Microsoft’s Bid for Yahoo Rejected
Posted: February 11th, 2008
It’s official. Microsoft’s $44.6 billion offer (in both cash and stock) for Yahoo has been rejected. This bid has caused a great stir in the search community as well as the larger business world in general.
Google tried to derail the possible Yahoo takeover by citing anti-trust concerns. Okay, Microsoft is well known for its anti-trust issues and the Internet needs to have fair and open competition, but far be it for Google to make such claims. After all, Google has a larger share of the market than both Microsoft and Yahoo combined.
Although Yahoo’s co-creator Jerry Yang is anything but a fan of Microsoft, he’s still enough of a businessman to realize $44.6 billion isn’t anything to sneeze at. This offer overvalues Yahoo by over 60% based on its stock price prior to the offer announcement. Was Yahoo’s stock really undervalued by that much?
There are also a few obvious benefits for their joining. The amalgamation of the second and third largest search engines does create a formidable search inventory to compete with Google. There are possible synergies between the two companies, with Microsoft being a software/technology company at its core, and Yahoo being good at… actually, nevermind.
So would the takeover really be beneficial for both companies, or would this have been similar to Yahoo’s $5 billion purchase of Geocities, which was basically a waste? What’s to become of Yahoo?
Tags: Google, Microsoft, Yahoo
I also just got special ‘newyear gift’ form...
I really like this development.If M$ wants something Yahooish, they should develop it from a scratch using their Billions.
I am really surprised that the bid is rejected. If both yahoo and Microsoft don’t get together they will killed by the giant Google.
I think one thing we’re forgetting is Yahoo’s global presence. Even though here in North America, we google everything, I know that in Japan, Yahoo is used for everything. I believe Yahoo auction is more commonly used than eBay (hence you don’t find any cool japanese stuff there).
Interesting take, but, Microsoft is trying to compete in a fast paced development market. While it may be a giant its centered to a slower paced market with larger projects, and not open sourced. Honestly, if they want to create a splash, rethink their whole busienss strategy, to compete with Google they have to start moving away from their current view on development and start to revamp the way they work. They have to start pushing out projects faster, or they will loose some more market share (As they did with IE vs Firefox).
Lucy, You think that if Yahoo and MS join they will kill Google? thats a joke.
Michael, you are kinda right about Japan. Google and Yahoo are about equal really and ebay and yahoo auctions are about equal also.
I’m Glad to hear this. Microsoft needs to spend it’s money on fixing up themselves! I use Microsoft and prefer it over others but they have a lot of ‘bugs’ or problems that need to be corrected.
Happy Yahoo made the right choice! Way to got to them - they turned down a bunch of money.
Idea: Microsoft can buy me for half price! $22.3 Billion…. I’m a bargain LOL
Thanks for this!
Everything that MS touches turns to crap IMO. I feel that if MS buys Yahoo then that will be the end of Yahoo as we know it.
Google or Microsoft will not be killed in any way shape or form. MS getting Yahoo will not take Google out. The only thing that I see is MS taking themselves out.
Microsoft will buy out Yahoo. They are really the only bidders at the table, well the only ones that have that kind of cash on hand. Yahoo seems to be fishing for more money maybe.
It was nice to know Yahoo. Do you Micro-hoo!?
@Clement:
Developing what Yahoo has is more than just a matter of money. They are highly recognized all over the world as Michael points out, and a userbase can’t just be “developed” regardless of all the $’s in M$.
@Michael:
I haven’t heard much about Yahoo auctions, but I’ve heard rumours of a possible eBay/Yahoo merger. I’m not sure how good a deal that would be unless some of Yahoo’s divisions, well, get dividing.
@Mattaw:
Microsoft might already be heading for a new direction seeing as it won’t be gaining any appreciable level of search traffic (especially without revamping their search algorithms). Nonetheless, MS seems to be standing its ground in terms of a search delivery platform: Microsoft adCenter Wins Wall Street Journal Deal.
@Mouseclone:
Actually, MS does not have the actual cash on hand to buy out Yahoo, but undoubtedly have enough assets and income to cover for it. I know how you feel about MS mismanaging Yahoo, and Yahoo has certainly been mismanaged enough before.