Yahoo/eBay Merger Case Strengthened By Semel Departure

I believe all the turmoil around Yahoo! (YHOO) following CEO Terry Semel's resignation fortifies the case for a merger with eBay (EBAY), which I defended before.

Keep in mind that Google (GOOG) is the perennial enemy to both. Microsoft (MSFT) on the other hand is carefully treated as an equally beleaguered colleague, rather than as a competitor.

The recent animosities by no means endanger a Yahoo!/eBay merger:

Google was ready to invade eBay's Live event, which made eBay pull away from AdWords. Instead, eBay could be a bigger Yahoo! partner.

Google attacked Microsoft over Vista's desktop search. The case was settled.

Nor do the recent advances, quite to the contrary:

Yahoo!'s problems keep any merger speculation alive, particularly with Microsoft.

Now the Times of London reports that News Corp (NWS) floated the idea of swapping MySpace for a 30% Yahoo! stake. I believe the implied MySpace valuation must be too high for Yahoo!, which proved quite frugal when approaching Facebook. Also, I believe that Yahoo! needs to be a 'content neutral' aggregator, not a News Corp vehicle.

However, the eBay/MySpace talks are still ongoing.

Yahoo! has not responded to Ron Burkle's attempt to involve Yahoo! in a counter offer for Dow Jones, News Corp's much desired prey.

In other words, I think Yahoo! is carefully aiming for eBay. At the same time, News Corp must be kept at an arm's length.

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Wingo provides more detail on eHoo! here: ebaystrategies.blogs.com/ebay_strategies...