Microsoft Offers $44 Billion For Yahoo

Microsoft has been out of the loop when it comes to windows live marketing and their strategy for cracking into the search market.  Google is obviously the Goliath of search and a lot of the opportunities that might have been had by Microsoft were lost due to the new kid on the block.  So it’s not surprising to see Microsoft become more aggressive with respect to their online business strategy.

According to the Wall Street Journal:

Microsoft Corp. offered $44.6 billion to buy Yahoo Inc., in a bold attempt to dramatically expand its online business and compete more effectively with Google Inc. in services ranging from email to Internet advertising sales.

Adding to the drama, here’s the best part of it all — Microsoft decides to bully it’s rival:

The offer was made in a letter sent Thursday by Microsoft Chief Executive Steve Ballmer to Yahoo’s board of directors. One person familiar with the matter said that Microsoft decided to “go hostile” with its bid within the last few weeks after Yahoo ignored its latest overtures.

The offer, $31 a share in cash and stock, is a 62% premium to Thursday’s closing price.

Aside from a larger market share on internet search, Yahoo may have a leg up with their YPN ad publisher program.  Additionally, Yahoo stock has been plummeting and with rumors of previous flirting between the silicon valley giants, it seems like now is a good time for Yahoo to consider such an offer.  Though, I don’t know if you can call it flirting if one party seems consistently interested and the other is generally turned off by the proposition.

Not surprising, but the Dow is reacting positively to the news. 

Fred Soto is an Attorney and Entrepreneur from the Silicon Valley.
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