Tuesday, February 19, 2008

Yahoo May Have Dodged the Microsoft Bullet

A few weeks ago, Microsoft fired a shot at Yahoo!, rattling their sabres at the same time, and indicating that they fully intended to buy Yahoo!

Since then, Google has offered to help in any way they could, albeit short of buying Yahoo! as that would be a merger that would never pass anti-trust muster. Rupert Murdoch's Newscorp also stepped in, renewing talks with Yahoo! regarding possible joint ventures or a merger.

And if these efforts weren't enough, Microsoft's stock has fallen 13%, reducing the cash and stock offer from its original $44.6 billion value to about $41 billion.

No one, outside of the Microsoft campus, seemed to want to see Yahoo! fall in Microsoft's hands. Many observers expected Microsoft to sweeten the pot, but now, based on statements made by Bill Gates, it appears Microsoft is moving on.

A story appearing on Reuters indicates that Gates has no intention of increasing their bid, saying Microsoft's offer is "very fair" and "We can afford to make big investments in the engineering and marketing that needs to get done. We will do that with or without Yahoo!."

Since Yahoo! has already rejected the original offer, and the deal is now worth less due to Microsoft's stock valuation, it looks like Microsoft is moving on and Yahoo! is safe for the time being.

Of course, that doesn't mean that Newscorp might not continue its pursuit of Yahoo!

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