Microsoft makes bid for Yahoo
So, the latest in the Microsoft vs Google saga is that the giant Microsoft has made a bold $44.6bn bid for Yahoo in a deal that would create an online advertising colossus big enough and powerful enough to rival market leader Google.
Microsoft arrived rather late in the day to the internet advertising market, and so is keen to gain a good foothold in this area. Microsoft is offering Yahoo shareholders a tempting $31 a share, and this deal would be one of the largest dotcom takeovers since the merger of AOL and Time Warner.
Only last year Yahoo turned down an offer from Microsoft. Microsoft’s chief executive, Steve Ballmer, says:
“Our companies really do share a vision for the potential of online services and advertising specifically. When you combine the strengths of our two companies the result will be an incredibly efficient and competitive offering for consumers, for advertisers and for publishers.
“A year ago the Yahoo management team told us it was not really the right time to discuss an acquisition, we believed then in the benefits of combining the two companies and we believe now in those benefits more than ever.”
Yahoo said that it had received the unsolicited proposal and that its board would evaluate it carefully, bearing in mind the interests of its sharholders.
This news has boosted share prices in London, with the FTSE 100 going back through the 6,000 level. And on Wall Street, shares in Yahoo have risen by almost 50%, to $28.26, while Microsoft has fallen by 5% to $30.94. Google too has dropped by 9% to $512.90.
It seems that Yahoo’s position has weakened somewhat over the past year with repeated delays to the launch of its new advertising platform Panama, and plans to axe 1,000 jobs following a drop in profits.
Meanwhile Google has, as ever, surged ahead in the online search market, and additionally has made moves into the wider online advertising market.
All this just confirms that, for the big players at least, online advertising is definitely where it is happening at the moment. And, especially where Microsoft and Google are concerned, it’s always intriguing to see what happens next.