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Essay / Research Paper Abstract
A 9 page paper. On February 1, 2008, Microsoft sent an unsolicited bid to purchase Yahoo! This essay discusses the bid, the reactions from Yahoo! executives and from analysts and experts. The essay also discusses if there would be any antitrust issues in the U.S. or the European Union regarding this acquisition. Bibliography lists 5 sources.
Page Count:
9 pages (~225 words per page)
File: MM12_PGmsyho.RTF
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Unformatted sample text from the term paper:
become involved in a hostile take-over effort. This could change for many reasons. Microsoft needs to increase its power and market share on the Internet. Microsoft offered a very
high bid for Yahoo! $44.6 billion in cash and stock (TelecomWeb News Digest, 2008). That bid reflects a 63 percent premium when related to Yahoo!s existing trading price (TelecomWeb News
Digest, 2008). When the bid was announced, Yahoo!s share prices jumped by $1.50 to $27.35 (Clark, 2008). The bid would actually value Yahoo! stock at about $31 per share, a
welcome outcome to shareholders, since Microsoft would offer Yahoo! shareholders $31 per share they own or 0.9509 of a share of Microsoft common stock (TelecomWeb News Digest, 2008), a very
good deal. It is no secret that Yahoo! is struggling, in fact, the adjective most analysts use when describing Yahoo! is embattled (Clark, 2008). Microsoft offered to purchase Yahoo!
about a year ago and the offer was rejected (TelecomWeb News Digest, 2008). This time, Microsoft is making sure everyone knows they have made the offer by publicizing the letter
they sent to Yahoo! Chairman Roy Bostock and Yahoo! CEO Jerry Yang (TelecomWeb News Digest, 2008). In part, Microsoft writes that they believe "that a combination of Microsoft and Yahoo!
clearly represents the best way to deliver maximum value to our respective shareholders" (TelecomWeb News Digest, 2008, p. NA). The publicized letter also discussed the "significant benefits of scale in
advertising platform economics, in capital costs for search index build-out, and in research and development" (TelecomWeb News Digest, 2008, p. NA). These and other comments were most certainly addressing Google
(TelecomWeb News Digest, 2008). Another point Microsoft made in their open letter to the CEO and Chair of Yahoo! was that the market continues to be dominated by one player
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