Microsoft (MSFT) May Take Another Run At Yahoo! (YHOO), This One To Be Successful

If at first you don’t succeed, try, try again.

Microsoft (MSFT) is lining up partners to buy Yahoo! (YHOO) and this time it is very likely to get what it wants. Yahoo!’s shares dropped below $20 yesterday,  weeks after Redmond offered as much as $33 for the company.

Steve Ballmer does not want all of Yahoo!, just the pieces that are useful to him. He is trying to find a partner like News Corp (NWS) to take the remainder.

Microsoft needs the search part of Yahoo!’s business, which has about 20% of the US market, to Redmond’s 10%. Google (GOOG) is the leader with a 60% share.

Microsoft does not want the content portal business, which might be a good match with News Corp’s MySpace or Time Warner’s (TWX) AOL.

With Yahoo! back to the price where it traded before the Microsoft offer, a new bid is likely to work, one way or another.

Douglas A. McIntyre