Microsoft Offers to Buy Yahoo for $44.6 Billion
Saturday, February 2nd, 2008Microsoft Corp., the world’s biggest software maker, made an unsolicited $44.6 billion offer for Yahoo! Inc. to challenge Google Inc.’s dominance in Internet search services and advertising.
The $31-a-share bid of cash or Microsoft stock is 62 percent more than Yahoo’s closing price yesterday. Yahoo, which posted a 23 percent drop in fourth-quarter profit this week, had fallen 18 percent in Nasdaq Stock Market trading this year before today. Microsoft fell the most since 2006 as investors expressed disapproval of the deal.
Microsoft Chief Executive Officer Steve Ballmer is attempting the biggest-ever technology takeover after failing to compete with Google in a market that may almost double to $80 billion by 2010. Microsoft’s shares have dropped more than 40 percent since Ballmer took over from co-founder Bill Gates in 2000.
“With Microsoft paying a full price for a broken business where there’s not accelerating organic growth, I can’t make that work at all,'’ said Jon Fisher, a Minneapolis-based portfolio manager at Fifth Third Asset Management, which manages $22 billion, including Microsoft shares. “I don’t see what they get out of it. The strategy behind the deal was wrong.'’