Microsoft Corp. made an unsolicited $44.6 billion offer for Yahoo with hopes to create efficiencies by teaming up to compete with Google.
It’s “becoming a now-or-never proposition” for Yahoo, say analysts at Goldman Sachs. However, Pioneer Investments fund manager Thomas Radinger told Bloomberg News, “Microsoft is under massive pressure to expand its Internet business to fend off competition from rivals such as Google and this deal shows how desperate they are. It’s a huge gamble as the price is very steep and it will take years to successfully integrate such a massive acquisition.” The NY Times reports it’s unclear “how Yahoo’s board will react to Microsoft’s offer.” Earlier this week, Yahoo posted a sharp drop in Q4 profit and said it would trim its workforce. The results dented Yahoo’s stock, sending the shares to their lowest level since October 2003 and making a purchase more inviting for Microsoft.
Yahoo was founded by Yang and David Filo while the two were graduate students at Stanford University in 1995. The co- founders, who own a combined 9.8% of Yahoo’s stock, took the company public a year later. After a three-year jump in the stock price, they were each worth $4 billion, according to Forbes Magazine. Then the market crashed in 2000, wiping out 86% of Yahoo’s market value. (Gazdasági Rádió, Bg)