Microsoft-Yahoo! Deal Off The Table?

In News on April 5, 2008 at 5:30 pm

(Pic from jnatiuk)

The latest developments to come out of the World’s Biggest Tech Takeover saga: Turns out that the $44.6 billion plan for MicroHoo may be off the table, due to the economic recession hitting and Jerry Yang’s continuing refusal to buckle in to the pressure of accepting Microsoft’s bid.

This from Bloomberg:

Microsoft Corp. is considering cutting its $44.6 billion offer for Yahoo! Inc. as a worsening U.S. economy threatens Yahoo’s business, two people with knowledge of the matter said.

The companies haven’t made progress on negotiations since Yahoo rejected the bid in February, and there are signs that Yahoo’s business has declined, one of the people said. They asked not be named because the talks are private.

The prospect of a lower bid increases the pressure on Yahoo Chief Executive Officer Jerry Yang, who has sought alternatives to the buyout. Since Microsoft made the offer, U.S. consumer spending has slowed. Federal Reserve Chairman Ben Bernanke said this week that the U.S. may be in a recession, spurred by the collapse of the subprime mortgage market.

“It’s only a question of time before Microsoft takes them over,” said Jeffrey Lindsay, an analyst at Sanford C. Bernstein & Co. in New York. He expects Yahoo stock to perform in line with peers. “It’s just unfortunate that Yahoo has dragged it out so long, because they are probably going to miss a few dollars that they could have obtained if they had negotiated immediately.”

  1. Yang Calls and Raises Ballmer…

    In response to Microsoft’s (MSFT) letter with a three-week deadline to act on Microsoft’s buyout offer, Yahoo’s (YHOO) CEO, Jerry Yang, insisted that Ballmer & Company raise its offer. Yang states that his company is not against …

  2. If I’m a loyal user of either of the big search engines, I would stop using either and run to Google. It’s going to be challenging for them to integrate and combine the search engines.

    Of course, there are a ton of other assets and it isn’t just about search engines and online advertising.

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