5 Tech Firms Which Could Merge With Or Buy Yahoo

Jerry Yang's decision to leave the company he created caused Yahoo's stock to rise by nearly 9 percent at the time of writing and paved the way for an acquisition or a potential merger.

As it stands, it is not a matter of if but when. And we have lined up five potential partners for the world's biggest internet property.

(1) The first obvious suitor is $175 billion gorilla, Microsoft, which expressed its interest in Yahoo since February 2008 and could be interested again in the second largest search engine under the sun. The departure of Yang means that a pro-acquisition CEO, close to Carl Icahn, could step in. Microsoft has the means and desire to get this merger up and running.

(2) The other huge conglomerate that could step in could be Time Warner Inc, valued at $30 billion. The two companies have been discussing business for quite some time with a potential AOL/Yahoo merger. However, history is heavily biased against AOL and Time Warner. Their $226 billion merger was a catastrophic one by all measures ending up costing the combined company more than 90 percent of its share prices. So, could two losers make a winner in this case?

(3) Murdoch-owned News Corp could also potentially join the race to grab a bite of Yahoo. Although valued at just under $30 billion, News Corporation could bring in Myspace and the rest of its online properties to form a giant capable not only of rivalling Microsoft and Google but also Bebo and Facebook. And with a Murdoch at its head, this would be a fearsome competitor.

(4) And what about Apple? Surely, a company worth $80 billion could buy a Yahoo, especially when you sit on a cash pot bigger than Microsoft's own. We've already discussed why it makes sense for Apple, a consumer-oriented company to buy Yahoo, another consumer oriented web company.

(5) Finally, could HP be willing to make the move? HP is known for bold and costly mergers (Compaq) and acquisitions (EDS). The company has also forged an alliance with Intel and Yahoo to promote cloud computing. And with excellent news about its latest quarterly earnings, the company could well take another bet in the forthcoming weeks.

As for reasons why HP would acquire Yahoo? We reckon that Yahoo is an opportunity that cannot be missed and HP could well be looking to diversify further into cloud computing and SaaS by leveraging the Yahoo brand. And they could merge Snapfish with Flickr... Now that's and idea.

Obviously, there could well be a mixed approach with News Corp and Microsoft for example snapping Yahoo and then ripping apart the carcass of the company.

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