Microsoft Withdraws offer to acquire Yahoo
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Microsoft has withdrawn it’s offer to acquire Yahoo after several unsuccesful rounds of discussions between the companies. Microsoft made a $31 a share bid for Yahoo on January 31st in an effort to compete with Google, the market leader in internet search.
Yahoo’s CEO, Jerry Yang, has stood firm on his belief that a $31 a share offer undervalues Yahoo as a company. In a move to thwart a hostile takeover, Yahoo revealed plans to work with rival Google to outsource its paid search advertising business.
Microsoft had subsequently revised it’s offer to $33 dollars a share, a $5 billion premium over it’s original offer of $44.6 billion. Talks between the 2 companies have now broken down over Yahoo’s demand for at least a $37 per share deal from Microsoft.
Yahoo’s decision to cozy up with Google may have prevented a hostile takeover from Microsoft but unless the company comes with a strategic plan outlining it’s future growth, Google may be the final winner in this war.
Google dominates the search market with over 60% market share followed by Yahoo and MSN at a distant 2nd and 3rd position. Yahoo however is the most visited web destination in the world - Alexa Global traffic rankings. A combined Yahoo/Microsoft would have given Microsoft significant growth opportunities by combining the scale of its recently acquired advertising network - Aquantive with that of Yahoo’s, along with Yahoo’s vast consumer reach (which is appealing to advertisers, who see all those eyeballs as valuable inventory).
Complete Press Release from Microsoft available here.
