Blue Crab Boulevard

Assimilation

Microsoft has made an offer to buy Yahoo.

Microsoft Corp. has offered to buy struggling internet search provider Yahoo for $44.6 billion, a merger that would combine two of the technology world's most well-known names into a potentially potent competitor for Google in the lucrative Web search and advertising market.

Microsoft, which manufactures the operating system and Web browser used on the vast majority of the world's desktop and laptop computers, has been struggling to capture more of the internet search and advertising traffic that has been Google's undisputed province. The Web advertising market is growing rapidly, anticipated to increase from around $40 billion last year to $80 billion in 2010, Microsoft said in a press release.

Though the world's dominant software maker, Microsoft has not fared as well in efforts to promote its own search engine and other Web-based services, or to capture part of that advertising revenue. The offer for Yahoo reflects the importance that Redmond, Washington-based Microsoft places on becoming competitive in that arena — and finding a way to erode Google's current dominance of it.

Google's share of the internet search market is estimated at 56 percent — far outdistancing Yahoo, an early entrant in the Web search field which has had trouble translating the large audience for its Web site into consistent financial performance.

At $31 a share, the proposed purchase price represents a roughly 60 percent premium over Yahoo's closing stock price on Thursday of $19.18. In addition, Microsoft chief executive Steven A. Ballmer hinted that if Yahoo's board rejects the deal, Microsoft would pursue a hostile takeover, attempting to lure Yahoo stockholders with an attractive price. Yahoo stock has fallen in excess of 40 percent in recent weeks, and Ballmer said Microsoft would take "all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal."

Resistance is futile. Joking aside, I have become even less of a fan of Microsoft as the years have gone by. I think there are serious privacy issues with the internet already – this is likely to make things worse. I'm also not at all sure that MicroYahoo will fare any better against Google than the separate companies have – face it, there really is a trust issue with Microsoft. (I do not use MSN at all, personally, for just that reason).

Besides, who wants a blue screen of death on their search engine?

Geek Stuff | Gaius February 1, 2008

By feeblemind, February 1, 2008 @ 8:57 am

I think you are right on all counts, Gaius. OTOH, I have trust issues with google as well. What to do?
By syn, February 1, 2008 @ 9:16 am

I never imagined Big Brother would come in the form of a Liberal yet here he is Gated in all its glorious technology.

Poor youths I really feel sorry for them, they have no idea how oppressive will be their future.
By NortonPete, February 1, 2008 @ 10:48 am

I think google as a company is overvalued because of “click fraud” but that is another issue. Yahoo and Microsoft have performed poorly so I laughed when someone on CNBC just said, “when you mate two dogs you don’t get a pony.”
I do not trust any of them.
By Gaius, February 1, 2008 @ 10:53 am

That line is classic!
By Neo, February 1, 2008 @ 11:09 am

GOOG down almost 10%
By kidrob, February 2, 2008 @ 7:41 am

is this the kinder gentler capitalist thing to do?