Yahoo!, Microsoft and the others

February 1^st, 2008: Microsoft makes an unsolicited bid to acquire Yahoo!; the bid values Yahoo! shares at $31 a share, for a total amount that reaches $44.6 billion (a 62% premium on Tuesday closing price). It seems that, some months ago, Yahoo! already rejected other Microsoft proposals, for a commercial partnership or a merging. Microsoft’s goal, according to the analysts, is the on-line advertising market ($45 billion in 2007, $75 billion in 2010), at the moment dominated by Yahoo!’s main competitor, Google.

February 11^th, 2008: Yahoo! rejects Microsoft’s offer. Internet people, however, do not rejoice for the defeat of the Redmond company; looking at Internet tech forums and blogs, in fact, most people believes that “only a union Yahoo!/Microsoft can prevent Google to seize the whole planet”. There are many Google’s “disappointed lovers” that believe that Google’s unique interest is to annihilate competition rather than innovate its services. It’s always the same story: when you are the number one (Google scores 55% of all Internet searches, Yahoo! 17% and Microsoft/MSN only 5%), you are also the most hated…

However, nobody should forget that Yahoo! itself is a company whose unique purpose is to “create value for the shareholders”, as its CEO and cofounder, Jerry Yang, remarked many times during these days. The reason for the rejection, in fact, is that Microsoft’s offer “undervalues the company” and that they won’t consider an offer below $40 per share. Microsoft should offer about $15 billion more…

February 12^th, 2008: Microsoft confirms its interest in Yahoo! and declares that they reserve “the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal”… it sounds slightly threatening, doesn’t it? In the meantime, other “giants” come closer, as they realize there’s the possibility they can make a good deal: Google, ready to lend a hand to the old enemies of Yahoo! (a selfless help, in the name of Internet freedom… if you can believe it!); AOL/Time Warner, that in the past was to acquire Yahoo!; and Disney Corporation (by the way, one of Disney’s shareholders is Mr Apple, Steve Jobs).

February 14^th, 2008: Internet rumors claim that an offer by News Corporation (owned by Rupert Murdoch) to acquire 20% of Yahoo! is very likely. News Corp owns Sky, Fox News and some tens of newspapers all over the world, and that last year acquired Wall Street Journal. News Corp’s purpose is to integrate with Yahoo! its Fox Interactive Media that also includes MySpace, the popular social networking site. This news is not confirmed, but it made Yahoo! shares reach $30 a share. According to the same rumors, Microsoft is ready to offer (in a couple of days) $35 a share, believing that Yahoo! acquisition is the best way to fill the gap with Google… and to remove on of its major competitors!

Come back for the next episodes of this soap opera!