The astronomical growth of Google is said to be at the root of Yahoo’s problems as far as competition is concerned.
It’s now a year since Microsoft first began making noises about buying out Yahoo but offers were rejected until recently. Yahoo were confident that with all the measures they were putting in place, they could pull the company back around to be a sure contender for the ratings of the top search engine, Google.
However, after an initial boost of share prices rising, they then plummeted 46% between October and last week. Yahoo claim it would cost them $300 million over the course of this coming year to revive the company and would include the laying off of 1000 members of staff.
After press reports that Microsoft were to take over Yahoo, share prices rocketed 48%. Microsoft have themselves a good deal with the £22.4 billion in cash and shares they have offered for the Yahoo company and the deal has generated enough interest to boost share prices again.
The Federal Trade Commission and Department of Justice in the US are monitoring the situation closely with regard to the deal creating a monopoly.
Yahoo have reported that other companies have taken an interest in the sale but to date there is no evidence of this.
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