Microsoft suprises Yahoo! with offer
CB
Ƹ̵̡Ӝ̵̨̄ƷDer Millionendorf- Icrontian
In a surprise move Friday morning. Microsoft has offered to purchase Yahoo! for $31/share, which is a 62% premium over yesterday's closing price, but only pennies above the price it jumped to in pre-market trading since the announcement ($30.75/share). Simultaneously MS shares dropped to $30.78/share, a loss of 6%, in the same pre-market period.
While the offer was unsolicited, it is not a complete surprise to market analysts, who have noted that MSN and Yahoo both are losing ground dramatically to Google in the fight for Internet searchers' eyeballs. Currently, Google holds about 77% of the internet search market, while Yahoo and MS are a distant second and third at about 16% and 4%, respectively. While the acquisition would mean an immediate jump in market share, the real benefit would come from the synergy that the two companies could potentially develop. Whether or not they can manage to bring Google down a few notches remains to be seen, and many analysts are skeptical that these two forces would have the capacity to work well together.
If Yahoo! accepts this deal it will be the biggest communications merger since the $182 billion merger of AOL and Time-Warner, two companies that were unable to develop a working synergy, and which has since given up on its subscription-based OSP operations.
While the offer was unsolicited, it is not a complete surprise to market analysts, who have noted that MSN and Yahoo both are losing ground dramatically to Google in the fight for Internet searchers' eyeballs. Currently, Google holds about 77% of the internet search market, while Yahoo and MS are a distant second and third at about 16% and 4%, respectively. While the acquisition would mean an immediate jump in market share, the real benefit would come from the synergy that the two companies could potentially develop. Whether or not they can manage to bring Google down a few notches remains to be seen, and many analysts are skeptical that these two forces would have the capacity to work well together.
If Yahoo! accepts this deal it will be the biggest communications merger since the $182 billion merger of AOL and Time-Warner, two companies that were unable to develop a working synergy, and which has since given up on its subscription-based OSP operations.
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Comments
//edit: fail.
Google is on a path for world domination and unless something is done no one is going to touch them.
Yahoo has all the best web services (Yahoo Mail, Flickr, Yahoo Finance, Yahoo Maps, Yahoo Search Marketing, Yahoo Maps, etc...). MS has all the money and a better R&D department.
Google already has both.
It would be in best interests of both companies to gang up on the big G. Especially if Google is now moving into who knows what sector if they are the winners of the 700mhz auction.
I say give 'em the green and go for it.