Microsoft Bids for Yahoo

Microsoft has just bid $45B for Yahoo.

Our tentative thoughts, shooting from the hip, follow. Some of this will be wrong and this has not been mulled over.

On the business synergism:

  • Yahoo has a culture that turns around helping end users' lives be better, and being end user-friendly
  • Microsoft has a culture of engineering excellence
  • Microsoft needs to do better at being end user-friendly. Yahoo could be a significant help in this regard
  • The bid is seen as a competitive step against Google. Despite its strengths in advertising and with mapping, Yahoo is stronger at being end-user-friendly than Google
  • Yahoo gets money and technology and a lot of doors open

From the financial standpoint:

  • Yahoo's share price has been declining for the last two years
  • Shares were $19 each yesterday, Microsoft offered $31 per share. Pretty good for Yahoo shareholders
  • Overall, current run rate is about $8B, and the $45B bid feels like a good one

Further thoughts from readers welcomed on this....

... David Ferris. Thanks to John Stanners and Mike Stackpoole for input

One Comment

  1. Posted February 4, 2008 at 7:11 AM | Permalink

    Interesting assertion that “Yahoo is stronger at being end-user-friendly than Google”.

    Is there research that suggest that this is the case? Comparing the Yahoo home page with the Google home page I’d certainly concede that Yahoo has a lot more ‘stuff’ but it’s presented in a way that makes me wonder what Yahoo think their core business is. In fact it looks a lot like the MSN home page, with every new service that Yahoo launches given its place in the sun.

    By contrast, going to Google.* leaves you in no doubt what the company believes it does for a living and in no doubt what the company believes you should do when you get there (search).

    In search at least, both the Yahoo and MSN approaches don’t seem to work at the moment. If the merger goes ahead I wonder if the two will just end up re-enforcing each others failures?


  2. Posted February 4, 2008 at 9:42 AM | Permalink

    Another two types of acquirer for Yahoo might be:
    * Big media firms, looking for places to grow (eg News Corp). Their traditional businesses–TV, print media–are under threat from new technologies
    * Telcos looking for places to grow (eg AT&T, BT). Their traditional business–voice calls–isunder threat from new technologies

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