Microsoft wants to purchase Yahoo
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Microsoft offers to buy the search engine company Yahoo for $44.6bn in cash and shares.
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Microsoft said&#160;its $44.6 billion offer to purchase Yahoo&#160;is &quot;fair&quot; and hinted that it may pursue a hostile takeover of the Internet company, according to a statement Microsoft made Monday in response to&#160;Yahoo&#39;s formal rejection of its buyout offer.In a statement, Microsoft said it&#39;s &quot;unfortunate&quot; that Yahoo &quot;has not embraced&quot; its proposal to combine the two companies, and the rejection of the offer &quot;does not change our belief in the strategic and financial merits of our proposal.&quot;The company also hinted that it may take the offer directly to Yahoo&#39;s shareholders, a move that could result in a hostile takeover.&quot;As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo&#39;s shareholders are provided with the opportunity to realize the value inherent in our proposal,&quot; Microsoft said in its statement.Earlier Monday, Yahoo formally rejected Microsoft&#39;s bid to acquire the company in a half-stock/half-cash purchase, saying it undervalued Yahoo.On Feb. 1, Microsoft offered to pay $31 per share for half of Yahoo&#39;s outstanding shares in cash -- about $22.3 billion -- and 0.9509 of a Microsoft share for the other half. Microsoft&#39;s half-cash/half-stock offer to Yahoo was valued at about $44.6 billion at the time it was made; Yahoo&#39;s share price was $19.18 at the time.However, since then Microsoft&#39;s stock has gone down while Yahoo&#39;s has risen, making the deal, under its current terms, worth less than when it was originally offered. This led to speculation that Yahoo might look for other suitors; the company is reportedly looking for about $40 per share. Yahoo&#39;s share price closed at $29.87 Monday; Microsoft&#39;s closed at $28.21.Some have speculated that Microsoft would raise its offer to the company to about $35 per share -- about midway between its original offer and Yahoo&#39;s target price -- but in its statement on Monday, the company seemed adamant about keeping the offer as it stands.&quot;We are offering shareholders superior value and the opportunity to participate in the upside of the combined company,&quot; Microsoft said. &quot;Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties.&quot;Microsoft&#39;s offer to purchase Yahoo is an attempt to join forces and improve both companies&#39; positions against Google in online advertising and services. However, many questioned both the logistical complexity and cultural differences involved in combining the companies, and there are fears that it will thwart rather than help their efforts to compete with Google.Yahoo is reportedly in talks with both AOL and Google to try to avoid being acquired by Microsoft. Analysts said Monday that Yahoo&#39;s initial rejection of the offer is more of an attempt to elicit a higher bid -- either from Microsoft or another company. If none comes, the company might decide in the future to accept Microsoft&#39;s offer as it stands, they said.
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Microsoft Friday unveiled a bid of 44.6 billion dollars for Yahoo in an effort to merge the world's biggest software company with a major Internet player to take on the Google juggernaut.
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Microsoft has offered to buy Yahoo for $44.6 billion -- but how did a company that started so small come to be worth so much? That's a story that began in the early days of the World Wide Web, when people were struggling to keep track of the new world of multimedia it offered them.
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Microsoft has offered to buy Yahoo for around $44.6 billion in cash and shares, to better compete with Google in the market for online services.The market for online advertising is increasingly dominated by one player, Microsoft said, and merging with Yahoo will allow it to offer a competitive alternative.Microsoft expects the market for online advertising to almost double in size over the next three years, from $40 billion in 2007 to $80 billion by 2010. A merger will allow it to realize economies of scale and reduce capital costs as it addresses this market, it said.&quot;The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our own,&quot; said Ray Ozzie, chief software architect at Microsoft, in a statement.Microsoft expects to cut costs by $1 billion a year by realizing synergies with Yahoo in four areas: obtaining economies of scale as its audience increases; combining its research and development efforts with Yahoo&#39;s to innovate faster; eliminating operational redundancy to cut costs, and pooling expertise to innovate in video and mobile.The companies will work together to develop the merger plan, Microsoft said.It intends to pay key Yahoo engineers and other staff to stay following the merger.The offer represents a 62 percent premium over Yahoo&#39;s closing price on Thursday. Microsoft expects to receive all necessary approvals in the second half of this year.
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Privacy groups are promising a fight before U.S. regulatory agencies if&#160;Microsoft&#39;s offer to buy Yahoo&#160;for $44.6 billion is accepted, and the deal could face significant hurdles in Europe as well.Microsoft announced that it&#160;sent an offer to Yahoo&#39;s board of directors&#160;on Thursday, going public with the news Friday morning. Immediately, the executive directors of the Center for Digital Democracy (CDD) and the Electronic Privacy Information Center (EPIC) said the acquisition would raise serious privacy concerns.CDD will press the U.S. Department of Justice, the Federal Trade Commission and Congress to &quot;scrutinize this deal and impose the needed safeguards for it -- and the industry,&quot; said Jeffrey Chester, CDD&#39;s executive director. CDD and EPIC tried to stop Google&#39;s proposed acquisition of online ad service DoubleClick on privacy grounds before the FTC last year, but the FTC approved the deal in December.The Microsoft-Yahoo deal, if consummated, would &quot;create a powerful interactive Internet duopoly in online media,&quot; Chester said. &quot;Google and Microsoft will have inordinate power to shape the online communications marketplace, including journalism, entertainment and advertising. There are consequences to democratic societies everywhere, as two digital gatekeepers are likely to control how the Internet and other interactive media evolve.&quot;The proposed deal also underscores a need for new laws or regulations that protect consumer data, Chester added. &quot;In an era when individuals are increasingly conducting their personal, social and political lives online, the corporations that control the digital experience will have a far-reaching influence over every aspect of society,&quot; he said. &quot;Consumers will be more vulnerable to having their personal information become the property of the GoogleClick&#39;s and Microhoo&#39;s.&quot;But the DOJ and FTC may have little grounds to oppose a Microsoft/Yahoo merger, said Professor Keith Hylton, who specializes in antitrust issues at the Boston University law school. While Microsoft and Yahoo compete in some areas, Microsoft could argue this a &quot;vertical&quot; merger that largely expands its online services, but largely doesn&#39;t eliminate competition, he said.&quot;I think Microsoft is trying to ramp up in the online services/online ad revenue business,&quot; Hylton said. &quot;Microsoft is a small player in that area, and Google is a big player. This is a merger of two firms trying to compete against a big monster out there -- Google.&quot;But the deal could face more hurdles in Europe. If the deal allows Microsoft to take components of Windows online, and &quot;in the process increases Microsoft&#39;s dominance of the market for PC operating systems,&quot; then the European Commission would have to prohibit the deal, said an antitrust lawyer in Europe who asked not to be identified.European Union merger rules prohibit dominant companies from increasing their dominance, the lawyer said.The combined company would likely have sell off an instant-messaging service, added a European Commission official familiar with the competition department. &quot;I can&#39;t see how Microsoft/Yahoo would be allowed to keep both instant-messaging services,&quot; said the official, who also asked not to be identified.Microsoft campaigned for federal regulators to block the Google-DoubleClick deal, partly on antitrust grounds. But Google argued the acquisition would join two companies operating in different online markets.This week, Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia extended antitrust scrutiny of Microsoft for two years. But the U.S. government&#39;s antitrust case against Microsoft was based on its desktop and server operating systems, not online services. If anything, the old antitrust case could help Microsoft make the case for approval of its acquisition of Yahoo, Hylton said.&quot;I assume Microsoft people can say, &#39;Look, we&#39;re already under a microscope, doesn&#39;t this suggest we&#39;re less likely to do anticompetitive things?&#39;&quot; Hylton said.But a consolidating online market means users will have their data held by a small number of companies, said Professor Joseph Turow, at University of Pennsylvania school of communication.&quot;Microsoft&#39;s decision to buy Yahoo is a direct result of the decision by the FTC to allow Google to purchase DoubleClick,&quot; he said. &quot;It is further evidence that despite the appearance of unlimited choice in the new media environment, people&#39;s activities will be tracked and shaped by a very small number of companies who care far more about surveillance and targeted advertising than the public interest.&quot;The public needs to demand privacy scrutiny in the proposed deal, he said. &quot;The federal government, which should have been the guardian of the public interest, has dropped the ball.&quot;(Additional reporting by Paul Meller in Brussels.)
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More competition courtesy of the proposed Microsoft-Yahoo! combo?
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A chorus of Wall Street analysts are urging Yahoo to take the deal, now that it's clear no other buyers are really emerging. But they're also saying it's time for Microsoft to raise its original offer for Yahoo in order to make it happen.
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Microsoft is trying to force Yahoo into a merger so that the two companies together will have a better chance of tackling Google.
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Microsoft may end up having to raise the amount it is willing to pay for Yahoo if the software company&#39;s stock continues to drop while Yahoo&#39;s continues to rise.
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InfoWorld - Microsoft has offered to buy Yahoo for around $44.6 billion in cash and shares, to better compete with Google in the market for online services.
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Yahoo Inc's   second-biggest shareholder urged Microsoft Corp  to  raise its $42 billion bid for the Web pioneer and warned Yahoo  it has few options other than to accept, raising pressure for  them to seal a deal.
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Believe it or not, Microsoft isn't really serious in its bid to buy Yahoo, according to one financial analyst, who says the proposal is really just a ploy to fend off a potential deal between Yahoo and Amazon. Could he possibly be right? Probably not.
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Microsoft's proposal to buy Yahoo for $44.6 billion raises many questions. Will Yahoo accept the offer? Can Microsoft win the approval of antitrust authorities in the United States and the European Union? Can the company digest an acquisition this large without suffering an AOL-Time Warner-like...
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Yahoo Inc's board of directors is to  meet on Friday to discuss Microsoft Corp's $44.6 billion buyout  offer, the TechCrunch blog said, citing unnamed sources.
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Microsoft may end up having to raise the amount it is willing to pay for Yahoo if the software company&#39;s stock continues to drop while Yahoo&#39;s continues to rise.In the week since&#160;Microsoft made its surprise bid for Yahoo, the price Microsoft is willing to offer the Internet company has dropped by nearly 7 percent as Microsoft&#39;s share price has fallen. In the meantime, Yahoo&#39;s shares have risen in value, trading at nearly the $31 per share Microsoft was willing to pay, making the company potentially worth a higher asking price and the offer vulnerable to higher bids.Microsoft announced its offer to acquire Yahoo on Feb. 1, saying it would pay $31 for half of Yahoo&#39;s outstanding shares and 0.9509 of a Microsoft share for the other half. Microsoft&#39;s half-cash/half-stock offer to Yahoo was valued at about $44.6 billion at the time it was made.The stock half was based on the $32.60 Microsoft share price at the end of Thursday, the day before the deal was announced last Friday. Yahoo&#39;s share price at the close of market on Jan. 31 was $19.18. The cash half of the deal was $22.3 billion, which, when considering Microsoft agreed to pay $31 per share, is based on half of Yahoo&#39;s outstanding shares being 719,354,838.Microsoft has not publicly said what number of outstanding shares it has based its offer price on. In its form 10-Q filed Nov. 9, 2007, Yahoo&#39;s outstanding shares as of Oct. 31, 2007, were 1,336,444,034. However, cutting that number in half and multiplying it by Microsoft&#39;s $31 per-share offer adds up to $20.7 billion, not the $22.3 billion in cash Microsoft is offering.By Friday afternoon, Microsoft&#39;s share price was down about 12 percent at $28.40. Based on that price and assuming that 719,354,838 is the other half of Yahoo&#39;s outstanding shares -- and then factoring in the $22.3 billion cash offer -- the amount of the bid stands at $41.7 billion.Microsoft&#39;s stock is likely down due to its offer for a number of reasons, said a financial analyst who was interviewed Friday and asked not to be named. Investors may not be happy with the money Microsoft is willing to pay for Yahoo, and&#160;strategic questions surrounding how the companies will pull off a merger&#160;successfully also are driving the stock down.Moreover, the deal is expected to dilute Microsoft&#39;s earnings in fiscal 2009 and perhaps even in fiscal 2010, so the company&#39;s earnings predictions likely will come down, the analyst said.On the other hand, Yahoo&#39;s stock has been buoyed by speculation there could be other, higher bidders for the company now that Microsoft has shown its hand. Yahoo stock has risen nearly 34 percent since the deal was announced; on Friday afternoon it was trading at nearly $29, which is only slightly lower than the current per-share for the stock half of Microsoft&#39;s offer.Microsoft has declined to comment about whether it will adjust its offer so that the final amount of the deal will be the original $44.6 billion offered. The cash half for the time being remains the same, sources close to the company said Friday. However, this could change in last-minute dealings if Microsoft&#39;s stock continues to lose value while Yahoo&#39;s rises, and other companies offer competitive bids for Yahoo in the meantime.
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'We've been engaged for months' !!! Steve Ballmer all but confirmed that Microsoft wanted to buy Yahoo! for scale, branding and audience rather than any technology or products the web media co owns.â¦