Reasons Yahoo should accept Microsoft’s $44.6B offer

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Feb 01 2008
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Let’s continue with internet search engine story and the consequences from their own screwed-up. One day after Yahoo screwed, Microsoft Corp. (Nasdaq: MSFT, stock) leaped in joy and pounced on the little pig which lost its way when the latter announced today an offer Yahoo shareholders may find hard to refuse. Microsoft Corp offered to buy search engine operator Yahoo Inc. (Nasdaq: YHOO, stock) Friday at a whopping $44.6 billion or $31 a sharehalf cash, half stock.

Based on Thursday’s closing price of Yahoo stock, the offer represents a 62 percent premium. This is probably the boldest move by Microsoft in declaring war against its number one enemy – Google Inc. (Nasdaq:
GOOG, stock). Microsoft has been having sleepless nights since the naughty Google sneaked into its backyard and letting off firecrackers. The time couldn’t be better now for Microsoft to launch the takeover since Yahoo is basically crawling. Yahoo’s so-called Project Panama intended to fights Google’s Adsense heads-on is as good as dead.

Microsoft and Yahoo Fight GoogleMicrosoft has started the game and the ball is now at Yahoo’s courtyard. Should Yahoo accept the offer? There’re obvious reasons why Yahoo shareholders should just save their precious time and accept the $31 a share offer:

  • Yahoo might not be dead anytime soon but it’s dying slowly and painfully.
  • There’s no way Yahoo could throw a single punch at Google, let alone to unseat it
  • Yahoo lacks a great leader who can drive the company to start giving serious threat to Google
  • Just like the political scenario in Malaysia, Google (Malaysian ruling government) is simply too strong with its huge cash-pile and the only way to compete is to have one-to-one fight – Microsoft + Yahoo against Google. In another words opposition parties should work together *grin*.
  • Yahoo’s 500 million unique users and over 4 billion daily page views should be put to better use by competing “efficiently”. Yahoo has been wasting too much time and resources without any clear result. It’s time to let Microsoft (hopefully) to chips in their plan / tactic.

As usual the main concern is the different working cultures between both Microsoft and Yahoo, not to mention the possibility of more heads need to be rolled. However with 50% of the offer in cash term, Microsoft is set to dig its pocket for $22 billion – would that drains up its coffer? It appears Microsoft is dead serious about this war against Google since lots of head, resources and money are at stake, so much so that the initial news about the merger back in May 2007 was not a hoax after all. Bad news for Google – short the stock.

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I used to be a loyal fan of Microsoft for many years since DOS was born.

Then one day, I woke up and walked out and decided to join Google simply Microsoft is coming with products again and again to make me poorer and poorer.

So since I am not a rich person, Google is a better choice for me, not sure about others.

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