Microsoft Purchase Yahoo For 62 Billion
In what has been described today as 'an offer too good to refuse', Yahoo Inc (NASDAQ:YHOO) has finally accepted an offer from software giant Microsoft.
The deal, estimated to be worth $62 billion (USD) has left rival Google stating the merger is anti-competitive. Google, who have recently acquired many smaller companies, has said the deal would punish internet users by stifling innovation in new technologies. Microsoft have made the same claim about Google in reply. The acquisition still leaves Google with a thirty percent lead in the Internet division.
Wall St Journal analysts who predicted the increased bid were today reeling at the size of the offer which, as pundits had suggested, would need to be over the forty dollar per share mark. More importantly, to get the bid through, Microsoft has needed to advise Yahoo of the new Board of Directors in advance of any bid. "The actions taken [by Microsoft] today leave no doubt this is a hostile takeover" said Chairman, Mr Arthur Kern, a founding member of Yahoo.
The deal is set to greatly push Microsoft's failing internet advertising efforts and internal mergers are set to take place with messaging and mail services. The possibility of a new division headed up by the Executive Officer of Activision, Robert Kotick has not been ruled out.
Brokers from Goldman, Sachs & Co. who headed up the deal for Yahoo have said this is the best result for internet users and stock holders alike.
CEO of Microsoft, Steve Ballmer, has said of the takeover "Today marks a new era in internet, from here the way is clear for a new internet, a new way forward in delivering enhanced user experiences". The Microsoft Board of Directors have had to make some concessions in allowing much of the existing board to stay on, however, chairman and netflix founder Reed Hasting is quoted as saying "wherever duplication occurs, we see a process of unification to ensure shareholder confidence". Yahoo Board of Directors CEO Jerry Yang was unavailable for comment on the events.
The merger may see Microsoft gain some market share from Googles advertising arm, however it is expected to take some time for the combined forces of Yahoo and Microsoft to implement new strategies.
Yahoo stocks finished firm on the back of the news while Microsoft shares fell $0.03. Google shares remained unchanged at the news while investers take time to wiegh up any market fallout following the move.
