Microsoft offers to buy Yahoo! for £22.4bn
Microsoft has offered to buy Yahoo! for a massive $44.6 billion (£22.4 billion).
"This proposal represents a compelling value realization event for your shareholders," said Steve Ballmer, Microsoft's chief executive, in a letter sent to Yahoo's board on Thursday.
The offer doesn't come as much of a surprise, given the rumours that have been circulating since May 2006, even though when the rumours resurfaced a year later, Microsoft was quick to quash them.
In the last year, Yahoo! has really struggled in an online market largely dominated by Google and during that period its share price dropping almost 32 percent. Microsoft has also been struggling to put the fight to Google, so it seemed increasingly likely that the two might team up to create the Internet giant's most formidable competitor to date.
The European Commission, the watchdog that is currently investigating Microsoft on antitrust charges relating to various technologies and products the company ties into Windows, refused to comment on the move.
"We have no comment," said Jonathan Todd, a spokesman for EU Competition Commissioner Neelie Kroes. Regardless, with a deal of this magnitude, there's no question that it would require European Commission clearance before it went ahead.
Just last night, Terry Semel, non-executive chairman of Yahoo! stepped down from the board of directors - he will be replaced by Roy Bostock. "Terry Semel has been a great partner and true friend, and has played a key role in helping to grow Yahoo!'s business - and industry-leading audience - over the past seven years," said Yang. "He also has been a tremendously valuable resource in recent months, as our new management team developed and began to execute our strategic growth plans. On behalf of the entire Board, I want to thank Terry for his many contributions to Yahoo! over the years - and for helping to lay a firm foundation for future success and improved financial performance."
Update 14:00 GMT
Yahoo! has just acknowledged the receipt of the offer from Microsoft in a statement that says "[Yahoo!'s] Board of Directors will evaluate this 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."
What do you think about the offer? Do you think it'll go through? Speculate away in the forums!
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25 Comments
Discuss in the forums Replywhat idiot at ms thought yahoo would be worth that much?
the news they publish are copy pastes from reuters and other media agencies (just like the stuff on any news website / newspaper / tv), the search engine, anyone ever used it? no. sure, there is some advertiment income from the add's that are plastered all over, but i dont think that makes it worth more than one Quid.
Could be a good move. The two nearest competitiors to Google teaming up to take it on? Should be some interesting results!
yahoo is used for the free email function which has plenty of ad's that generate income, but what else is used?
the search function has how much market share compared to google? prolly less than linux compared to windows.
Still, £22.4bn is just a crazy amount of money that I just can't quantify.
Thats quiet a lot of money, obviously Windows is selling well enough for MS to warrant a large purchase, i was hoping though that MS would by Switzerland (Zero Punctuation Halo 3 Review heh) haha
Sam
"MS is an amoeba" :D
Delicious
Flickr
etc.
But it's wort around 1/3 of what Google is worth? Errr... somebody else smells that internet hype again that already blew up once a few years ago? They're just going insane about whatever is on the internet nowadays IMHO.
Sigh, i dont want to change email providers :(
you hit the nail on the head. When people read this they don't think of all the other sites that fall under the yahoo umbrella. i agree this is kinda high but not completely insane considering the user base yahoo has when you include all the sites they own.
Yahoo doesnt own wordpress do they?
Can you really go wrong when you've the money to buy pretty much anything you want?
Some countries would like a GDP that high!
hah, i don't even know what those are o_o
looks like microsoft might finally get a piece of the asian action, i know Yahoo is quite big in Japan and China (no penis jokes please )
Still, though. "In the best interest of the shareholders?" being a part of Microsoft makes it hard to lose.
I'm pretty sure that by this point, Microsoft's bank account reads as $/£ ∞
According to Wikipedia Microsoft made $14.06 billion profit in 2007 so this may be almost 2 years worth of profit to buy Yahoo. Anybody have any figures on how much Microsoft has in their bank?
lol! too true.
I'm actually a little scared by this, feels like the internet is getting smaller! Also a little bit worrying, its major companies like Microsoft and Google that keep the internet going, is the town really big enough for both to justify throwing in such phenomenal sums of money? I'm aware Microsoft's main revenue streams aren't internet based, but thats my point, what if they turn tail when this goes horribly wrong and they have to write $6bn in value? (ala 900m write down on ebays purchase of skype) what if the internet as we know it collaspses and it becomes googlenet and microexchange? No fun here ladies and gentleman, get your things and keep moving.
"press start to launch the search"
or various error messages would put me of
yahoo please team up with the linux community!