Microsoft bids $44.6B for flailing Internet portal Yahoo
REDMOND, Wash. -- Yahoo's senior executives and board of directors played coy, issuing a statement that the company "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."
"We've made a great offer to Yahoo shareholders and we respect the fact that their management and board have a lot to consider," said Kevin Johnson, Microsoft's president of platform and services, in an interview. "Our strong preference is working collaboratively with Yahoo."
But in conference call Friday morning, Microsoft Chief Executive Steve Ballmer indicated he won't take no for an answer after Yahoo rebuffed takeover overtures a year ago.
"This is a decision we have — and I have — thought long and hard about," Ballmer said. "We are confident it's the right path for Microsoft and Yahoo."
Microsoft's offer of $31 a share for Yahoo stock — a 62% premium to Yahoo's closing stock price Thursday — should get the attention of disgruntled Yahoo shareholders. Yahoo's share price dropped to a four-year low earlier this week, and a new management team has not said much publicly about how they intend to compete against Microsoft and Google through 2008.
The announcement lifted Yahoo's share price by almost 50% in morning trading, while Google fell more than 8%, dragged down by a fourth-quarter earnings report that missed Wall Street expectations.
"Microsoft's MSN properties and Yahoo are very similar, and Yahoo makes wide use of Microsoft technology, so the merger technically shouldn't be that difficult," says tech analyst Rob Enderle, of the Enderle Group. The merger could make the combined companies "a force to be reckoned with and prevent Google for obtaining nearly unlimited monopoly power," he says.
