Microsoft makes $44.6 BILLION dollar offer for Yahoo!

Over the past couple of years, Yahoo! has been disappointing investors by always missing the targets on earnings and profits. Earlier this week, Yahoo! announced it would have to lay off thousands of employees in an attempt to win what seems to be an uphill battle that just won't end. With its stock much lower than it used to be, Microsoft immediately jumped in with a $44.6 Billion dollar takeover bid, and if you have opened any news site today, then you will likely have heard about it already.

The interesting thing about how the media is handling this news is the speculation from every angle. The story isn't just the offer, but it is the stories behind that headline that are interesting.

On one hand, the Guardian, which is a pretty good British news source, asks "What would a Microsoft-Yahoo deal mean for web users?". What they want to know is who, among MSN/Live users and Yahoo! users, would end up having to switch to the other service? Which chat would become most popular, which email, which search, etc?

Then in a separate article, by a different journalist also at the Guardian, they ponder over "The problems of merging Microsoft and Yahoo". This article goes over the differing technologies that each company uses. Not surprisingly, Microsoft makes use of all of its own software, from ASP for web page development to Windows on the Hotmail / Microsoft Live email servers. Yahoo! however, uses FreeBSD as its operating system and PHP for its web pages, both of which are open source, and therefore free to the public. Attempting to merge everything together into one functional system would require enough money to make Bill Gates skittish.

In the meantime, reporters at Forbes are offering their own opinions, beginning with "Why Yahoo! Can't Fix Microsoft". The writers believe that Microsoft has failed as a web company and should stick to their software packages. The article states that the world would be a better place if Microsoft just spun off all of its web properties and SOLD them to Yahoo!, instead of buying Yahoo! and increasing their responsibility in web property. They think that Microsoft isn't suited for the web and for that reason, shouldn't expand across it.

And finally, in another article, Forbes reports that "Microsoft Admits Yahoo! Isn't In The Bag". In a conference call, Microsoft admitted "that 'any number of companies might have an interest' in also acquiring Yahoo!. EBay, News Corp. (owner of Fox, MySpace, and Dow Jones), AT&T, and Comcast have each previously been speculated as possible Yahoo! buyers." (Forbes.com) Of course, Google, already owning 56% of the market, would not be legally permitted to buy Yahoo!, so Microsoft isn't worried there, but even with MS and Yahoo! put together, Microsoft would only maintain 32% of the market, still trailing Google by over 24%.


According to MarketWatch.com, which was owned by Dow Jones (the publisher of the Wall Street Journal) until the December 2007 Dow Jones buyout by Rupert Murdoch's News Corp., analysts have been shaky on the deal all morning, not knowing whether a potential merger would actually do any good for either company.