Microsoft to Buy Yahoo for $44.6bn

...at least that' s their plan.

Microsoft has offered to buy the search engine company Yahoo for $44.6bn (£22.4bn) in cash and shares.

The offer, contained in a letter to Yahoo' s board, is 62% above Yahoo' s closing share price on Thursday.

Yahoo cut its revenue forecasts earlier this week and said it would have to spend an additional $300m this year trying to revive the company.

It has been struggling in recent years to compete with Google, which has also been a competitor to Microsoft.

In a conference call, Microsoft' s Kevin Johnson said that the combination of the two companies would create an entity that could better compete with Google.

It is a shotgun marriage, but the person holding the shotgun is Google
Tim Weber, business editor, BBC News website

" Today the market [for online search and advertising] is increasingly dominated by one player," he said.

Yahoo confirmed that it has received an unsolicited offer and said that its board would evaluate the 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."

If Yahoo accepted the offer, competition authorities both in the US and the European Union would be likely to investigate the tie-up.

Yahoo chief executive, Jerry Yang, announced on Tuesday that he intended to lay off 1,000 staff as part of a restructuring plan.

Terry Semel, who stepped down as chief executive last June, also quit as non-executive chairman on Thursday.

Microsoft said that Yahoo shareholders could choose to receive either cash or shares.

YAHOO' S FALLING PROFITS
Oct to Dec 2007 down 23%
July to Sept 2007 down 5%
April to June 2007 down 2%
Jan to March 2007 down 11%

Yahoo share price
Microsoft share price
Google share price

Yahoo shares have fallen 46% since reaching a year-high of $34.08 in October. On Friday they closed almost 48% higher.

Microsoft closed 6.6% lower while Google shares fell 8.6%.

" Ultimately this corporate marriage was forced by the rise of Google, which has grown into a serious competitor for both Microsoft as a software company and Yahoo as an internet portal," said Tim Weber, business editor of the BBC News website.

" It is a shotgun marriage, but the person holding the shotgun is Google."

' Exorbitant premium'

According to its letter to Yahoo, Microsoft attempted to enter talks about a deal a year ago, but was rebuffed because Yahoo was confident about the " potential upside" presented by the reorganisation and operational activities that were being put in place at the time.

" A year has gone by, and the competitive situation has not improved," Microsoft' s letter said.

But there has been some concern about the price that Microsoft is offering.

This smacks of desperation from Microsoft who have consistently failed to achieve a meaningful online presence

" To me, the premium seems exorbitant, for what is a dwindling business," said Tim Smalls from the brokerage firm Execution LLC.

" I personally don' t see how the synergies of Microsoft-Yahoo is going to take on Google."

Other analysts were more enthusiastic about the offer.

" It is a fantastic offer. It is game on," said Colin Gillis from Canaccord Adams.

" This consolidates the marketplace down to Google versus Microsoft. These two companies will be going head to head."

So much money

"If you knew how good I am you would think I'm modest."

Microsoft has been in war with Google for a while now. This is a direct jab at them. 45 Billion dollar sucker punch. I wonder how much of this has to do with male posturing.

44.5bn seemed to me at least, to be a ridiculous amount of money to pay for Yahoo of all companies, the underdog for quite some time, and their stock isn' t anywhere amazing either.

I don' t bet on this having any effect whatsoever on Google' s success with Google.com, or Microsoft' s failure with the relatively poor Windows Live Search.

I guess the guys at yahoo don' t consider themselves worthless afterall

http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/index.htm?postversion=2008020913

Well, I think Yahoo has the most web mail users. I use it, and personally think that their web mail is by far the best. Also, I' m not completely sure on this, but even though google gets more searches, yahoo actually has more visitors than google does.

Also Yahoo has a lot of things that are way better than googles. Yahoo Maps for example, blows google maps out of the water.

I use google web, image, and video search, but I use Yahoo for everything else.

I don' t get why the liberals aren' t crying out about google' s " monopoly" on the web search. They seem to like google. Google is a very aggressive company, just as aggressive as MS. They bought youtube and are trying take control of the whole internet. They' re an evil corporation.

"If you knew how good I am you would think I'm modest."

ORIGINAL: locopuyo

Well, I think Yahoo has the most web mail users. I use it, and personally think that their web mail is by far the best. Also, I' m not completely sure on this, but even though google gets more searches, yahoo actually has more visitors than google does.

Also Yahoo has a lot of things that are way better than googles. Yahoo Maps for example, blows google maps out of the water.

I use google web, image, and video search, but I use Yahoo for everything else.

I don' t get why the liberals aren' t crying out about google' s " monopoly" on the web search. They seem to like google. Google is a very aggressive company, just as aggressive as MS. They bought youtube and are trying take control of the whole internet. They' re an evil corporation.

Exactly what i have been saying all along . Google is as aggressive as MS . They know if MS buys Yahoo they will have some serious competition but nobody will point at google because any company competing with MS are considered as fighting monopoly . Google is trying to monopolise the internet as loco said . They have launched their own version of wikipedia .Now they are trying to come off as saviors of yahoo . Its going to be pretty fucked up if google buys (atleast a stake) in yahoo to fend off MS .

They' re an evil corporation.

I agree but It' s better to have two evil corporation fighting against eachother as opposed to one evil corporation fucking the consumer full time.

I like ' em both!

They' re my HEROES!

But seriously...

What Google is doing isn' t monopolizing. They are merely trying to get a hand in everything. Now Microsoft... yeah, they wanted to simply lock out the competition.

You' re a fool for thinking google doesn' t want to take over the internet.

"If you knew how good I am you would think I'm modest."

I' ll link it later, but Yahoo' s declined Microsoft' s advances.

ORIGINAL: Eddie_the_Hated

I' ll link it later, but Yahoo' s declined Microsoft' s advances.

?? I thought I did that already.

Whoops! I figured I' d already read most of the posts, as I didn' t think it was that hot of a topic. I totally missed yours, so I posted the news. Cred to Nekkid for the info then.