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Microsoft is willing to lay down $50 billion for Yahoo Inc. say reports

The search and advertising industry could change drastically over the next year if Microsoft has its way with Yahoo. In the last several weeks, it was well publicized that Microsoft and Google went head on in a bidding war for Internet advertising giant DoubleClick. Eventually, Google won and settled with DoubleClick for roughly $3.1 billion -- a sum that had analysts questioning Microsoft's true motives.

At the time of the acquisition, Microsoft had roughly $25 billion of available cash in its bank; more than double that of Google's $11.9 billion. Observing these figures, it was odd to see Microsoft back out of a deal it could easily win. "The best side to be on in a bidding war is the losing side," said legendary Wall Street tycoon Warren Buffet. Buffet is implying that the loser in a bidding war has forced the winner to over-pay for something.

Today, Forbes is reporting that Microsoft is in negotiations with Yahoo for a possible acquisition that could be worth $50 billion. According to the report, Microsoft is feeling greater pressure to compete in the online advertising space. Just recently, Yahoo announced its acquisition of online advertising firm Right Media for $680 million. While this is far from Google's $3.1 billion expense on DoubleClick, it does indicate that Yahoo is already quite a force in online advertising.

Another sticking point for Microsoft is the fact that both Google and Yahoo are ahead of the game when it comes to search. Microsoft has been playing catch up to Google and Yahoo with MSN Search, but having Yahoo under its belt would surely set the company onto a different playing field altogether.

Despite an impending deal with Yahoo, Microsoft hasn’t taken its eyes completely off the Google – DoubleClick deal. Microsoft is loudly voicing its opinion against the deal and has asked regulators to carefully monitor the acquisition.

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RE: Problem Solving with $$
By rushfan2006 on 5/4/2007 2:28:04 PM , Rating: 4
What Microsoft can't beat, Microsoft buys.

Yeah...but you should have included a fine print dislaimer like ".....and so does the rest of the business world since the dawn of time"....

But I forgot we just want to focus on Microsoft. ;)

The problem is when people comment on such business deals -- they severely over simplify things...usually because they react out of emotion....but sometimes its because they really don't understand the world of business.

CEO's and board of directors, at least the good ones -- are wise to invest in competition when they feel the time is right (which in and of itself is determined, I can almost guarantee you, by months of research and many many board meetings on the issue) to make a purchase (or at least attempt to).

Also remember one can't doesn't just "automatically" assume a nother merely on the basis of they have the money to do so.

You could have $50 TRILLION dollars and that doesn't automatically mean you just speak and a company is yours. It has to be approved by the company you are seeking to acquire.

All to often people react like company A is "stealing" company B ...and we are supposed to be "poor poor company B was bought out by the evil company A"....yeah where do you think that money goes in the buyout.....INTO THE COMPANY THEY ARE BUYING....if the employees don't get a piece of that -- be mad at the top brass of the company being bought for that...not the ones doing the buying.

RE: Problem Solving with $$
By Nekrik on 5/4/2007 3:33:41 PM , Rating: 2
Most companies, maybe not one the size of Yahoo!, but smaller ones, jump through hoops of fire trying to make themselves look attractive enough to be bought out buy a company such as Microsoft or Google. They tend to cut off anything not making money, actually redecorate for the visiting execs, make sure that code is as secure and solid as we can make it, etc...

RE: Problem Solving with $$
By sxr7171 on 5/5/2007 11:30:59 AM , Rating: 1
You went from 3rd person to 1st person in your post. Freudian slip?

RE: Problem Solving with $$
By Supa on 5/4/2007 7:00:39 PM , Rating: 1
Good argument, but you're extracting too many self-created assumptions from one simple statement.


RE: Problem Solving with $$
By Axbattler on 5/5/2007 8:53:33 AM , Rating: 2
In most cases, I am inclined to agree.

Still, I, for one, would say 'poor, poor Aureal'. It was doubtfully voluntary, and though you could blame Aureal from going bankrupt in the first place, it was at the very least, partially caused by the Creative's failed lawsuit. As a strategy, it worked wonders. But it does not promote healthy business competition.

More than 'poor, poor Aureal', I am going to say 'poor, poor consumers'. I am going to say that the X-Fi is a decent card. Yet I can't be wonder what the gaming sound card industry would be like had Aureal sticked around. I think many who used their products would disagree that they had a little gem with potential with them.

RE: Problem Solving with $$
By sxr7171 on 5/5/2007 11:32:23 AM , Rating: 2
Yeah, Aureal was good and I had drivers that were actually stable to go along with it.

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads
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