Take an industry that's worried about future demand (technology). Add in a bunch of geeks drunk in Las Vegas (CES). And what do you get? More merger rumors than you can handle--and most of them include Microsoft buying a company.
On Thursday, Microsoft is reportedly buying most of the technology sector--or at least pondering it. First, Microsoft is allegedly aiming to buy Logitech, the mouse and keyboard maker. With the deal Microsoft would dive more into hardware in a move that could come in handy if you're trying to get more design chops and improve profits at your consumer electronics forays. Lump Logitech in with the Xbox and Zune units and poof you have a business that looks decent.
Meanwhile, the New York Post is reporting that Microsoft is sniffing around Yahoo (again)--debating the prospects of going public with a bid. Cowen & Co. analyst Jim Friedman puts the chances of Microsoft buying Yahoo at 25 percent or less.
So what's really going on? It's the Warren Buffett treatment. If you follow the financial stocks you know the following: Every time a company hits the skids--Countrywide, MBIA or any other down on its luck mortgage insurer--Buffett is rumored to save the day. These rumors never pan out because Buffett isn't into catching falling knives.
Apply this Buffett thing to the tech industry and you get Microsoft rumors galore--not that Yahoo and Logitech are in peril like the financial companies rumored to be acquisition targets.
But there are similarities between Microsoft and Buffett. Both have more money than God. And they will make acquisitions. Microsoft swooped in to buy FAST just this week. If things get ugly in the tech industry guess who will be rumored to buy most of it? Yup. Microsoft. And Google. And maybe even Apple. Any company with a few billion lying around will be rumor fodder.