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2007 photograph of Yahoo billboard in front of a ticker mentioning Microsoft news by Mark Lennihan/AP
Giving business analysts something to talk about besides the economy, Microsoft has made an unsolicited $44.6 billion bid for Yahoo!. The offer is at $31/share, which is 62% more than Yahoo's closing price.
Microsoft hopes to create efficiencies by teaming up to compete with Google. However, Pioneer Investments fund manager Thomas Radinger told Bloomberg News, "Microsoft is under massive pressure to expand its Internet business to fend off competition from rivals such as Google and this deal shows how desperate they are. It's a huge gamble as the price is very steep and it will take years to successfully integrate such a massive acquisition.''
The NY Times reports it's unclear "how Yahoo's board will react to Microsoft's offer." Microsoft thinks it will get regulatory approval for merger, but we're not sure this will be a win for Joe or Jane User. We can just picture it now: Hotmail + Yahoo Mail = HotYahooMail!
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How long did it take you to think of that HotYahooMail joke?
This is like when Time Warner bought AOL...only even more idiotic and late.
Nick, clearly that "joke" took 1/10 of the time it took you to write it. I haven't used hotmail in ages, so I didn't feel comfortable to make a "Spammy than ever joke."
...and now i'm just confused.
Holy shit! this is just a coming sign. First Microsoft takes over yahoo, then skynet launches, and then nuclear armageddon.
Nice. A one-stop-shop on the internets for pinochle-playing grannies and others who think identity thieves actually live inside their computers.
Don't use microsoft, don't use yahoo... couldn't care less...
This is not going to happen, no way. The numbers don't crunch. The tender for the shares is way, way too high, and Yahoo is a declining internet property. Right now Yahoo is trading around $20 USD.
This is like when Time Warner bought AOL...only even more idiotic and late.
Not sure how it is the same and anyway, AOL bought Time Warner. It might have been a bad idea to begin with but it was horribly executed as well.
And emilydickinson, can you show your analysis of how the price is too high? Just because the market values a stock a $20 doesn't mean it isn't worth more to a strategic buyer, especially one paying at least partially with stock. Companies always pay up anyway.
Yahoo has lost 20% of its' value in the last month, and that hasn't happened with tech since 2000. Yahoo has been around for 10 years, and it's growth is tiny, we're dealing startups that are expanding in leaps and bounds. Yahoo is a huge operation, with expenses that reflect that. It also plays second fiddle to Google by a long shot.
31 a share? That's about 62% above value. Seems awfully dices for a company that will most likley grow just 9%.
When was the last time you 'Yahooed' something and didn't 'google' it?
Emily - If you follow the sector you will know that Yahoo has been hugely undervalued for a long time...this deal makes sense for Microsoft...the only problem potentially is anti trust issues...
Great.... Microsoft will certainly come in and make Yahoo's fantasy sports interface more "intuative."
And by intuative I mean I'll certainly have to start paying for ESPN's crappy system.
When was the last time you 'Yahooed' something and didn't 'google' it?
Well that certainly is true although I much prefer Yahoo mail to Gmail. And yes, their growth is very slow. But 62% above yesterday's market price makes the assumption that Wall Street always values stocks correctly. If Wall Street was so smart then the stock wouldn't have been in the 30s last year. My point is only that as part of a larger entity Yahoo may actually have more value than as a stand alone company. Anyway, if this goes through it will be years before anyone can really evaluate if it was a good idea or not. My best guess is that it won't hurt or help Microsoft much in terms of EPS.
Yahoo was the very first website I browsed, ever. Summer of 1996; I was like a kid in a candy store in my college's computer lab. Now it's has finally gone the way of Excite and Lycos. I feel old.
Tell me about it - remember Infoseek? Who would ever have thought the CEO did good selling out to Disney back in the pre-bubble days...
A Yahoo takeover will allow MS to finally fully get into social networking/online advertising in a big way...
Good point ER...only last Oct. Yahoo was priced at $34 - this offer is way below that high...as I said it's been undervalued big time and anyone who bought into the stock recently is gonna get a nice bump up in the next month or so...
I don't understand the "Yahoo is undervalued" theory. It seems to me that Yahoo, like AOL, stands on very shaky ground -- a mass of unsophisticated users who may well be drawn elsewhere by the bright lights of some other circus.
I'd like to see Microsoft buy them, though, because I think it would drag them both down. I have nothing against Yahoo, but the Evil Empire.... the sooner it goes down the better.
Ugh, I just realized the worst part about this.
Microsoft would own Flickr.