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| Microsoft wants to purchase Yahoo | |||||
| By Shaun Zelber, February 2nd, 2008 :: News & Events | |||||
Microsoft has offered to buy the search engine company Yahoo for $44.6bn (£22.4bn) in cash and shares. The offer, contained in a letter to Yahoo’s board, is 62% above Yahoo’s closing share price on Thursday. Yahoo cut its revenue forecasts earlier this week and said it would have to spend an additional $300m this year trying to revive the company. It has been struggling in recent years to compete with Google, which has also been a competitor to Microsoft. In a conference call, Microsoft’s Kevin Johnson said that the combination of the two companies would create an entity that could better compete with Google. “Today the market [for online search and advertising] is increasingly dominated by one player,” he said. Yahoo confirmed that it has received an unsolicited offer and said that its board would evaluate the proposal, “carefully and promptly in the context of Yahoo’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.” If Yahoo accepted the offer, competition authorities both in the US and the European Union would be likely to investigate the tie-up. Yahoo chief executive, Jerry Yang, announced on Tuesday that he intended to lay off 1,000 staff as part of a restructuring plan. Microsoft said that Yahoo shareholders could choose to receive either cash or shares. According to its letter to Yahoo, Microsoft attempted to enter talks about a deal a year ago, but was rebuffed because Yahoo was confident about the “potential upside” presented by the reorganization and operational activities that were being put in place at the time. “A year has gone by, and the competitive situation has not improved,” Microsoft’s letter said. This is of imminent interest to us Mobile web people because both Yahoo and Microsoft are pushing to become major players in the mobile space. It is going to be interesting to see what will happen. Also Google which is make moves into the mobile space can be invigorated by all of this or to the contrary sidetracked from the mobile business. | |||||
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