Microsoft-Yahoo: It's On

OK, never mind payrolls. There's only one story this morning: Microsoft buying Yahoo - a deal which seems set to send not only Yahoo shares but the entire stock market north. Why would shares in automakers rally on a technology merger? It's not clear, but my feeling is that it has to do with what Microsoft infelicitously calls "a compelling value realization event". (Don DeLillo, call your editor!)

Yes, $31 per share is a whopping 62% premium to Yahoo's closing price on Thursday - pretty much the same as the premium Rupert Murdoch paid to acquire Dow Jones. But the difference in this case is volatility: Yahoo was trading above $31 a share as recently as November 6, less than three months ago.

I like the deal, if only because it might conceivably create a worthy competitor for Google. Google is a monopolist not because it goes around buying up companies like DoubleClick, but just because it's so much bigger and so much better than anybody else. If Microsoft can digest and internally incorporate the best parts of Yahoo - and that's a big if, of course, but really it's the only chance that both companies have got - then just maybe the world will start having a real choice in the search-and-online-advertising space.

It has to be said that the language in the Microsoft letter is not exactly the stuff of legend. It's not only the "compelling value realization event," there's also classic management-speak like this:

Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

Resources that drive innovation in emerging scenarios? But hey, Yahoo does exactly the same thing to the English language. The two are probably perfect for each other.