Microsoft says it would pay $44.6 billion of search engine giant Yahoo — if Yahoo takes the deal. The unsolicited bid would be worth $31 per share — 62% more than the company’s Thursday closing price. In pre-market trading, Yahoo shot up, while MSFT slumped somewhat. Microsoft made a similar attempt a year ago, but Yahoo rebuffed them because they thought their company was going in the right direction. Now, in a letter to Yahoo, Microsoft execs say “A year has gone by, and the competitive situation has not improved.”
Update by Cory: Yahoo promises to “evaluate this proposal carefully and promptly.” The last week has been a busy one for Yahoo. CEO Jerry Yang said “profound changes” are on the way for the company, which includes 1,000 layoffs. And Yahoo Chairman Terry Semel resigned last night, just prior to Microsoft’s announcement. On a conference call this morning, Microsoft was asked what would happen with Yahoo’s brand if the deal went through. “We love the Yahoo brand,” said Microsoft’s Kevin Johnson. “We want to have clear integration principles and a joint leadership team of Microsoft leaders and Yahoo leaders to really work through the thoughtful process of how you land the specifics on this. We’ve got clear line of site to the synergies and the value creation we’re going to unlock.”
ClickZ does a good job boiling this all down. “The ultimate goal from Microsoft’s point of view is to morph the two firms’ search indexes and ad platforms to reduce redundancies in support systems, improve efficiency, and ramp up publisher yield and ad inventory to a potentially massive scale for advertisers.” It’s all about search, folks.
Explains Staci Kramer in PaidContent: “It is, as I just heard Andrew Ross Sorkin put it, ‘Murdoch-ian’ —an offer that you might think would be nearly impossible to refuse or to nudge higher, although folks are already hard at work looking for an extra few dollars.”
- Microsoft’s press release on the unsolicited bid
- Microsoft’s Powerpoint presentation used on the conference call
