Print 5 comment(s) - last by omnicronx.. on Oct 18 at 1:18 PM

Mere mention of the possibility of renewed talks sends Yahoo stock price up 17%

Mention the name Yahoo today in the tech community and immediately thoughts of the failed talks of buyouts or partnerships with Microsoft jump to many minds. Yahoo held out for far more money than anyone outside of Yahoo management though the company was worth, ultimately leading to talks falling through.

Not only did talks between the two companies halt with Microsoft firmly stating that it had no interest in acquiring Yahoo, but Yahoo's stock price soon fell to the lowest point it has traded at in over five years. Recently Microsoft CEO Steve Ballmer said that a web search advertising deal with Yahoo still makes sense and may be possible.

The mere thought that talks between the software giant and Yahoo could be rekindled sent Yahoo stock prices surging by 17 percent reports Reuters. That gain was short lived and the price dropped back to a 12% gain after Microsoft released a statement saying it had no interest in buying the stock.

In February of 2008, Microsoft made an unsolicited offer to buy Yahoo outright for about $47 billion. Yahoo turned the offer down, asking for more money. Microsoft eventually bumped its offer up to around $33 per share, which Yahoo still turned down.

Reuters quoted Ballmer at a Gartner conference in Florida saying, "Perhaps there will continue to remain opportunities to partner around search. Ballmer continued saying, "We offered 33 bucks (per share) not too long ago and it's (Yahoo stock price) 11 and a half. So I don't know what price might have got the job done."

If Microsoft and Yahoo did return to the negotiating table, the deal would face new problems according to Reuters. Yahoo's stock price is severely depressed and the market for advertising in general is down thanks to reduced spending in the face of the slowing economy.

Cross Research analyst Richard Williams believes that Yahoo might not be the fit Microsoft needs now after reprioritizing its search efforts. Williams says, "The larger issue is strategic fit. Microsoft clearly has spent money and changed its focus to 'build' rather than 'buy'."

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I'm OK with Microsoft + Yahoo
By jodhas on 10/17/2008 12:00:30 PM , Rating: 2
Sometimes, the words not spoken are the best ones.
The Baldy needs to keep his mouth shut. Why doesn't he understand that lower Yahoo's share plummets, Msoft will be in better position to buy out the company.

Having said that, I wouldn't mind Microsoft purchasing Yahoo. It will create a better competition to 'keep Google honest'. While I don't forsee myself switching my search engine and there is nothing wrong with Google, you never know what will happen in the future. It doesn't hurt to have healthy competition. Competition lead to innovation and that is what made Google what it is today. Currently, Yahoo and Msoft run such a distant 2nd and 3rd in terms of search & ads, I don't foresee any of them really putting pressure on Google. So why don't they just combine forces to give a legitimate threat to Google.

So before you Googlers bash me out there, this is not a knock against Google but just a netizen wanting to see a healthy competition.

RE: I'm OK with Microsoft + Yahoo
By V3ctorPT on 10/17/2008 3:43:49 PM , Rating: 3
U are right... Baldy is stupid... it makes me miss Bill Gates... <3

By rippleyaliens on 10/18/2008 12:41:57 AM , Rating: 1
Actually Baldy is very smart...
Just the mention of this-- raises yahoo stocks.. then yahoo goes back down.. it shows how weak yahoo is in the big rehlm of things.
Makes Yahoo stock holders sweat bricks..

RE: I'm OK with Microsoft + Yahoo
By omnicronx on 10/18/2008 1:18:26 PM , Rating: 2
You do realize the stock jump started and ended in the same day.. as soon as Microsoft said they were not going to buy stock, the price plummeted.

Regarldess of what Balmer says, if Microsoft is publicly interested in Yahoo, Yahoos value will rise, there is nothing Balmer are anyone else at Microsoft can do about that. People want in, because Microsoft is going to offer more than its value, this is not really rocket science.

Stocks should go up
By homernoy on 10/17/2008 12:25:24 PM , Rating: 2
Yesterday tech stocks went higher amid rumours that there might be a Yahoo/Microsoft merger, even though MS denied it. I wonder what will happen today?

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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