Okay, here’s the good news: it looks like there may finally be some serious competition to Google’s domination of the online world. After all, competition benefits everyone in a free market, right?
Now here’s the bad news: the competition could very well end up being Microsoft. Oh brother!
Bloomberg.com is reporting that Microsoft is attempting an “unsolicited takeover” of Yahoo Inc. Microsoft has put in a $44.6 billion bid to buy out Yahoo lock, stock and barrel. The offer breaks down to $31 per each individual share of Yahoo stock, and represents a staggering 62% increase on the current price of shares held by Yahoo investors.
With an offer so large, you have to believe that shareholders are taking it seriously, especially in light of Yahoo’s recent quarterly earnings, which fell a belt-tightening 23% in the fourth quarter of 2007.
Microsoft has been “chomping at the bit” for some time to gain a stronger online presence, and beef up their fledgling Microsoft Live search engine. Purchasing Yahoo would give Microsoft access to a much greater worldwide search network, all of Yahoo’s portal and social networking sites, and make them the only true competition for Google.com.
Microsoft is claiming that by taking over Yahoo, operating costs for the two companies could be decreased by as much as $1 billion per year. Although Yahoo corporate executives have been tight-lipped about the proposed merger/takeover so far, a company representative said that Yahoo plans to evaluate the proposal “promptly.”
Yahoo shareholders have taken a bit of a beating over the last few years. Selling out to Microsoft would provide them with a type of “golden parachute” to dump their Yahoo stock, while realizing a sizable profit. Overall, the value of Yahoo shares have declined by nearly 50% over the past two years, leaving shareholders anxious, and the company ripe for an “unsolicited” takeover attempt.
But while Yahoo has been floundering, Google.com continues to thrive; the company reported a staggering 52% increase in sales the fourth quarter of 2007, representing Google’s 14th consecutive quarter of increased sales.
Even though Yahoo’s search network has barely made a dent in Google’s online search domination, when combined with Microsoft’s Live search service, it could represent as much as 35 to 40% of North American search engine traffic, giving the combined Yahoo/Microsoft company a fighting chance to compete against Google online.
Many Web experts have been praying for the day when Google finally receives some serious competition, but few of them will be relieved that that competition might finally come from Microsoft, a near-monopoly in its own right. So while having a serious competitor to Google’s dominance sounds like a good thing, the fact that it could be Microsoft leaves many in the IT industry feeling uneasy about the possible merger, and the future of the web.
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[...] With the announcement last week that Microsoft is attempting to “buy out” Yahoo Inc. in its entirety with a $44.6 billion “unsolicited bid,” many Yahoo employees fear that a successful merger with Microsoft would rob Yahoo of its quirky and unashamedly humorous culture. [...]
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