Microsoft + Yahoo = ?
Friday, April 18, 2008
Click HERE for the full article.
Issue:
Possible merger between Microsoft and Yahoo
Rationale:
"Microsoft is feeling increasing pressure to compete with Google (GOOG), which plans to beef up its portfolio with a $3.1 billion purchase of online advertising company DoubleClick. "
Current Postition:
[Microsoft]
Microsoft currently trails both Yahoo and Google in the lucrative and growing business of Web search.
[Yahoo]
Yahoo has stumbled in recent years with a lack of strategic focus and laggardly technology at a time when Google has been able to monetize its search prowess to a degree that has startled investors.
Fact:
"According to newspaper reports May 4, Microsoft has asked Yahoo to enter formal negotiations for an acquisition that could be worth $50 billion. Yahoo's market capitalization was about $38 billion at the close of trading May 3."
"The deal came after Yahoo and Google said they were having a two week trial of an advertising space-sharing experiment. During the pilot, Google will be able to place ads alongside 3% of search results on Yahoo's website."
"Microsoft threatened to make its offer for Yahoo hostile and to reduce the amount it is prepared to pay if Yahoo's directors did not respond by 26 April." (http://news.bbc.co.uk/2/hi/business/7339992.stm)
Setbacks:
Recently, the shares of Microsoft fell 1.5% to $30.51.
=> Microsoft's falling share price has cut the value of its bid.
(to be continued)
Anonymous
