Microsoft determined to get Yahoo
February 13, 2008
After the internet company Yahoo rejected the $45 billion takeover bid the industry giant Microsoft is all determined to get it under its belt. Now there is all possibility of witnessing a drawn out battle by Microsoft to unseat Yahoo’s board.
On the rejection of the takeover bid, Yahoo officials said that the entire management of the company had unanimously decided after careful evaluation of the bid that it undervalued the brand substantially. They said that the online demand and growth prospects of the company along with its recent investments in the internet advertising sector have not been taken into account at all. Now that the company has chosen to defy Microsoft’s offer it has set the scene for a battle of the giants in the Silicon Valley. Now the entire world’s eyes are set on Microsoft to see what their move is going to be. Will they increase their offer and bid again or will they choose to play it tough by trying to install their choice of directors in the Yahoo board. From reliable sources it was found that the initial letter that was sent by Microsoft to Yahoo said that they had the option of doing this the hard way or the easy way. From recent developments we are led to believe that Yahoo is ready to play hardball with the computer tycoon and ready to take the challenge on.
However the Yahoo officials are almost certain that the chances of them remaining independent are very slight and this is obvious from some of their recent remarks. Yahoo through various such remarks and statements have left the options open for further negotiations with Microsoft.
The offer of $31 per share made by Microsoft was at a premium of 62% to Yahoo’s stock price, but it is rumored that Yahoo was adamant on getting at least $40 per share. All the on going processes have led to an increase in Yahoo’s share price.
The sudden move by Microsoft to take over Yahoo is believed by many to become a credible opponent for the Google Company. They want to compete with Google, who with their advanced search technology was able to build a dominant position in the international market for online advertising. Microsoft is eying this advertising sector as the money that is being spent in this field is predicted to increase by two thirds to almost $75 billion by the end of 2 years.
It is rumored that Microsoft, chaired by Bill Gates, would start selecting candidates to stand for Yahoo’s board. Since the last date for nomination of names into the board is 13th of March the final result of whether or not a takeover should take place would depend solely on the votes by the Yahoo investors. But since this is a disruptive process it might end up in the resignation of some of the key staff in Yahoo. So Microsoft will have to think over any of its decisions with utmost precaution.
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