Is "MicroHoo" actually going to happen at last? Rumor has it that Microsoft is back in the hunt to acquire Yahoo, according to a report published by Business Insider on Friday.
The site quotes an unnamed source affiliated with Microsoft's MSN portal as saying "definitely, people are talking about" a deal for struggling Yahoo, which dumped Carol Bartz as chief executive earlier this month and held off a takeover bid by the software giant in 2008.
Yahoo is "more attractive to Microsoft than AOL," according to Business Insider's source, an opinion apparently helped along by the insight of former AOL executive Ted Cahall, who joined Microsoft as a corporate vice president in charge of MSN in August 2010.
AOL's recent travails have included a fractious battle over the role of Michael Arrington at TechCrunch, the profitable tech news site he founded and which was acquired by AOL in 2010 for $25 million. Arrington's founding of a venture capital fund raised conflict-of-interest questions and brought him into conflict with Arianna Huffington, president and editor in chief of AOL's Huffington Post Media Group.
Arrington has left the employ of AOL, leaving TechCrunch without its strongest voice and core personality, according to some critics of AOL's handling of the situation.
"People generally expect AOL to come apart one way or another," Business Insider quoted the source as saying. "I don't think that's an interesting asset. It's just been so beaten down.
"Yahoo is a lot more interesting. If it comes into play, then at least their U.S. media business is a pretty interesting asset. It's complicated because of those Asian assets."
Though Microsoft has focused on developing its Bing property in the years since it was rebuffed in the Yahoo acquisition bid, the company has recently come to believe that "MSN is a critical component of helping Bing win," according to the source.
But it wasn't entirely clear how exactly Microsoft supposedly believed Yahoo could help MSN and Bing, even if it was "a pretty interesting asset." The Business Insider source seemed as eager to tear Yahoo down as build it up.
"It's not every day that you watch both of your competitors blow themselves up," the source said, referring to Yahoo and AOL. "It's like watching a train wreck.
"The portal space is challenged. Facebook is just absorbing more and more minutes-usage. That's having an effect on portals. The time shifting toward mobile is another factor weighing on portals. The problems AOL and Yahoo have are exacerbated by management."
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