Microsoft unveils bid for Yahoo at US$44.6 bln

SAN FRANCISCO: Microsoft
yesterday unveiled a hostile bid
of US$44.6 billion for Yahoo in
an effort to merge the world’s
biggest software company with a
major Internet player to take on
the Google juggernaut.
The deal could reshape the
landscape for high technology
by combining Microsoft and one
of the leading brands on the Internet.
Yahoo said it was examining
the “unsolicited proposal” and
added that its board “will
evaluate this proposal carefully
and promptly in the context of
Yahoo’s strategic plans and
pursue the best course of action
to maximise long-term value for shareholders.”
The move comes as Yahoo is
losing ground rapidly in the
Internet space to Google, the
search leader which has been able
to cash in on the growing market
for online advertising.
Microsoft said the booming
online advertising market “is
increasingly dominated by one
player” — a reference to Google
— and suggested that with Yahoo
under its wing it could better
compete in the bonanza.
Online advertising sales will
double from US$40 billion in
2007 “to nearly US$80 billion in
2010,” it forecast.
Yahoo would offer Microsoft a
search engine to compete with
Google, a popular web portal for
email, shopping and news, as well
as one of the most recognised
brands among online users.
Microsoft said a combination of
the companies would lead to cost
savings of US$1.0 billion per year.
In a letter to Yahoo’s directors,
dated Thursday and released
with its statement, Microsoft
revealed that Yahoo, based in
Sunnyvale, California, had
rebuffed earlier acquisition
overtures in February of 2007.
Microsoft said it had proposed
US$31 per share to Yahoo’s board,
“representing a total equity value
of approximately US$44.6
billion,” the statement said. The
offer represents a 62 per cent
premium above the closing price
of Yahoo stock on Thursday.
“We have great respect for
Yahoo, and together we can offer
an increasingly exciting set of
solutions for consumers,
publishers and advertisers,” said
Microsoft’s chief executive
officer Steve Ballmer. — AFP

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