Microsoft Bids on Yahoo: What to Expect from a Takeover
What a Microsoft, Yahoo Merger Means
Earlier today Yahoo stock rose 46 percent to $27.98 and Microsoft dropped 5.4 percent to $30.85."The offer of $31 a share represents a 62% premium over Yahoo's closing price Thursday," according to CNN.money.
As the stock market reacted less reverently than expected, following discouraging economic news, it is economic concerns that makes this Microsoft proposal viable.
Yahoo suffered significant losses in 2007, as did many tech stocks. Acquisitions are on the rise and the future is less certain. Microsoft may apply more pressure and increase the bid a bit, but it's speculated that Yahoo will ultimately concede.
Why Microsoft Needs Yahoo
Microsoft needs Yahoo to compete in today's search engine and social networking economy, deemed Web 2.0. Advertising revenue is what Microsoft covets and Yahoo can deliver.
While Microsoft has the brains and technology, it lacks cultural savvy and inspiration - two of Yahoo's premiere talents.
Had Microsoft kept its '90s pace, the topography of the Internet may be considerably different today, though a Microsoft-Yahoo merger now may yet alter the landscape.
What a Microsoft-Yahoo Merger Means for Consumers: Microhoo!
Individuals without a financial, technological or social interest in the Internet may be affected only marginally, if at all, at least initially.
Others will have concerns with competing products, which may be changed or integrated, not limited to search, e-mail, messaging, ad servers, and maps.
Will we see a Yahoo Live Search? If we do, dissatisfied opponents of Microsoft Live technology may indeed go to Google for search, if not other services.
Small business, online vendors and Google Adsense earners may ultimately need to finesse their marketing efforts, though tighter competition may bring better ad pricing.
The Future - Stocks and Technology
What makes the merger of the arch enemies fantastic to consider is that Microsoft could conceivable re-emerge from its coma. While it is unlikely that Google will fall from grace as the number one search engine, the economy and this merger are viable threats.
Some stockholders may find this a second golden re-entry opportunity for Microsoft, but it is unlikely that Microsoft will see revolutionary success soon.
Yahoo stock holders are justifiably worried. Google may benefit during post-merger trauma and chaos. Tech stock veterans who understand the impact of Internet culture, and clashes, may offer the most sage financial advice.
Sources:
Forbes (http://www.forbes.com/markets/feeds/afx/2008/02/01/afx4603517.html), Odds of Microsoft's bid for Yahoo being successful over 80% -- Stifel Nicolaus
Bloomberg (http://www.bloomberg.com/apps/news?pid=20601087&sid=azoHG5ipaoOI&refer=home), Microsoft's Yahoo Bid May Signal Rebound in Takeovers
CNN.money (http://money.cnn.com/2008/02/01/markets/markets_morning/?postversion=2008020111), Wall Street gives up gains
Salon (http://www.salon.com/tech/htww/2008/02/01/microsoft_yahoo/index.html), Why Microsoft's bid for Yahoo is an act of surrender.
Published by Donna Porter
Writer / Journalist -- A Yahoo News! Contributor Donna began her writing and internet career in 1995 in the health industry and became an early dot-com entrepreneur soon after. Masters certified in Internet... View profile
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60 Comments
Post a CommentGreat write up, Donna! Nothing fuel innovation like a healthy competition, ay? :o)
This will be interesting as to how this turns out.
Great read! Sorry I didn't see it earlier.
Critical write, Donna. The MS-Yahoo merger (acquisition/hostile takeover) is much bigger, even, that it seems. We're talking global, here, We're talking 21st Century communications, here. We're talking America, here. And, way down in the jumble, we're talking Associated Content - and writing. Michael
Great article. I'm glad that Yahoo turned down the offer. Thanks for the info.
Interesting speculation. Good reporting on this developing story. Thanks.
Interesting and informative - great article!
I didn't even know! Thank Donna for this article! Good thing I'm too poor to invest huh? LOL
Great reporting on this. Can't wait to see what happens.
Great reporting. Microhoo! I'm afraid that's what the future may hold. Maybe, as you said, there will be better ad pricing because of the competition between the internet giants. Very informative.