It seems as the rumours surrounding the Microsoft bid for Yahoo will not be laid to rest just yet. Wall St Analysts are sure that Microsoft will eventually win the battle for the search engine, even if this may mean a conglomeration with Rupert Murdoch’s News Corp. As the bid is such a huge figure; £21 billion ($42.3 billion), it is unsurprising that Microsoft have had to broker a deal with a rival. It was estimated for Microsoft to foot the bill alone it would have meant borrowing beyond their means and while they would have certainly made the money back in time, the easier option was to combine forces with an external interest.
One analyst has stated that “everyone is just exploring” different options, but seemingly the Microsoft option is edging a lead over other deals. Comments have been rife that an AOL-Yahoo merger made no business sense. The main argument being that why would a strong and mature brand such as Yahoo want to combine their efforts with what is perceived to be a brand in decline?
With the board members of Yahoo reportedly discussing their options and more precisely the Microsoft bid thrice weekly, a decision may become apparent soon. Industry insiders expect the deliberations to continue until the company’s quarterly earnings report is released on the 22nd of this month. With Yahoo stocks steadily rising as news of the bid becomes more detailed, it is unsurprising that the board are holding out for a better price. Microsoft however is not leaving their offer on the table indefinitely and has specified a time limit of three weeks before the bid will be lowered.
Ultimately the power is with the shareholders; the complexities of the AOL bid will be distasteful to the majority of shareholders and hence the likelihood of the straightforward Microsoft offer being accepted is greater. Even a joint bid from Microsoft and News Corp for the search company would be a preferable outcome; especially as this would mean the combination of three of the biggest media, software and social networking players to create viable opposition to Google. News Corp being the owner of social networking giant MySpace.
Seemingly the Google bid is the least likely of all the offers due to anti-trust concerns and the possible creation of a search engine monopoly. Any deal that is bartered could well change the face of the internet forever. The combination of such industry giants into one concerted effort to counter Google could see a gargantuan shift in power. As it is at the moment, all of the companies involved have declined to comment and it will probably stay like this for some time. What is doubtless is that the furore over the takeover of Yahoo will continue for the foreseeable future.
Related posts: