After the possible merger between the industry giants Microsoft and Yahoo being the most talked about topic in technological circles. The attempt to compete with Google effectively is unsurprisingly hot property. The bid by Microsoft was a stunning 23 billion pounds; paying well over the odds for the Yahoo shares. To be precise the offer was 63 percent more than Yahoo’s shares were actually worth.
Despite what seems to be an outstanding offer of 31 dollars a share, many financial commentators believe that Yahoo will not consider anything less than 40 dollars per share. This price is over one hundred percent more than Yahoo’s share price before rumours of the Microsoft bid became rife. They have not been consistently at this level for over two years.
Although the share price of Yahoo has suffered somewhat over the last couple of years, it is still the world’s second most popular search engine. The reason prices have fallen so dramatically is due to the company’s inability to compete with Google effectively. Microsoft as a close third behind Yahoo is also a major competitor for Google although at the moment Google are a country mile ahead in the race for the mantle of ‘world’s most popular search engine.’
News of the bid has actually had a detrimental effect on the share price of Microsoft. Obviously traders are worried that the takeover would lead to Microsoft focussing too much upon the search engine market; detracting from its core software development programs. Yahoo’s shares on the other hand have benefited from the bid rising almost 50 percent on the price a few weeks ago. It must be remembered however that news on the bid is at this time just rumours. Neither company has made any official statement on the varied reports that would doubtlessly shake up the search engine market.
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