One of the Largest Internet Takeovers Ever Microsoft is about to boost its Internet presence dramatically. The offer is out and if Yahoo accepts the 44.6 billion dollar bid the deal is planed to be closed in the second quarter of 2008. The world’s top software company has made an unsolicited offer to buy Yahoo Inc. The offer was made in 50% cash and 50% stock. Microsoft’s goal herby will be to join forces against Google Inc. We are about to witness the biggest Internet Deal since the merging of Time Warner and AOL. Microsoft has offered Yahoo shareholders a 62 percent premium or 31$ on their shares to sell the company. Yahoo’s latest earnings announcement was rather disappointing and helped a great deal to depress the stock price further and make it once more a target for takeover attacks.
The online advertising revenue is projected to grow to 80 billion dollars by the year 2010 and Microsoft is about to extend it’s Internet marketing volume by far more than 100% if it can pull in the deal. Yahoo today ranks as the world’s heaviest traffic receiving Internet Company. Internet audience researcher comScore has estimated Google’s share of the worldwide Web search market has reached 77 percent, the second place goes to Yahoo with 16 percent and Microsoft is on a distant third place with only 3.7 percent Quote of Microsoft’s proposal letter: "Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. "We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years." At the Microsoft press conference, only two hours after the news where out, CEO Steve Ballmer said: "We see this announcement as significant. This is a milestone for Microsoft’s online ventures – We believe in the benefits of combining these two companies now more than ever." Chris Liddell stated: "We see the opportunity to drive 100% synergies and increased long term shareholder value. Clearly, we believe the offer is a very attractive one from the Yahoo shareholder perspective" And a last but quite remarkable quote from the Q&A at the end of the press conference: The Windows experience needs to increasingly embrace the Internet. Office will be transformed by the Internet.
