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Monday, February 25, 2008

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Alex Tolley

Why are these deals a good sign? What is Getty Images but a portfolio of copyrighted images, a business that is being undermined by Flickr content? Given the financing costs and premium paid, what can H&F do but try to goose licence fees - ie try to extract higher rents? Why is Yahoo a good deal for Microsoft - other than a last ditch attempt to chase Google? Others have commented on this deal - it is less about strategy and more about desperation in the web space. Electronic Arts bid for another game company is at best an economies of scale deal.

I don't see these deals as buying great assets on the cheap. Each has a different logic, but it is not clear that any of the acquirees has great fundamentals, nor the businesses they are in.

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