Analysts welcome collapse of Microsoft-Yahoo

The collapse of the planned Microsoft takeover of Yahoo is good for both companies, according to analysts.

Microsoft withdrew its takeover offer for Yahoo at the weekend after the internet firm continued to hold out for a higher offer.

Microsoft refused to up its bid and has also shelved plans for a hostile takeover of Yahoo, something it had threatened if its offer was refused.

George Colony, CEO of analyst Forrester, said, "It's good for Microsoft that it didn't buy Yahoo: now it has to reform itself. Yahoo and Microsoft would have been a disaster as the best and the brightest from Yahoo would have gone to Google.

"The culture clash would have been destructive and would have put Microsoft back in the sights of the regulators. And Yahoo wouldn't have helped Microsoft with its biggest task at hand, which is adapting to the emerging internet software model."

Forrester analyst Charlene Li said, "With the Microsoft acquisition threat fading, Yahoo has been given a reprieve, but it must explain and execute on a strategy that supports its belief that the company is worth more.

"Otherwise it faces another round of acquisition attempts and shareholder revolt. Yahoo's web strategy is sound but it has been muddled due to poor communication and tactical steps."

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