David Risley is the founder of PCMech.com. He is the brains, the thinker, the writer, the nerd.OK, the blogosphere is ablaze in the news of this bid by Microsoft to buy Yahoo. So, I guess I’ll pile on and bring you the news, too.
Yep, it is true. Microsoft is bidding to purchase Yahoo for $31 per share, or $44.6 billion, according to the press release by Microsoft. The per-share offer gives each share a 62% premium over the closing price of Yahoo stock yesterday.
Steve Ballmer said in his offer letter to the Yahoo! board yesterday:
“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.”
Let me translate for you:
“Google is kicking our ass and, if we’re going to have a snowball’s chance in hell of competing with them, we should work together.”
This is surely to get the attention of regulatory agencies if Yahoo accepts the offer. But, I think Microsoft is already anticipating that. The press release says:
“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.”
Translation:
“Google is kicking our ass and the government would be stupid to turn us down because Google has an unfair advantage. Not to mention that, if we don’t buy Yahoo, Google will.”
What’s interesting, too, is that Ballmer’s letter to Yahoo specifically mentions a previous, private offer to buy Yahoo which the Yahoo board or directors rejected. In marked contrast, this offer is very, very public. What does this mean? It basically amounts to a hostile takeover of Yahoo. As a corporation, Yahoo’s primary responsibility is to the shareholder. With Microsoft going public and saying they’re offering a 62% premium on the stock price, all of Yahoo’s shareholders are readily aware of this offer now. This forces Yahoo’s board to consider the offer.
And they are, announcing they will consider the offer.
Should this merger go though, it will probably prove to be a colossal pain in the butt. But, with Yahoo shares falling in value, this certainly is a bold move by Microsoft in an obvious attempt to form some stiff competition to Google.
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Lespaul20 said:
2/1/2008 5:24 pm
Actually, it’s not hostile yet.
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David M said:
2/1/2008 11:24 pm
What if Microsoft bought Yahoo and nobody showed up for work the next day?
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timeshare said:
2/2/2008 1:52 pm
i think this is the only wat google could be rivalled
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Peter said:
2/5/2008 11:15 am
I sure hopes Microsfot don’t buy Yahoo! out due to these reasons after lookign back what Hotmail has happened when MS brought it.
Before MS brought Hotmail, Hotmail was a very decent free web-based email around even surpassing the excpected Yahoo email services runned by 2 irealis guys (I believe and was told) and spam emails was like almost sorted and very rare few get pass the net into ur inbox.
MS brought it and low and behold, spam email increased 10 fold, because few times hotmail failed to be ported from linux to pc so in the end MS has to keep hotmail as linux systems. Because I used ot have hotmail account and now rarely in fact hardly ever used it as I defected over to Yahoo!.
If MS buys Yahoo! are we going to face porting problems? Search engine down, yahoo spam filter screwed up or even worst few few days no yahoo services at all and thus driving people over to google!
Worst case is, Yahoo! services is in choas fro days, weeks, or even months as MS sort it out due to teethign problems.
Best case is, MS leaves Yahoo! as it is but admin root convert to MS control and all access to non Yahoo! are locked and Yahoo! remains intact…
Something to think about with regards to MS!
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