Kottke on the failed Microsoft/Yahoo deal:
On Jan 31, the day before Microsoft offered $31/share for Yahoo, YHOO was at $19.18/share (market cap: $26.4 billion) and MSFT was at $32.60/share (market cap: $303.6 billion). At the close of trading today, YHOO closed at $24.37/share (market cap: $33.5 billion) and MSFT was at $29.08/share (market cap: $270.8 billion). In other words, the Microsoft offer increased the value of Yahoo! Inc. by more than $7 billion and decreased the value of Microsoft Corporation by almost $33 billion. In still other words, in attempting to take Yahoo by force, they let an amount equal to Yahoo slip through their fingers. Why isn’t anyone writing about Yahoo’s amazing stock gains and Microsoft’s plunge?
It was curious how lots of the coverage, particularly in the tech blogs, was focused on what a disaster this was for Yahoo when, going by the short term numbers at least, it seems more like a problem for Microsoft.
The big news in the tech/business world today is Microsoft’s unsolicited $44.6 billion dollar offer to buy Yahoo. I wouldnt really be affected by the merger directly. I don’t really use any of Yahoo’s or Microsoft’s products. I’m starting to use Flickr and I use Yahoo’s fantasy sports (by far the best) for my leagues but other then those two thats about it. I canceled my Hotmail account years ago. I do use a PC at work but I’ve got an Apple at home that I like more; Google for most of my online stuff.
This seems like a pairing that would be very hard to pull off successfully (something AOL-Time Warner learned the hard way). I can understand joining to fight Google but there has to be a larger purpose then just that, right? And what would happen to all the overlapping products? Would they merge them? Not to mention you’d be talking about a new company with approx. 90,000 employees, thats not nothing. So many questions, I guess it will be interesting to see what happens.