Microsoft offers to buy Yahoo | News | Al Jazeera

Microsoft offers to buy Yahoo

Proposed internet deal worth $44.6bn aimed at joining forces against Google.

    Yahoo has been losing market
    share to Google [AFP]


    "We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," Steve Ballmer, Microsoft chief executive, said in a statement.

     

    However a US justice department spokeswoman told AP its antitrust division would be "interested in looking at the competitive effects" of any such transaction.

       

    Yahoo was not immediately available for comment.

     

    'Dwindling' Yahoo

       

    The company has been losing market share to Google and warned earlier this week that it faced "headwinds" in 2008, forecasting revenue below Wall Street estimates.

       

    On Thursday, Yahoo disclosed that Terry Semel, non-executive chairman, was leaving the board, ending its formal ties with the former chief executive, who is credited with reviving the company and then losing touch.

       

    Semel, replaced as CEO last June, had faced heavy criticism for failing to move faster to meet both rival Google's challenge in web search and advertising and, more recently, the rise of social networking sites such as MySpace and Facebook.

       

    US stock futures jumped on the Microsoft news, which offset a disappointing earnings report from Google late on Thursday.

       

    Paul Mendelsohn, chief investment strategist at Windham Financial Services, said a deal made sense.

      

    "Yahoo is having a really tough time competing against Google. Whether it's a good price, I can't see anybody else who is going to outbid Microsoft," Mendelsohn said.

       

    Microsoft said it had identified four areas that would generate at least $1bn in annual synergies for the combined entity.

       

    Tim Smalls, head of US stock trading at brokerage firm Execution LLC, was less enthusiastic about the benefits of a tie-up.

       

    "Shocking! To me, the premium seems exorbitant, for what is a dwindling business. I personally don't see how the synergies of Microsoft-Yahoo is going to take on Google," Smalls said.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    America's Guns: Secret Pipeline to Syria

    America's Guns: Secret Pipeline to Syria

    How has the international arms trade exacerbated conflict in the Middle East? People and Power investigates.

    I remember the day … I designed the Nigerian flag

    I remember the day … I designed the Nigerian flag

    In 1959, a year before Nigeria's independence, a 23-year-old student helped colour the country's identity.