Washington: Microsoft, with the reputation of being among the world’s most-hardball companies, has made a massive $44.6-billion bid to acqui...
Washington: Microsoft, with the reputation of being among the world’s most-hardball companies, has made a massive $44.6-billion bid to acquire the internet veteran Yahoo in an effort to challenge their mutual competitor, the omnipresent Google.
Microsoft’s bid comes at a time when Google has raced ahead in the ad revenue-rich search space, and Yahoo is in the doldrums. Microsoft’s unsolicited offer of $31 a Yahoo share represents a 62% premium over its closing stock price on Thursday.
Yahoo has said it will consider the offer, but most experts think the buyout will be a shoo-in, given Yahoo’s weak position arising from poor results and a four-year low stock price. The company also announced a 1,000-person lay-off this week.
If Microsoft’s bid succeeds, it will be the company’s biggest acquisition, and the biggest merger in the technology space after Time-Warner bought AOL for $180 billion in the heydays of the technology boom. Analysts expect the merger will result in a potent competitor for Google in the lucrative web search and advertising market.
Although Yahoo, founded by two Stanford graduates, was one of the first companies to popularize web searches going back to the mid-1990s, upstart Google has stormed ahead in the past few years. Microsoft evidently expects to challenge Google with Yahoo’s legacy and its managerial skills. Google’s share of the US web search market is currently estimated at 56% by Nielsen Online, compared to 17% for Yahoo and 13% for Microsoft.
The Redmond veteran’s reputation as a destroyer of companies has given rise to the motto ‘Embrace, Extend, and Extinguish’ to describe its tactics. It bought out Sabeer Bhatia’s Hotmail in the late 1990s, but failed to make it the market leader in the email space.
Microsoft’s bid comes at a time when Google has raced ahead in the ad revenue-rich search space, and Yahoo is in the doldrums. Microsoft’s unsolicited offer of $31 a Yahoo share represents a 62% premium over its closing stock price on Thursday.
Yahoo has said it will consider the offer, but most experts think the buyout will be a shoo-in, given Yahoo’s weak position arising from poor results and a four-year low stock price. The company also announced a 1,000-person lay-off this week.
If Microsoft’s bid succeeds, it will be the company’s biggest acquisition, and the biggest merger in the technology space after Time-Warner bought AOL for $180 billion in the heydays of the technology boom. Analysts expect the merger will result in a potent competitor for Google in the lucrative web search and advertising market.
Although Yahoo, founded by two Stanford graduates, was one of the first companies to popularize web searches going back to the mid-1990s, upstart Google has stormed ahead in the past few years. Microsoft evidently expects to challenge Google with Yahoo’s legacy and its managerial skills. Google’s share of the US web search market is currently estimated at 56% by Nielsen Online, compared to 17% for Yahoo and 13% for Microsoft.
The Redmond veteran’s reputation as a destroyer of companies has given rise to the motto ‘Embrace, Extend, and Extinguish’ to describe its tactics. It bought out Sabeer Bhatia’s Hotmail in the late 1990s, but failed to make it the market leader in the email space.
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