Microsoft goes after Yahoo

Steve Henn Feb 1, 2008


Renita Jablonski: Feeling hungry this morning? Microsoft is.
The software goliath has offered to gobble up Yahoo with a $44 billion takeover bid. Marketplace’s Steve Henn reports.

Steve Henn: The deal offers Yahoo’s shareholders a 62 percent premium above what their stock was trading at just yesterday. But analysts say unlike the late 90’s, when Microsoft seemed unstoppable, today’s deal is a glaring example that executives there are increasingly panicked about a certain search engine that must not be named.

Microsoft explained its bid in a statement today saying the market for online advertising is quote, “increasingly dominated by just one company.” Read: Google. Even after a merger, the combined companies would have just 27 percent of online search advertising, and they’d trail Google by 13 percent in all online ads.

But Microsoft’s executives say a merger with Yahoo would give the combined company the resources and market share to become a serious competitor. Before that happens, the final details of a deal need to hammered out and win the blessing of federal regulators.

In Washington, I’m Steve Henn for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.