Wednesday, May 7, 2008

Microsoft offer for Yahoo withdrawn


Last February 2008 the blog topic I wrote was on the Microsoft bid to buy Yahoo. The intent of the offer was to merge two giants to try to compete with Google on internet search engines and ultimately earning the market share and revenue on advertising.

On Sunday, Microsoft made the announcement that it has withdrawn its offer to buy Yahoo. Yahoo would've have accepted the offer if Microsoft's price was at $37 per share, however Microsoft was unwilling to raise its $33 per share offer. The company felt its offer was the worth value of Yahoo, and nothing more above that.

In my February blog I thought that the bargaining dance would continue for several months, maybe even up to a year, and both companies would come to an agreed price on the buyout. But such will not be the story. 'Asked if that was the end of the story with Yahoo, Mr Courtois replied: "Absolutely, that's the end of the story. We are moving on because our strategy is very clear."' (BBC article of 05/06/2008)

In an analysis of the failed transaction Mr. Tim Weber describes a technical failure named "Panama" which is an advertising platform that matches a user's search with the appropriate advertising. A Microsoft executive stated, "There's nothing in Panama that I would want to integrate with our offering."

The speculation is that Microsoft will shop around in the smaller Web 2.0 companies, which is similar in functionality and capability to some of Google's best offerings.

Meanwhile, there is probably a large relief from the staff in the Yahoo camp that there is not any major reorganization to happen for the next little while… at least not until another bigger fish comes along, and/or Mr. Yang breaks decides to please his real which are the shareholders. Then maybe, just maybe… he may reconsider Microsoft's office if the door is still open.

-Analyn Revilla
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