Microsoft offers to buy Yahoo

Microsoft has offered to purchase Yahoo in a deal for $44.6 Billion (or £22.4 Billion) in cash and share options. The offer is 62% above Yahoo’s closing share price on Thursday, and follows a cut in revenue forecasts earlier this week, as well as saying that it would need to spend an additional £150m on reviving the company.

Such a move would significantly affect the current search markets (particularly in the US and Europe where Google is the dominant player in the market, a fact echoed by Kevin Johnson from Microsoft, and potentially provide Google with significant competition, however I would suggest both parties still have significant work to do in order to provide an effective a solution as the current Adwords system in particular.

From a personal perspective, I can’t help thinking that the deal is a bit of last chance saloon for both parties, and as such has an air of desperation about it. However time will ultimately tell whether such a deal provides Google with a significant competitor or whether this is just an expensive mistake.

To read more about the deal, further details can be found on the BBC Website

Add comment February 1st, 2008