The growing speculation that News Corp. (or some hedge funds) are putting together a bid for Yahoo!, may be something startups and venture capitalists should be enthusiastically rooting to happen.
Here’s why: If Yahoo does get acquired by Microsoft, it will likely eliminate one of the more active start-up buyers in the market. Think about all the entrepreneurs and VCs that Yahoo has made wealthy over the last few years – the list includes del.icio.us, MyBlogLog, Zimbra, Upcoming, Flickr, Blo.gs and Jumpcut. (Microsoft has also been active with a shopping list that has included aQuantive, TellMe, Jellyfish, Massive Inc. and MultiMap.)
If Yahoo is swallowed by Microsoft, it may mean fewer acquisitions than both are currently making by themselves. That would be bad news for the startup economy, particularly entrepreneurs whose business plans are entirely dependent on being acquired by the one of the Big Three (Microsoft, Google and Yahoo).
If, however, News Corp. or a hedge fund buys Yahoo then perhaps the vibrant startup M&A market continues to exist.
So, if you’re an entrepreneur or a VC with investments in startups, perhaps you better start cheering on News Corp. CEO Rupert Murdoch.