Looks like my earlier prediction was right. Microsoft Corp. has pulled its bid to purchase Yahoo! Inc. for $33 a share. The deal is dead.
The market, to no surprise, doesn’t like the news and shares for Yahoo have plunged 21% in pre-market trading. Bloomberg reports that Citigroup Inc. has downgraded the stock to a “sell” after the news came out.
Yahoo’s future is not as bleak as some apparently want to believe. It is still arguably the #1 or at worst #2 brand on the Internet. They are currently rumored to be in talks with with Google to iron out an advertising deal, and there are also rumors of a possible deal with AOL Time Warner.
I’m sure this is not the last time we’ll be discussing Yahoo! mergers this year.
Looks like my wish is coming true. The weekend passed without a deal to merge Microsoft and Yahoo.
Even though it is still possible for Microsoft to initiate a hostile takeover bid, the issue seems have simmered down over the weekend and does not look very likely.
Bloomberg has an article this morning detailing Microsoft’s reaction to Yahoo!’s earning results reported last night.
Essentially, Microsoft stated that it will not be raising its bid to aquire Yahoo, even though the company came through with decent earnings. Good. Great. Super. Now all we need are the Yahoo shareholders to reject this offer.
Yahoo’s board of directors is recommending that this hostile takeover is rejected. Normally, I think board of directors are full of it, but I do agree with this opinion.
Microsoft would ruin Yahoo. It’s not really because they would want to ruin them, I’m sure they have some great ideas that make complete business sense. The problem is that Microsoft has already become too big. The entire company can easily be compared to the disaster that is Vista. Vista, for those fortunate enough to not be aware of, is Microsoft’s newest operating system. It is slow, bloated, frustrating and seemingly has a split personality.
A merged Microsoft/Yahoo offering would be equally bloated, frustrating and definitely possessing a split personality. The thought of Microsoft’s marketing team frothing at the mouth over the cross marketing potential of the world’s #1 website makes my stomach turn. For Yahoo! shareholders, it should make yours too.
Vote No. Vote often.
