James Joyner over at OTB notes that Microsoft has submitted an offer to buy Yahoo for B$44.
$44 billion would be quite a premium, and James wonders what the fuss is about.
The BBC Article he quotes wonders openly:
According to its letter to Yahoo, Microsoft attempted to enter talks about a deal a year ago, but was rebuffed because Yahoo was confident about the “potential upside” presented by the reorganisation and operational activities that were being put in place at the time. “A year has gone by, and the competitive situation has not improved,” Microsoft’s letter said.
But there has been some concern about the price that Microsoft is offering. “To me, the premium seems exorbitant, for what is a dwindling business,” said Tim Smalls from the brokerage firm Execution LLC. “I personally don’t see how the synergies of Microsoft-Yahoo is going to take on Google.”
I don’t either, at this stage. Then again, I can’t think of a better pairing to make a go at Google.
The real boon for Microsoft isn’t in the search engine business, though that would be substantial. The real boon is Yahoo mail and Yahoo (IM) chat businesses… Microsoft’s chat and Hotmail haven’t exactly been leading… and in those areas, Yahoo has been Microsoft’s biggest completion…and Google hasn’t exactly been competitive there, either. Microsoft would have a working monopoly in those areas, then. It won’t take out Google, but it IS a real plus for Microsoft.
Yahoo is up $10/share in pre-market trading this morning.
