Microsoft makes $44.6B offer for Yahoo!

In an aggressive move by Redmond giant Microsoft, a $44.6 billion offer was made for Yahoo! after the latter reported poor 4th quarter earnings. That and the pending thousands of layoffs from the internet portal. Yahoo’s stocks dropped to about 10% after trading hours.

The offer boils down to about $31 per share in cash and stock. Rumors of the possible offer dates back to May 2007 when a potential $50 billion offer was being floated and that’s not even the first time. This time around, Microsoft is serious. As AP reports:

To underscore its resolve, Microsoft is offering a 62 percent premium to Yahoo’s closing stock price Thursday. If the deal is consummated, it would be by far the largest acquisition in Microsoft’s history, eclipsing last year’s $6 billion purchase of online ad service aQuantive.

Since reaching a 52-week high of $34.08 in October, Yahoo shares have fallen 46 percent. Yahoo climbed $9.41 a share, or 49 percent, to $28.59 in morning trading. Microsoft shares fell $1.43, or 4.4 percent, to $31.17.

Microsoft publicly disclosed its cash-and-stock offer in hopes of rallying support from Yahoo’s shareholders, making it more difficult for Yahoo’s board to turn down the bid.

The announcement lifted Yahoo’s share price by almost 50 percent in morning trading, while Google fell almost 8 percent. Is Yahoo a good buy to Microsoft? I’ve discussed some points about this possible acquisitionand the overlapping products and services here . As long as Yahoo! gets to retain its name/brand, the added infrastructure and combine advertising resources will help the company regain its market share.

More of my analysis here.

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  • banana12

    I think this is a smart move for microsoft. I’m expecting microsoft’s division to synergize with yahoo’s since its in a much better position in the market. For the first time in years there’s someone who stands a chance in ending google’s almost monopolistic reign of the search market.

  • Even if microsoft do buy yahoo, I still dont think there end googles dominance.
    I suppose we will just have to wait and see.

  • In an update, Yahoo’s board rejected the offer, saying it was too low. Microsoft has announced that it will continue to seek every means possible to make the transactions push through, raising the possibility of a hostile takeover, where shareholders overrule the board of directors and force them to sell the company.

  • Absolutely Banana 12. This is a good step to challenge Google’s dominance in the online advertising industry and a smart step in the direction of mobile advertising (which google is mobilizing to dominate now)

  • dominant pa rin ang google.