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Latest update: 07/04/2008
- Microsoft - takeover - technology
Microsoft turns up the heat on Yahoo!
Yahoo! has three weeks to accept Microsoft Corp's 31-dollar-a-share cash-and-stock offer, after which the technology giant has threatened to lower its bid. If accepted, the deal would be the biggest takeover in the high-tech industry.
On Monday, Yahoo! will respond to the latest missive from software giant Microsoft, which is seeking to take over the internet services firm.
In a letter sent to Yahoo’s board of directors on Saturday, Microsoft said it was giving them three weeks to respond to a 44 billion dollar takeover offer, after which it will begin making its case directly to Yahoo!’s shareholders. Yahoo!’s board has already had two months to think things over. Microsoft made the unsolicited bid at the end of January - since then, Yahoo has been seeking out other potential partners, but no viable offers have come to light. Realistically, there appear to be only two ways that Yahoo can fend off the Microsoft bid.
In a letter sent to Yahoo’s board of directors on Saturday, Microsoft said it was giving them three weeks to respond to a 44 billion dollar takeover offer, after which it will begin making its case directly to Yahoo!’s shareholders. Yahoo!’s board has already had two months to think things over. Microsoft made the unsolicited bid at the end of January - since then, Yahoo has been seeking out other potential partners, but no viable offers have come to light. Realistically, there appear to be only two ways that Yahoo can fend off the Microsoft bid.
Firstly, by coming up with better-than-expected results. Its latest quarterly figures are due shortly before the deadline expires - if they exceed expectations, it may be able to convince shareholders that it’s capable of going it alone. The second option would be to find another suitor, but thus far Microsoft’s is the only bid on the table.
The software behemoth, meanwhile, insists its offer was already generous, and points out that Yahoo’s share of online advertising revenue has fallen in recent months. Add to this the current poor health of the US economy, and the offer, it says, is even better value now than it was back in December.
Part of the impetus for Microsoft’s takeover bid is the increasing dominance of Google on the web. It has trounced Yahoo!’s search engine, and its other programs are posing increasingly tough competition for Microsoft software. Some within Yahoo! have even proposed ‘outsourcing’ their search technology to Google, but Google itself is yet to comment on the proposal.
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