Skip to main content

Microhoo Or Yahsoft

Microsoft Corp. on Friday offered to buy search engine operator Yahoo! Inc. for US$44.6 billion, in an effort to better compete with online advertising giant Google Inc. Microsoft
said its "compelling" offer of US$31 a share, half cash and half stock, represents a 62% premium on the closing price of Yahoo US$19.18on Thursday.

In a brief statement, Yahoo said its board of directors "will evaluate this 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."

Yahoo shares jumped 57% to $30 in preopen U.S. trades. Microsoft shares were down 5%, while Google stock dropped 6%. Google poses a clear long-term threat to Microsoft's business, but Microsoft and Yahoo together would make a significant competitor who could fight back.

Google dominates the Internet-search business with a 56.3% market share, according to the latest report by ratings agency Nielsen Online. Yahoo! (17.7%) and Microsoft (13.8%) combined for a market share of 31.5% in December.Microsoft had tried to buy Yahoo last year, but Yahoo balked. The sharp decline in Yahoo's stock - it recently touched its lowest point since October 2003 - made a potential purchase more inviting for Microsoft. Earlier this week, Yahoo posted a sharp drop in fourth-quarter profit and said it would trim its workforce.

Microsoft said the combination would create a more "efficient" company with annual savings of US$1 billion, driven by research and development critical mass, operational efficiencies and increased value for advertisers.
Yahoo has more than 500 million unique users and over 4 billion daily page views.

There are the risks of a "culture mismatch" and potential employee attrition would have to be managed carefully. Microsoft said it would offer significant retention packages to Yahoo engineers, key leaders and employees across all disciplines. The software behemoth expects the deal to get regulatory clearance and to be completed in the second half of 2008.

Comment - About time this happened. As good as Google is, I don't think I want to be in a business world where Google is the highly dominant player, much like what Microsoft was for the last 20 years. The other thing I loved was the professional secrecy in the way the bid was announced - I don't think you will see that in Malaysia with a stock being offered at a 60% premium to closing price. If it was in Malaysia, the stock would have risen close to US$30 prior to the announcement: I wonder why!


DanielXX said…
Unfortunately, Yahoo! only deserves a small addition to Microsoft's name. How about "Microsoft!" ....
Salvatore_Dali said…

very witty and appropriate

Popular posts from this blog

My Master, A National Treasure

REPOST:  Its been more than two years since I posted on my sifu. This is probably the most significant posting I had done thus far that does not involve business or politics. My circle of close friends and business colleagues have benefited significantly from his treatment.

My Master, Dr. Law Chin Han (from my iPhone)

Where shall I start? OK, just based on real life experiences of those who are close to me. The entire Tong family (Bukit Kiara Properties) absolutely swear that he is the master of masters when it comes to acupuncture (and dentistry as well). To me, you can probably find many great dentists, but to find a real Master in acupuncture, thats a whole different ballgame.

I am not big aficionado of Chinese medicine or acupuncture initially. I guess you have to go through the whole shebang to appreciate the real life changing effects from a master.

My business partner and very close friend went to him after 15 years of persistent gout problem, he will get his heavy attacks at least…

PUC - An Assessment

PUC has tried to reinvent itself following the untimely passing of its founder last year. His younger brother, who was highly successful in his own right, was running Pictureworks in a number of countries in Asia.

The Shares Price Rise & Possible Catalysts

Share price has broken its all time high comfortably. The rise has been steady and not at all volatile, accompanied by steady volume, which would indicate longer term investors and some funds already accumulating nd not selling back to the market.

Potential Catalyst #1

The just launched Presto app. Tried it and went to the briefing. Its a game changer for PUC for sure. They have already indicated that the e-wallet will be launched only in 1Q2018. Now what is Presto, why Presto. Its very much like Lazada or eBay or Alibaba. Lazada is a platform for retailers to sell, full stop. eBay is more for the personal one man operations. Alibaba is more for wholesalers and distributors.

Presto links retailers/f&b/services originators with en…

How Long Will The Bull Lasts For Malaysia

Are we in a bull run? Of course we are. Not to labour the point but I highlighted the start of the bull run back in January this year... and got a lot of naysayers but never mind:

p/s: needless to say, this is Jing Tian ... beautiful face and a certain kind of freshness in her looks and acting career thus far

I would like to extend my prediction that the bull run for Bursa stocks should continue to run well till the end of the year. What we are seeing for the past 3 weeks was a general lull where volume suddenly shrunk but the general trend is still intact. My reasons for saying so:

a) the overall equity markets globally will be supported by a benign recovery complemented by a timid approach to raising rates by most central banks

b) thanks to a drastic bear run for most commodities, and to a lesser extent some oil & gas players, the undertone for "cost of materials" have been weak and has pr…