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Weekend Buzz: No More MicroHoo
Microsoft announced over the weekend that has withdrawn its offer to acquire Internet giant Yahoo for roughly $5 billion. "After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal," Microsoft CEO Steve Ballmer said in a statement.
"We have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners," Ballmer said. "While Yahoo would have accelerated our strategy, I am confident that we can continue to move forward toward our goals."
Roy Bostock, chairman of Yahoo issued a response reiterating that "our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view." Yahoo CEO Jerry Yang added: "With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history."
Stanford Group analyst Clay Moran believes Yahoo missed a good opportunity and he expected the firm's stock to drop significantly on Monday. "We believe this is good for Microsoft’s stock in the near term not only due to the unwinding of arbitrage positions, but also as it likely represented its best option under the circumstances," he added.
The result of the deal's demise makes Google the big winner, Moran said. The company's two largest competitors remain separate, thus entrenching its dominant position, and Yahoo may be pressured to further pursue a search outsourcing agreement with Google.
Posted by Andrew on May 5, 2008 09:42 AM | Permalink
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