RSS FeedMicrosoft Withdraws Bid For Yahoo– What Next?
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Yahoo’s shares may have been inflated while Microsoft was investigating their takeover of the portal. The price per share of Yahoo dropped $4.30 (or 15 percent) after Microsoft withdrew their bid. Over the last year Yahoo was trading between $18.58 and $34.08. The stock rose after Microsoft announced their intentions and has now fallen on Monday to $24.37.
Right now Google dominates the search market business providing more than half of the worldwide search results. Yahoo provides about half that number of searches and Microsoft provides far less than Yahoo. Microsoft makes their money off of their software business (Windows and Office etc).
Although Microsoft is the larger company, they have found it difficult to break into the online advertising business. This prompted their interest in Yahoo back in January. On Saturday (May 3rd) Microsoft announced their decision to discontinue their takeover plans.
“We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole,” Steve Ballmer, chief executive officer of Microsoft said in the statement. “Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees.”
In the end Yahoo asked for too much money. “Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer,” Ballmer added. They withdrew their offer in the best interests of their shareholders.
Ballmer thanked Yahoo’s management and the Board of Directors for considering their offer. Jerry Yang, co-founder and chief executive officer of Yahoo said "I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position. With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history…”
Yahoo is steadfast in “pursuing strategic opportunities that position Yahoo! for success and leadership in its markets,” according to Roy Bostock, Chairman of Yahoo! Inc.
Although Yahoo plans on focusing their efforts on profitability, they have not given up on search yet. Bostock says the company is investing in innovations “designed to revolutionize display advertising and facilitate closing the competitive gap in search.”
This could change the way Yahoo perceives their role in the Internet. It will serve to drive innovation with a new urgency. Bostock says Yahoo will “refined” their strategic focus to drive enhanced volume and yield and will reorganized their efforts on its most promising products and services.
By Dan Wilson - Best Syndication News Writer
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