Despite the fact that Microsoft (NSDQ: MSFT) has withdrawn its offer to buy Yahoo (NSDQ: YHOO), the M&A machinery on all sides is still in full gear, and expect tons of activity in the next couple of months. The $50 billion or so that Microsoft was willing to spend is the money that's still around, at least on paper. So who will Microsoft buy to make that leap it so hoped for? Steve Ballmer hinted the readiness in his letter to Jerry Yang: "We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners."
Some possible combinations:
-- One would have to believe that Facebook will be back in play. Microsoft is already the advertising provider for the social networking service, and also owns a small part in it. This would give it a strong toe-hold in the social media space and help it experiment more with new advertising models, among other things.
-- Then, to block and isolate Yahoo further, AOL's (NYSE: TWX) buyout would be a
I believe Microsoft will make another attempt at a hostile takeover after Yahoo shares take a beating this week and get swamped with potential lawsuits from shareholders. Microsoft does not need a social network, they need a company that can help them create mass on the internet. An AOL purchase could be a possibility.