CNET and Reuters have just reported that a Merrill Lynch analyst has written a report suggesting that Microsoft should part with a ton of its $34bn stock pile and save itself from online humiliation by buying Yahoo or Ebay?!
Will they? Probably. The new team led by Ballmer and Ozzie know that to lose the Internet war to Google or an independent Yahoo would be strategically disastrous as well as likely to hamper their ability to grow for a considerable time.
And without Gates there to shield them day to day investors may well put untold pressure on the team to make bold moves - unless they just want higher dividends and stock repurchases.
But if they also want capital growth and a rising share price they will have to buy their way into it. Either Yahoo or Ebay could make a good strategic fit. Mind you they will have to seriously pay up to convince the Internet leaders shareholders, for Microsoft stock ain't the currency it used to be!