Yahoo Chairman Resigns, Microsoft Bid Offering Heats Up
February 1, 2008 11:51 AM
comment(s) - last by
Yahoo Chairman Terry Semel resigns, Gates looks to solidify his online empire with the acquisition of Yahoo
Only days ago, the news broke that Yahoo was in
troubled waters and sinking fast
. The Internet giant, which ranks number 2 in terms of search engine traffic and number 1 in terms of total traffic to properties, posted a declining net profit for the fourth straight quarter. Worse yet, it announced that it would be cutting 1,000 jobs, or almost 7 percent of its workforce. CEO Jerry Yang stated that the company was facing "strong headwinds" and had to be prepared to
make big changes
Now, an opportunity has come knocking on Yahoo's door, which holds the promise of transforming the online business world. Microsoft Corp. made an unsolicited $44.6 billion
bid for Yahoo and its holdings
this morning. The offer is one half in Microsoft common stock, and the other half in cash.
The move promises a sweet payoff for share holders, who would see their stocks soar 62% from Thursday levels, up to a $31 per share payout.
Microsoft Chief Executive Steve Ballmer was among Microsoft's big guns to be pushing the move. He enthused that the move is the "next major milestone" for Microsoft. He continued, "We are very, very confident this is the right path for Microsoft and for Yahoo."
Ballmer informed the media that Microsoft has been in talks with Yahoo, preparing the offer, for nearly 18 months now. He gave Yahoo CEO Jerry Yang a personal call on Thursday night to announce the bid in person.
A Microsoft-Yahoo team would shake up the online community by creating a legitimate competitor to Google, which current stands
far above the competition
in terms of search engine Traffic. Traffic research site comScore indicates that Yahoo has 22.9% of the search engine market and Microsoft owns a 9.8% share. Together, their 32.7% share, would pose a challenge to Google's 58.4% share of the U.S. search engine market.
Microsoft revealed that it had first had broached the possibility to Yahoo executives a year ago, but was rebuffed by Yahoo's board of directors and CEO. With today's resignation of Semel, the balance of Yahoo's board could lead to a different outcome. Semel was strongly opposed to the merger last year.
A year after Microsoft's offering, Yahoo is
much worse for wear
and promises to evaluate Microsoft's proposal "carefully and promptly." As UBS analyst Benjamin Schachte puts it, "Last year, Yahoo told investors it needed more time to get on the right track. But you only get a certain amount of time to turn things around."
Steve Ballmer stated, "We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market."
Google spokesman Matt Furman declined to comment, stating, "It would be premature to comment at this point."
However, its safe to say that Google is not blind to the impact a Microsoft acquisition of Yahoo would make on its competitive prospects. It looks like Google may have a
real fight on its hands for the first time in years
, and Microsoft may soon add a
new piece to its ever-growing empire
This article is over a month old, voting and posting comments is disabled
2/5/2008 5:13:28 PM
You're right, Microsoft is just HUGE in the hardware market...
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
Microsoft Offers to Buy Yahoo for $44.6 Billion
February 1, 2008, 10:00 AM
Yahoo Cuts 1,000 Jobs as Profits Fall 23%
January 30, 2008, 3:37 PM
Yahoo Trades Pink Slips for Greenbacks
January 22, 2008, 4:24 PM
Yahoo to Make Big Changes
January 16, 2008, 12:16 PM
Ballmer Welcomes Google's Android OS to "Microsoft's World"
November 14, 2007, 9:56 AM
Facebook Adds Satire Tags to Its Auto-Generated "Related News" Posts
August 18, 2014, 10:43 AM
Comcast, TWC Pull Dinner Gift for FCC Commissioner... Sort Of
August 15, 2014, 1:10 PM
Comcast Accused of Wooing FCC Commissioner w/ $110K Dinner
August 13, 2014, 8:20 PM
Quick Note: Nokia’s Lumia 520 Available for $39.99 Off Contract Today Only
August 13, 2014, 10:37 AM
Wikipedia Scores $140,000 in Bitcoin Donations in One Week
August 11, 2014, 9:32 AM
China to Require Real Names for Chat Apps
August 8, 2014, 8:28 PM
Most Popular Articles
Lumia 830 Gets Major Upgrades Including New 20.1 Megapixel Toshiba Sensor
August 15, 2014, 6:00 PM
With USB Type-C Spec Finalized, Reversible Cables Will Soon Be Upon Us
August 13, 2014, 8:46 AM
Windows Phone, BlackBerry Smartphone Market Share Falls to 2.5%, 0.5% Respectively
August 15, 2014, 9:44 AM
Update: Samsung Gets Official With 4.7”, Aluminum-frame Galaxy Alpha Smartphone
August 14, 2014, 8:56 AM
GM Concedes That the Cadillac ELR Doesn’t Really Compete with the Tesla Model S
August 15, 2014, 5:42 PM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information