Microsoft indecent proposal to Yahoo

Darius Chang | Feb 04, 2008

Will the marriage between two giants be enough to take on a mammoth? When it comes to search engines, Google is the undisputed leader, with Yahoo and Microsoft playing second and third fiddle to the Mountain View company. However, Microsoft's buyover bid at US$31 per share for Yahoo did come as a surprise.

With flagging profits and a rather bleak outlook in 2008, some say the software giant's offer was way overpriced and meant to blow any competing bids out of the water. Moreover, the corporate culture between Yahoo and Microsoft is so different that many critics speculate that this will go the way of Hotmail, whereby Yahoo becomes a mere subsidiary of the Redmond corporation without providing much, if any, benefit. Moreover, Microsoft has huge anti-trust hurdles to cross in Europe and the US even if Yahoo agreed to the offer.

On the other hand, proponents of the deal believe the consolidated customer base will increase the collective benefit from economics of scale, though whether this will work out depends strongly on how the details of the deal. Nonetheless, unless Yahoo manages to perform a small miracle and turn its business around, this may be Yahoo's final hurray.

Filed under: PC & Peripherals
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