Well it took a while but after two-years of negotiations and at least one previously rejected offer, Microsoft today announced a $44.6 billion bid to takeover Yahoo at $31 per share, a hefty 62% premium over yesterday's close for Yahoo of $19.18.
A combined Microsoft-Yahoo would supposedly be able to compete with Google for leadership of the Internet marketing industry. Microsoft's engineering and Yahoo's brand and traffic make for a juicy combination, but merging the two cultures and Internet businesses will not be easy. You should have no trouble finding tons of articles on the Web on this today, here's a short one that sums up the numbers at ClickZ and an article discussing the challenges from the New York Times.
The Czar's Quick Take: This was inevitable as they have been talking for quite a while and also shows how far they are lagging behind Google in search and monetizing web traffic. For example, Yahoo's Panama search platform (for their pay-per-click Yahoo Sponsored Search program) was over a year late and over budget. Microsoft was very late getting into the search game and their web advertising solutions have not been very innovative.
It looks a lot like mixing oil and water to me, as the firms have different cultures and there aren't nearly as many synergies and cost saving as say when two banks or airlines merge. We'll see.
If you have a take, please post a comment!
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