Microsoft Offers Yahoo $44.6 Billion! What Does This Mean?

February 1st, 2008

6 Comments Written by Ashley

Microsoft Yahoo We’d be surprised if you haven’t heard by now that Microsoft has made an offer to Yahoo to acquire them for about $44.6 billion in cash! It’s all over the news (for good reason), and there are all kinds of ideas regarding this acquisition floating around the Internet. Instead of talking in length about each of them, we thought we’d sum everything up into an easy-to-read bulleted list.

Microsoft proposes the acquisition of Yahoo for $44.6 billion dollars which translates to about $31 a share (read)
Before the announcement yesterday, Yahoo stock was trading at about $19 - it is now up to $27.91 after word of the offer (read)
What would a combined Microsoft-Yahoo look like? TechCrunch compares the revenues of a combined Microsoft/Yahoo with Google
Combining the two would be a long and tedious process because there are more duplicate services (e.g., yahoo.com/msn.com, Yahoo Games/MSN Games, Yahoo Maps/Live Maps, Yahoo Messenger/Live Messenger, etc.) than you might imagine and I Started Something points out what a mess this could be
Could a combined Microsoft and Yahoo turn out to be a strong competitor to Google?
Yahoo acknowledges the offer and says that their “Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo’s strategic plans and pursue the best course of action to maximize long-term value for shareholders” (read)
Longtime Yahoo Director Terry Semel is stepping down from the Board of Directors, could this affect the decision? (read)
Think the online advertising market has anything to do with Microsoft’s desire to snatch up Yahoo? We do. The online advertising market is expected to grow from $40 billion in 2007 to $80 billion by 2010… wow!
The Department of Justice is already “interested” in looking into this deal for possible antitrust issues, no surprise there (read)

Thanks to everybody who sent this in!

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Tags: Web Sites, Acquisition, Microsoft, Yahoo

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February 1st, 2008 at 11:13 am epiac1216 (All-Star)

@Ashley:

In an attempt to stop Google’s spectacular growth, Microsoft will shoot its own foot. Adding Yahoo to Microsoft means the creation of a monster with too many different personalities. Just the pain to consolidate both organizational cultures will create bloody “we Versus you” battles, while Google quietly continues to develop its “cloud computing” empire.

If this deal goes through, it will end up like the Times-Warner/AOL deal—a total fiasco!

Regards,

Omar.-
February 1st, 2008 at 6:52 pm Michael Dobrofsky (All-Star)

epiac1216 wrote:

@Ashley:

In an attempt to stop Google’s spectacular growth, Microsoft will shoot its own foot. Adding Yahoo to Microsoft means the creation of a monster with too many different personalities. Just the pain to consolidate both organizational cultures will create bloody “we Versus you” battles, while Google quietly continues to develop its “cloud computing” empire.

If this deal goes through, it will end up like the Times-Warner/AOL deal—a total fiasco!

Regards,

Omar.-

Yes, I agree there. I think if it happens, it’ll be a big mistake for MS. I wouldn’t want to take on all that work of combining services into one. It’s too daunting to think about the transition of service to service. And what a ridiculous amount of money.
February 1st, 2008 at 10:03 pm Google (All-Star)

Hehehehehe I love it! If this happens we could have war on our hands! I could see Google and Apple getting a little cozier after this!
February 2nd, 2008 at 2:51 am lp007

I would think that a merger of this kind would certainly be in violation of anti-trust laws… well, it would be if the Justice dept actually prosecuted anti-trust cases anymore.

I think this is a bad move also… and beyond the scope of anti-trust issues, I’d like to see it go through and watch MS fck it up!

They can’t beat their competition so they’ll just buy them and go through the motions of screwing up the whole thing. Fortunately, Google is out of their price range

Really, what has M$ done… right… lately?? It seems that every new business they decide to buy/create either mopes along doing little or nothing or flat out fails.

I’m having visions of Zunes and “Play For Sure” and Vista’s over-priced, bloated smorgasborg of flavors. Then there’s LIVE and URGE and MSN Store. Even they can’t get their own DRM to work well on their own sites (xbox live) with their own equipment (xbox)!

“WGA call home”, anybody??
February 3rd, 2008 at 11:24 pm Jidery

Arnt they compeating with yahoo with live.com?
February 4th, 2008 at 10:40 am Ashley (Author)

Google wrote:

Hehehehehe I love it! If this happens we could have war on our hands! I could see Google and Apple getting a little cozier after this!

I believe the war has already started! Now multiple companies are interested in Yahoo and Google wants to come in and “save them” from Microsoft in particular by offering some type of alliance. This should get interesting!

lp007 wrote:

I would think that a merger of this kind would certainly be in violation of anti-trust laws… well, it would be if the Justice dept actually prosecuted anti-trust cases anymore.

The Justice department has already said they are interested in reviewing this, so I’m sure they’ve got anti-trust already on their mind.