Monday February 04, 2008

Microsoft offers to buy Yahoo for $44.6 billion, Yahoo may consider Google alliance

bloomberg.com :

Microsoft, the world's biggest software maker, made an unsolicited $44.6 billion offer for Yahoo! to challenge Google's dominance in Internet search services and advertising. The $31-a-share bid of cash or Microsoft stock is 62% more than Yahoo's closing price yesterday [31 Jan 2008]. Microsoft CEO Steve Ballmer is attempting the biggest-ever technology takeover after failing to compete with Google in a market that may almost double to $80 billion by 2010. Yahoo's inability to crack Google's dominance in search has led to eight straight quarters of declining profit and a stock that's lost half its value in the past two years. Microsoft's bid to challenge Google in online ads results from slowing growth in the computer software market. Microsoft also faces challenges in that business from Google, which now offers applications for word processing, spreadsheets and presentations over the Web.

uk.reuters.com, slashdot.org :

Yahoo would consider a business alliance with Google as one way to rebuff a $44.6 billion takeover proposal by Microsoft, a source familiar with Yahoo's strategy said on Sunday [3 Feb 2008]. Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, that source said. At $31 a share, Yahoo believes the bid undervalues the company, two sources said. The Wall Street Journal reported that Google CEO Eric Schmidt called Yahoo's chief executive Jerry Yang to offer his company's help in any effort to thwart Microsoft's bid. Spokesmen for Yahoo and Google declined comment.

- Over the weekend, what looked like an 80% chance of a Microsoft-Yahoo thing now looks like it might morph into a Google-Yahoo thing. Personally, I'm neither long nor short on any of the 3, so my only concern is that Yahoo Messenger, Google Docs and the other services that I use continue to work as they do.

Actully, I do not particularly care for Hotmail, MSN Messenger, Windows Live, or any of Microsoft's web-based services - which I guess is one of the reasons why Microsoft wants to buy Yahoo - they want the userbase and the income that comes from that userbase looking at ads, clicking on ads, buying stuff referred from the ads.

Who cares about the O/S Wars? Who cares about the Browser Wars? These are out of fashion nowadays. Welcome to the Ad Wars.

See also :

1. Yahoo to lay off 1000 workers
2. Yahoo talks to MSN, finally

(2008-02-04 13:01:47 SGT) [Biz] Permalink

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