If Bill Gates was still doing business it would have already been done. Microsoft should take advantage of EBAY’s very low stock price to take sudden world leadership on:
1) Auctions
2) Payment Systems
3) VOIP
There is also a funny coincidence:
MSFT has 31.10 B$ cash and
EBAY has a market cap of 34.45 B$ and 3.35 B$ cash
So if MSFT wanted to buy EBAY cash it could do it to the dollar, because it would use its cash and EBay’s cash. Of course this is just fantasy, because Microsoft should pay a premium between 10% and 15%, but both companies produce such amounts of cash that even a few borrowed billions would be repaid really fast.
So MSFT could afford EBAY easily. But would antitrust have a problem with that? Not really. The problem with MSFT is that it dominated software industry. What EBAY sells is services, not software, so antitrust should not have to complain about the “Big Deal”.
I hope we agree that MSFT could buy EBAY, but why should the software giant do so?
1) Ebay is growing fast, much faster than Microsoft. The combined company would have a great growth rate.
2) Microsoft is chasing Google on investments in Internet technology. Buying Ebay, MSFT would take the lead in fields like Auctions, Payment Systems and VOIP where Google is trying to catch up, but can’t.
3) EBAY is a huge advertising spender; it is Google’s best customer. Shifting part of that flow of money toward MSN would help it grow bigger and stronger on behalf of GOOG and YAHOO
4) MSFT could mix its instant message system with Skype, making the combination of the two the most powerful and fastest growing communicating community in the world.
5) Paypal could be used as the main system to buy software online.
6) MSFT and EBAY are both companies with record of generating profits and cash forever. The combination of the two would be a growing money machine.
7) Eh Eh… Least but not last they should do the deal to make me and other proletarian EBAY stockowners happy with a juicy premium!
BUY, SELL, KEEP 
Leave a reply to retirein Cancel reply