ParisLemon » Microsoft to Yahoo: Join Us, Join Us or Die (and here’s $44.6 billion to help you decide)

Microsoft to Yahoo: Join Us, Join Us or Die (and here’s $44.6 billion to help you decide)

And here we go. Marketwatch and Reuters are now reporting that Microsoft has offered to buy Yahoo in a cash and stock deal worth $44.6 billion dollars.

Yes, you read that right. They are offering to pay $31-a-share for the company which would make it a large 62% increase over the stock’s current price (right around $19). Obviously Microsoft does not want to be turned down, this is a very serious offer. The question now, of course, is if Yahoo can refuse it.

Yahoo has been mired in difficulties for much of the last few years. While they are still very much a profitable company and still worldwide the #1 visited site, they have vastly struggled when compared to a much newer company that came along and dominated almost every field Yahoo had either been in or tried to enter. That other company is of course Google.

In this regard, Microsoft and Yahoo share a common “enemy”, though Yahoo has not had exactly the same contentious relationship with Google that Microsoft has. Now the two companies that were battling for the #2 position in many of the online fields that Google dominates in could becomes one entity and it could certainly level the playing field.

Interesting that Microsoft would do this right after Google announces their earnings and for the first time fell short of expectation. Is that the ’strike while your opponent is weakened’ strategy? (In all fairness it probably had something to do with Yahoo’s stock hitting a 4-year low on Wednesday as well…)

Also of note is that despite all its recent issues, lest anyone think Twitter isn’t useful, I first found out about this by at least 5 different sources at around 3:30am here in California on yes, Twitter. The first one I saw was Fred Wilson’s tweet.

This would potentially fulfill my prediction #2 of 2008. Lets see what’s Google’s response is.

[UPDATE]: Yahoo is up 60% right now in pre-market trading all the way north of $30 on the news! Microsoft might have to up that bid!

[UPDATE 2]: Here’s Microsoft’s announcement for a Press Conference scheduled at 8:30 AM EST/ 5:30 AM PST – Yes, Microsoft is having a press conference at 5:30 in the morning in their time zone with Ballmer and Ray Ozzie in attendance. Obviously such a deal warrants it.

The live webcast link is here.

More thoughts:

Post by MG Siegler on 02/01/08
Comments

I'm blackout

Heh, I think somebody should write an Onion post of how this deal would have gone down if Mark Zuckerberg had been involved in the deal.

"5:30am -- sorry... our CEO will still be drunk... he'll be hung over until 10 or 11... he might be available for a press conference at 1pm... unless his girlfriend is in town... then he'll be going shopping."

Dylan

I read somewhere this would be the biggest merger since HP and Compaq.

I knew loading up on Yahoo! stock last week was going to be a good move. Still below 30...

MG Siegler

@imblackout - ha ha yeah, that was the basic jist of the yahoo/facebook talks. that was pretty tough of him when you're facing a billion dollars you have to admit.

@dylan - tech-wise could be, there are always those energy companies and banks that are bigger. this is nothing compared to AOL/Time Warner though, think that was $180+ billion.