Microsoft Corp. may have made an offer Yahoo! simply can’t refuse.  An offer of $44.6 billion dollars to be exact.  Even combined, the Microsoft/Yahoo combo wouldn’t edge Google from its estimated 60% market share.  What Yahoo! does have though - a built in audience - one of the largest out there.  Plus, approximately 27% of the search engine market share. That’s at least enough to make Google nervous. 

The motive: Well, Microsoft’s motivation isn’t anything new.  The company’s been trying to purchase Yahoo! for the past few years, to no avail.  This time though, they’re hitting Yahoo CEO Jerry Yang up with some serious stock options.  Microsoft is currently offering a 62% premium bid on Yahoo’s closing stock. 

The forecast: Online advertising.  Despite Google’s falling stock value, the future for online advertising looks bright.  So bright analysts are expecting online ad dollars to double from $40 billion to $80 billion by 2010.   

Yahoo’s in peril, but is it bad enough to shut the doors?  Financial losses have been stark for Yahoo, with stock prices dropping to a four year low in January.  And what about Yahoo’s devoted fan base?  Well - a quick perusal of Yahoo Ask didn’t reveal much in the way of people inquiring about the buyout.   It may be too soon to get a sense of a collected sentiment from Yahoo regulars and whether or not they’ll venture over to MSN.com if the buyout occurs. 

While Yahoo execs have yet to respond, Microsoft Chief Executive Steve Ballmer is adament the purchase will go through. The courts will also have at it, determining whether or not anti-trust laws are being violated.  In any event, time will tell if Microsoft will win with its fiscal fists, or if Ballmer and co. are simply California Dreaming. 

This entry was posted on Friday, February 1st, 2008 at 3:43 pm and is filed under All Marketing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.