This morning, I wildly speculated made a very educated guess that Microsoft may begin to get cold feet over their Yahoo bid considering how desperately at least some executives at Yahoo want to find an alternative deal. This afternoon, confirmation from The Guardian that Microsoft is now beginning to consider alternatives – most notably, buying the remaining 98% of Facebook they didn’t acquire with their previous $240 million investment.
The Guardian isn’t citing any sources, but says that News Corp’s most recent maneuvering to potentially trade MySpace for a stake in Yahoo has Microsoft considering withdrawing its bid and instead “buying a number of Web 2.0 companies.” Previously, Microsoft CEO Steve Ballmer had indicated his M&A strategy was to buy 20 companies per year in the $50-1 billion range, and has held that course recently, acquiring Danger (manufacturers of the Sidekick mobile device) for a reported $500 million. A $45 billion acquisition of Yahoo would certainly put a dent in that budget.
Meanwhile, if that $45 billion were freed up for other acquisitions, Microsoft could go buck wild on M&A. You can probably count the number of Web companies that couldn’t be had for less than $1 billion on one hand, while signs of a slowing economy likely have a few more folks looking to sell than last year when things were sizzling.
As for Facebook, now that their financials have been leaked and most people (including Mashable readers according to yesterday’s poll) seem to think that they are significantly overvalued at $15 billion, they may be more willing to discuss an outright sale than in the past.