Cyber War Goes Big
After lots of speculation over several months, Microsoft Corp has finally plunged into the field and in an unsolicited bid has offered $44.6 billion to buy Yahoo Inc. this is the value of Yahoo stocks at $31 per share which is a premium of 62 percent over closing rates on Thursday at NASDAQ. The offer boosted Yahoo share to go up to $30.75 in pre-market trading. If the merger materializes, it would be the biggest online deal since AOL took over Time Warner for $182 billion 2001. According to reports coming from Yahoo, it has decided to evaluate the offer.
Speculation have been swirling over last one year about Microsoft and Yahoo working together to form an entity that could rival Google which has outgrown both of them to become the premium web search engine with 77 percent market share compared to around 20 percent combined by Yahoo and MSN. Google has also been threatening to take over the mobile phone sector with its Android platform.
According to Steve Ballmer, the Microsoft Chief Executive
“ We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market.”
But many are skeptics about the success of the tie-up as Yahoo and Microsoft have many overlapping business and different corporate cultures.
Tim Smalls, head of
“To me, the premium seems exorbitant, for what is a dwindling business. I personally don’t see how synergies of Microsoft-Yahoo are going to take on Google.”
Andrew Frank, research vice-president at Gartner –
“ The merger raises question of how effectively they’ll be able to continue operating during their integration. The online advertising business requires significant levels of account service and even the perception of a diversion could wind up delivering business to their competitors.”
But Microsoft is quite optimistic that it would be able to synergize different aspects of the two corporations. According to this worlds largest software company it has already identified areas that would bring in revenue to the tune of $1 billion per year.
Best of luck Microsoft – hope you can give Google a run for their money and make WWW a bi-polar cyber world from a uni-polar that exists now. 