D-Day + 2 ...at least they're talking about the deal now.

I woke-up this morning to find that the Microsoft and Yahoo! deal was in the news once again. Nothing new, really, to report, but at least they're talking about it. I found it simply strange that nothing was said on Sunday when so much was discussed coming-up on the Saturday deadline for Microsoft's offer to buyout Yahoo!

Today, I heard an interesting opinion on the deal. Could it be another AOL-Time Warner? Could it be another dot-com deal orchestrated by Wall Street with no real business sense? I said it was an interesting opinion, but not that I agree with it.

AOL was doomed to begin with. When Time Warner bought it, it was buying a dying entity. AOL's success was on making the Internet accessible. Could anyone possibly argue that the Internet still needs to be simplified today? Furthermore, could anyone argue that there are not a multitude of alternative service providers offering equally (or better) solutions to get Internet-newbies signing-on to the web? AOL was slow to adjust its business and Time Warner paid the price. I don't believe that this is the case when it comes to Yahoo!

Yahoo!'s business is display advertising. The only problem that it's having is converting its traffic into great revenues. Microsoft is already in the same business, but offers a broader reach and richer-content that helps to keep users clicking on its sites. I believe that there exist true synergies between these two companies. Put differently, Microsoft + Yahoo! is worth more than each is worth separately.

UPDATE: Microsoft, according to those 'close' to the ground, is now saying that it's likely to be a proxy fight that they'll announce later this week.