Date: 02-05-2008
Following Microsoft Corp.’s approximately $44.6 billion offer to buy Yahoo! Inc., the latter is contemplating its strategic options. Microsoft offered Yahoo! $31 per share, which represents a 62% premium above the closing price of Yahoo! common stock on Jan. 31, 2008. Microsoft believes acquiring Yahoo! will better its ability to compete with Google’s lead in web search and Internet advertising. “The industry will be well served by having more than one strong player, offering more value and real choice to advertisers, publishers, and consumers,” said Kevin Johnson, president of the Platforms & Services Division of Microsoft. Meanwhile, the prevailing Internet leader Google Inc. has called the potential deal “troubling” and a threat to the web’s “openness and innovation.” David Drummond, Google’s senior vice president and chief legal officer, said that the combination potentially threatens competition, a reference to Microsoft’s past clashes with regulators over monopolistic behavior. “Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” he wrote in an official blog post. Reports also suggest that Google CEO Eric Schmidt has offered his company’s support to Jerry Yang, CEO of Yahoo!, in fending off Microsoft.
