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Friday, February 1, 2008

Personal Finance QuickTake: Microsoft to Buy Yahoo

Microsoft made an unsolicited $44.6 Billion bid for Yahoo today. Yahoo's stock has been weak lately as they continue to lose market share to Google and have failed to take advantage of internet advertising.

Microsoft's surprise offer of $31 per share is a 61% premium on where Yahoo's stock ended the day before.

For a while now it has felt like to me that Yahoo lost it's way. A few years ago they had the chance to buy Google for $2 Billion and passed it up, deciding to be a media company that had search as opposed to a search company that was expanding.

Google really had out maneuvered Yahoo, snapping up YouTube, creating and mastering AdSense, buying Blogger and Feedburner. Microsoft, with MSN has never been a serious competitor, but they do have deep pockets and are good at identifying niches that they want to grab market share with. This would be the largest acquisition in Microsoft history!

I think this is a great marriage if it happens, and the stockholders are going to demand it does! This really gives the web community a Pepsi to Googles Coke.

I am NOT anti-Google as I noticed I was sounding a bit, but without competition companies get complacent and innovations slow. I look forward to see what can happen with a strong competitor!

(photo by Reuters)


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