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Microsoft offers to buy Yahoo--again

In the world of Internet search there are three main players: Microsoft, Yahoo and Google. While Google excels, the other two members of the big three are seeing their market share drop and Yahoo is having serious financial woes.

According to MSNBC, Microsoft sees this as the perfect chance to buy the floundering Yahoo property and gain some ground on the 600-pound search gorilla Google. Microsoft made an offer to purchase Yahoo for $44.6 billion and according to some the purchase could be a boon for the entire technology market. The Microsoft offer raised Yahoo stock prices by 54%.

The Microsoft offer places a 62% premium on the Yahoo stock closing price from Tuesday and the 52 week high for Yahoo stock was $34.08 in October. MSNBC reports that Microsoft offered to buy Yahoo last year and CEO Ballmer sent a letter to the Yahoo board. The Yahoo board at the time declined the offer. Ballmer told MSNBC, “According to that letter, the principal reason for this view was the Yahoo board's confidence in the "potential upside" if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment.”

According to sources, shareholders of Yahoo could choose cash or stock in the form of Microsoft common shares. The total purchase of Yahoo would be made with 50% cash and 50% stock. Microsoft is reported to expect a $1 billion cost savings from the merger and says it will offer significant retention packages to key Yahoo employees, engineers and managers.

Yahoo is in the process of restructuring its online business and announced earlier this month that it would be making big changes to gain market share. Part of the big changes Yahoo made was to cut jobs in an effort to cut expenses.

DailyTech reported that rumors were circulating that Yahoo could potentially lay off as many as 2,000 workers -- a figure an insider denied saying the actual number of jobs likely to be lost was more in the hundreds. A few days after the company insider said job cuts in the hundreds, Yahoo cut 1,000 jobs and announced its profits had fell by 23%.



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RE: Merge
By FITCamaro on 2/1/2008 10:32:46 AM , Rating: 2
While I wouldn't mind the merger, I see the EU b*tching about this as well.


RE: Merge
By Griswold on 2/1/2008 11:46:41 AM , Rating: 1
When the distant third wants to buy the relatively distant second (as far as online advertising goes) and considering that this is not the core business of MS - which is software and that is why they have been under the microscope for so many years -, it is unlikely that any anti-trust laws will be violated or regulations should take place, whatsoever. It will be looked into, of course.

But it was clear that you would try to land a cheap shot despite your lack of understanding.


RE: Merge
By Eris23007 on 2/1/2008 2:31:52 PM , Rating: 4
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2...

quote:
Clayton Moran, an analyst with Stanford Group Co., said Microsoft should be prepared to pay even more to purchase Yahoo because it's the only way for Microsoft to reach its stated goal of owning 30 percent of the online search market.

"Microsoft also aims to be one of the top two Internet advertising companies," Moran wrote. "In our view, an acquisition of Yahoo appears to be the only way to achieve these goals."

Moran said an anti-trust review by the Department of Justice could run through the end of the year. He said Stanford Group is particularly concerned about European approval, given that the EU continues to delay the closing of Google's acquisition of online advertiser DoubleClick.


You might want to ACTUALLY READ SOME ARTICLES and GAIN SOME UNDERSTANDING YOURSELF before you accuse others of trying "to land a cheap shot despite [their] lack of understanding."


RE: Merge
By TomZ on 2/1/2008 3:20:37 PM , Rating: 1
quote:
considering that this is not the core business of MS - which is software

I agree with your conclusion - that anti-trust regulators probably won't any serious concerns about this acquisition - the fact is that Microsoft does actually have a pretty sizable market share already in online search and advertising. So in fact there is quite a bit of overlap of Microsoft's existing businesses.

But considering that the combination of Microsoft and Yahoo will still have less than half the share that Google has, regulators would be on shaky ground trying to oppose the acquisition.


RE: Merge
By napalmjack on 2/1/2008 3:24:35 PM , Rating: 2
How exactly is that a cheap shot?

BTW, a cheap shot would probably have something in it referring to the BSOD.


RE: Merge
By RogueLegend on 2/1/2008 3:23:36 PM , Rating: 2
So why do you make such a distinction between the EU and the US- the US has hit MS with fines for anti-competitive and monopolistic behavior? I'm just curious what the difference is? And in the US's case, we did it when they developed their own product (Internet Explorer) rather than buying out a company. I don't know about you, but bundling your own product is more benign behavior than purchasing another company. So is there some logic that I'm missing?


RE: Merge
By wordsworm on 2/2/2008 8:10:34 AM , Rating: 1
quote:
So is there some logic that I'm missing?


The core logic that you're missing is that it's European regulators taking steps against American companies. Most Americans don't appreciate that. Most figure that since America 'saved' Europe the last century that they don't have the right to control industries and company conduct. Many of them also believe that only America should set international laws.


"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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