Microsoft's move to acquire Yahoo! reflects importance of Web 2.0 for mobile
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Published:
Week 6
February 2008 -
Image Source:
Microsoft
News:
Microsoft has launched a $31 per share offer for Yahoo!, representing a total equity value of approximately $44.6 billion (£22.4bn) representing a 62% premium on Yahoo!'s closing price at the end of January.
In a letter to Yahoo!'s board, Steve Ballmer, Microsoft's CEO outlined the rationale for the bid in that it would create a more efficient company and a stronger competitor in the marketplace for Internet search and online advertising, which is increasingly dominated by one player (Google). Synergies were highlighted in four areas: increased value for advertisers and scale economics from a larger audience; a larger pool of engineering talent to accelerate developments; cost reduction and operational efficiencies and the ability to innovate in emerging user experiences such as video and mobile.
In late 2006, Microsoft and Yahoo! had explored options for working together, from commercial partnerships to a merger proposal. However these were ultimately rejected by Yahoo!'s Board, which was confident about the positive effects of the reorganisation plans and operational activities that were being put in place at the time.
