The Next Web

So what’s the latest on Microsoft and Yahoo?

Written on February 4, 2008 – 12:07 pm
Ernst-Jan Pfauth, editor in chief

As Scott Karp from Publishing 2.0 stated two days ago, not writing about the bid of Microsoft on Yahoo means losing the ‘media/tech blogger license’. Yet since Boris already wrote an thorough analysis about the possible deal on The Next Web Blog, I prefer to just give you an update on the latest developments.

Google Alliance
Yesterday a source familiar with Yahoo’s strategy said that the company is considering a business alliance with Google ‘as a way to rebuff a $44.6 billion takeover proposal by Microsoft’.
Read more on Reuters

Poison Pill
Microsoft may end up disappointed since Yahoo has some defense at its disposal should Microsoft’s bid turn hostile. In 2001 the tech company adopted a poison pill. This is a defense mechanism that makes an offer incredibly expensive by giving shareholders the right to to convert their shares into a large number of common shares.
Read more on Yahoo News

Google’s Reaction
This is actually funny, Google is desperately holding on to their ‘do no evil’ credo, even when it comes to.. competition. The pot calls the kettle black.
Read more on Google’s blog

Microsoft reacts to Google
Microsoft responded quickly on Google’s accusation. General Counsel Brad Smith said: “The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and on-line advertising.”
Read more on TechCrunch

Eleven dreams and nightmares
If one giant tries to take over another giant, everybody starts fantasizing about what this might cause. So does one of America’s largest newspapers.
Read more on The Washington Post

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acquire, Billion offer, google, Microsoft, yahoo

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Microsoft offers $44.6 Billion for Yahoo & why Yahoo will accept

Written on February 1, 2008 – 2:15 pm
Boris Veldhuijzen van Zanten,

Everybody is talking about it: Microsoft today made an offer to buy Yahoo for 44.6 Billion. Just last week we discussed buying some options for Yahoo because its stock was trading around 20 dollars. Now the web is buzzing with the news.

We heard the news while attending a Lunch2.0 at eBuddy. Several phones suddenly started beeping buzzing and ringing and suddenly eBuddy CEO Onno Bakker brought up Yahoo Finance on the big monitor where seconds ago we were still looking at a presentation. Its main headline was “Microsoft Offers $44.6B for Yahoo“. Within seconds everybody was talking about it. One entrepreneur told me “Just imagining Microsoft owning Yahoo gives me goosebumps. I don’t like it at all”. Others were less negative and pointed out the benefits of strong competition for Google.

Patrick pointed out that we heard similar (but wrong) rumors while we visited Yahoo Brickhouse in San Francisco last year where they told us to just ignore it. Inside Yahoo they called it ‘the dance’. They explained that every year Yahoo and Microsoft people get together to talk about working together which always lead to rumors but never turned out to be anything.

Based on that story I’m assuming this public offer by Microsoft is actually the result of extensive talks between Microsoft and Yahoo. The Yahoo Finance story speaks of a ’surprise offer’ but since we know Microsoft and Yahoo have been getting together regularly in the past few years this probably isn’t really that much of a surprise to Yahoo. It also is hard to imagine that Microsoft would make such a bold public offer if it didn’t already know the answer.

My prediction: Yahoo will resist a little, put up a little fight and then give in and accept the offer.

acquire, Billion offer, Microsoft, yahoo

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