Saturday, February 2, 2008

Microsoft Offers $44.6 Billion To Acquire Yahoo

It’s been rumored for a long time, but now it’s reality.

Microsoft has made an unsolicited $44.6 billion bid for Yahoo. The bid, which would consist of cash and Microsoft stock, values Yahoo shares at $31 a share, a 62% premium on Thursdays closing price.

Michael stated during his appearance on Fox Business this week that Yahoo could face a takeover by Microsoft as part of an ad play, and he was right. Microsoft cites online advertising as being one of the key benefits of the acquisition, saying that “resulting benefits of scale along with the associated capital costs for advertising platform providers make this a time of industry consolidation and convergence. Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners.”

The emphasis is mine but it’s another key point: Microsoft + Yahoo = a stronger competitor to the Google borg.

Microsoft has previously shown an interest in Yahoo, with reports in May 2007 saying that Microsoft had approached Yahoo about a friendly takeover.

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