Microsoft wants to buy Yahoo for $31 a share, $44.6 billion deal |
Yesterday, news that Terry Semel was even further out than he was when he was replaced as CEO by Jerry Yang and today the news that battered Yahoo shareholders have been waiting for: Microsoft wants to buy them. Keep your eye on Yahoo stock price today (disclaimer: I own YHOO stock) as Microsoft has broken out their love ahead of Valentine’s Day.
Microsoft put an offer to the Yahoo Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31, which rings the deal in at $44.6 billion.
“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Steve Ballmer, chief executive officer of Microsoft. “We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners.”
A combined Microsoft-Yahoo would definitely stir the Google Giants because of the sheer amount of web eyeballs between the two properties. There are some in the tech community that said this acquisition would never happen, and it wasn’t until the Yahoo stock price started imploding that a reality for this deal came to fruition.
The deal isn’t done, but Microsoft believes the transaction could be completed by the second half of 2008. I’m excited by the possibilities of seeing my favorite Yahoo properties on places like Xbox Live and the Zune. Imagine Flickr integration on the Xbox Live blade. How about Zune social with delicious bookmarking (artist website tie-in)? And then there’s Microsoft AdCenter, the real belly of the beast that could rain on Google’s parade if only we could put it on our websites. Yahoo already has YPN so maybe AdCenter could shoehorn into that and voila, something that could seriously compete against Adwords/Adsense.
In December 2006 I wrote the one reason Microsoft might acquire Yahoo would be a defensive move to Google. This is even more true in 2008. I’m sure the tech pubs will be dominating TechMeme with this story today. For those who think this is a bad move for Microsoft or Yahoo, keep in mind that Microsoft + Yahoo = better competition against Google. If Google has no serious competition it will get lazy.
I think this is a good move for Microsoft if they don’t squander the assets. Whether they will or not assuming the deal goes through only time will tell. Exciting news heading into a weekend. Can’t wait to read what others have to say. Where did I first hear about this? On Twitter.
While Microsoft is in the buying mood, they should buy Twitter too. They have the engineering firepower to handle Twitter’s scaling woes.
Update 4:41am PST: Microsoft’s official statement. They are having a live webcast at 5:30am PST. Thanks for the head’s up ParisLemon, who also pointed out that YHOO stock price has jumped 60% in pre-market trading already. Google it’s ON.
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My concern is that does Microsoft have the where withall to really merge Yahoo into themselves? How long did/has it taken HP to get Compaq merged? Will Google just run on by while they stagger trying to get the merger done?
Comment by FranciscoIV — February 1, 2008 @ 7:26 am PST
[…] (Yahoo!) - UP from $19 to $31 on possible Microsoft acquisition, but down from $34 in October […]
Pingback by Cramer on Tech sector stocks: “Tech’s awful.” » Make You Go Hmm — February 6, 2008 @ 8:04 am PST
I almost thought it was April 1st when I read the title of this post. Unbelievable how the No. 1 internet giant is now struggling to maintain itself in the dominant three pack.
Comment by Kenton — February 8, 2008 @ 11:40 am PST
Looks like a pretty solid acquisition. The huge jump per share mad me take notice of this story.
Comment by Tzepu — February 8, 2008 @ 6:55 pm PST
Just read in the news that Yahoo is planning to spurn the bid as too low. Possibly a negotiating tactic to get Microsoft back up to it’s $40/share bid that they unofficially pursued last year; or possibly a tactic to try and get another media company interested in making a higher bid. Either way it’s very risky for the Yahoo board; there are many ways this could go wrong for them and they’ll end up out of a job. Guess we’ll see on Monday.
Comment by Kevin — February 9, 2008 @ 10:56 pm PST
Y! is going (to try and) hold out for mo money, Kevin. Seems like a risky play being that the offer was fair. Y! is a public company and shareholders could revolt if they aren’t careful. This could get ugly.
Comment by TDavid — February 10, 2008 @ 8:58 am PST