-Yahoo deal using a term from classical economics: "scale."
"What this deal is really about is scale," Ms. Bartz, the chief executive of Yahoo, said in the morning conference call with analysts and journalists, adding that advertisers, consumers and the two companies themselves would all benefit as a result.
Yahoo Got a Great Deal, Says Microsoft's Ballmer
Yahoo's stock price is down about 16 percent since it announced its deal Wednesday morning to turn over its Web search operations to Microsoft in exchange for an 88 percent cut of the advertising revenue.
A big reason for investors' disappointment is that Yahoo will get no upfront money from the deal, despite an earlier suggestion by the company's chief executive, Carol Bartz, that she would demand "boatloads" of cash from Microsoft.