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Microsoft Makes Bid for Yahoo

Category: General News
Posted: 02:11PM
Author:


ComputerWorld -

Microsoft yesterday made an unsolicited offer to buy Yahoo for $44.6 billion.  There has been much talk over the last year or so about the possibility although Yahoo's board was reportedly cool on the idea.  That all changed as Microsoft CEO Steve Ballmer presented the offer to Yahoo.  The deal represents a fairly substantial premium over the final price at yesterday's market close and is to be made in a combination of cash and stock.  Yahoo's stock price was up over 50% before the market opened this morning based on the news.  Microsoft wants to combine the search and advertising Yahoo offers to better do battle with Google.  With the online advertising market being increasingly dominated by the search giant, Microsoft expects to be able to recognize greater economies of scale through the merger while reducing costs by over $1 billion through the combined efforts of the two companies.  Even if the deal goes through, Google's share of the search and online advertising market exceeds that of Microsoft and Yahoo combined, which presumably would eliminate Google from making a counter offer for Yahoo because of anitrust concerns.



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