| The world's largest software manufacturer Microsoft made its intentions known to acquire Yahoo for 44.6 billion dollars in cash and stocks. It is 62 percent more than the market value of Yahoo. Analysts have already termed the offer price excessive and the Yahoo stock price increased by 60 percent.
Approximately a year ago, the company Yahoo refused to merge with Microsoft, but Bill Gates's company, nevertheless, decided to once again make an attempt. Probably, Microsoft hopes for success this time around for the reason that, Yahoo is going through a trying period because of the huge competition from Google. Yahoo is second on the popularity list of search engines in the world and its creators offer various services, combined with Internet-portals.
Microsoft informed, that it offered 31 dollars for the share of Yahoo. Thus, premium constitutes 62 percent of the closing price at the stock exchange Nasdaq on Thursday. Immediately after the announcement, stocks of Yahoo increased by more than 60 percent and crossed the 30 dollars mark.
The acquisition (takeover) offer was already informed to the board of directors of Yahoo, Bill Gates's company suggests to pay off in cash or in exchange of stocks. In 2007, the net profit of Yahoo touched 660 million dollars and revenues of 6.97 billion dollars.
"We very much respect Yahoo and together, we can offer extremely outstanding solutions to our clients, editors and advertisers at the time we reach a more advantageous position in the online-services market" – states Steve Ballmer, General Director of Microsoft.
Microsoft states that it identified four merger types with Yahoo. The annual income of such synergy will constitute no less than 1 billion dollars, experts of the company expect. No comments were made by Yahoo.
Experts note that the news about the deal will support the stock market as the market is not indifferent to big deals. Through the absorption of Yahoo, Microsoft hopes to compete with Google and that would be possible for Microsoft, argue the analysts.
“I am in a shock. The premium which they have offered I consider as exorbitant. Personally, I do not see how Microsoft-Yahoo can affect Google. But it will render good support to the stock market as a whole, the stock market adores big transactions and we already see a sharp growth of future contracts. As of today, all attention is given to this transaction, considering the condition in which the market is going through. If in such a situation, we make transactions in the financial or technological sectors, it casts a spell over the market, that’s what we observe today ", - quotes Reuters Tim Smalls from Executon LLC.
"It eclipsed all events and led to a sharp growth of future contracts. For the stock market, it undoubtedly is important news. For a long time, the market looked for something similar and it has reduced the importance of yesterday's news from Google. I think, this deal is meaningful on the backdrop of hard times for Yahoo, due to heavy competition from Google. I do not see anybody who could offer more than Microsoft", - states Paul Mandelson from Windham Financial Services. |
Surprising news this Friday - Microsoft offered to buy Yahoo for $44.6 billion. The Microsoft's takeover of Yahoo is meant to put massive financial injections into the development of Yahoo search engine and advertising solutions, in order to shake Google's dominance in Google in search engine niche and advertising markets. Yahoo Inc. shares went up massive 60 percent while Google Inc. shares suffered a free-fall of 8 percent.
