Microsoft Offer to Buy Yahoo! for $44.6 billion

Filed in: Microsoft, Yahoo! — February 2nd, 2008

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MicrosoftMicrosoft made an offer to acquire Yahoo! for $44.6 billion USD cash and stock on Feb 1, 2008.

Microsoft offers to pay Yahoo! shareholders $31 a share, which represents a 62% premium from where Yahoo stock closed on Thursday.

“We are very, very confident this is the right path for Microsoft and for Yahoo!,” said Steve Ballmer, Microsoft’s chief executive.

Microsoft allows the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock. Yahoo has acknowledged receipt of the offer and its board would evaluate the proposal “carefully and promptly”.

According to comScore, Google owns over 58.4% of the U.S. market, Yahoo has 22.9% and Microsoft is only 9.8%.

Yahoo! has a hard time this year and plans 1,000 job cuts in February 2008. The total returns of Yahoo dropped 32% in 2007.

More related news:

[via CNNMoney]

Will Microsoft and Yahoo merged? What do you think?

Updated: “Now Yahoo is scrambling to figure out a response to the overture, but is looking for any other option but Microsoft.” [via AllThingsDigital]

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  • wow......this is big......this is not very good news...I would prefer 3 way war....in case two guys decided to work together.
  • Another cunning ploy of Microsoft. So I guess the name will be changed to "MicroHoo" or "YaMic". :D
  • Ash
    I think if the acquisition happens, it will benefit Microsoft more than Yahoo. Yahoo should look around for other players before saying yes to Microsoft. Microsoft needs Yahoo more. That's why they are willing to pay $44 billion. Do we know of any other company that is able to pay such a large sum of money? Google I suppose!!!
  • big enuff for us malaysian. :o
  • big! very big number! i cant wait for the result
  • This is a wise move by Microsoft as in internet world either you are BIG or you are out.
  • Don't forget that theres always a bigger fish.
  • That gives some serious thinking for google to do. Its a good deal for microsoft but i am very interested to see what happens in upcoming months. will Google do anything about it?
  • stevewy
    why buying a company for 44.6 billion just because they wanted to compete against google?

    if im google, with the current strong IT team, i think its possible to develope new google operating system to fight against MS liaw...

    Syahid A:
    fast fast pergi register domain name “MicroHoo” or “YaMic” lohh...maybe billy gates wana buy frm u offering 44.6billion...ringgit :p
  • It's a technology war in year 2008!

    --blog for dream--
  • is there any benefit for me from the deal

    i only use bloggers...

    somebody update me
  • hmm at least Uncle G's monopoly will face new competition :)
    and maybe YMC will bring new source of income hopefully
  • This is going to be a big hit, keep us posted liewcf.
  • Interesting to know the outcome. I don't think this will be big threat to Google anyway.
  • good move for microsoft and also yahoo share holder....i dont know what will happened if only two big players left in this industry...can you all tell you imagination to me...
  • :( arhhhhhhhhhhhh!!!!!! microsoft better hands off my beloved flickr.com!!!!!!!!................... fu*k off microsoft!!!!!!!!!!
  • rem
    yerp.steve balmer even said they are on track! dem,they are very serious considering buying yahoo.i hope that wont happen.now we have msn-google-yahoo.imagine later on we only have google as the ONLY rival to microsoft.oh no!~
  • I thought I read somewhere they already rejected the offer. They said the offer $ underestimate them. :)
  • Yes the offer was rejected, my guess is that this is only the beginning of the courtship by Microsoft.

    Both Yahoo & MSN cannot compete with Google individually and Yahoo is worth far more to Microsoft than $44bil. But even combined, they don't have a product to counter Google Adwords.
  • Mr. Bear
    I think ms might offer even more to buy yahoo soon. I do agree that MS offered too little for the yahoo founder/investors to give up so much.

    No harm for M$ to offer 10x more for yahoo in consideration of the latter potential and future earnings.

    Unless of course the purpose was to get rid of yahoo. Buy it and remove it.
  • If I were MS, I won't buy yahoo at all. As Larry said, even if they combined, they can't compete with Google as well. May as well use the money for other stuff (e.g. hire more creative ppl to implement more creative products).
  • Hi ChampDog, from my research it sems that Yahoo is market leader in the so-called Display Ads segment (ie banner & flash/multimedia ads). If combined with MSN they are a powerful force. There is a post on my blog about this:

    http://www.netallianz.com/gallery/2008/02/09/on...

    The MS move is more an aggressive than defensive one. They are trying to block off Google in a fast growing area. Meanwhile Google is experiencing slow down in Adwords growth, which may explain why a lot of publishers are complaining about declining Adsense PPC ;)
  • Throughout the past two years Google has been on a huge exapnsion drive. Microsoft has realised this and instead of attempting to but up smaller entities it has just decided to grab the biggest fish - Yahoo.

    I guess its time to show Google who is the bigger cat in this business
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