The rise of the hostile techover
Share Now on:
The rise of the hostile techover
TEXT OF STORY
Lisa Napoli: The courtship continues. Word is that bigwigs from Microsoft and Yahoo had a face-to-face meeting on Monday. It’s said to be the first meeting since Bill Gates and friends made an unsolicited bid for Yahoo, worth nearly $42 billion.
Apparently, the get-together wasn’t a negotiation. Microsoft presented its vision of a combined company, and sources told the Wall Street Journal that the Yahoo guys mostly listened.
Now, hostile takeovers used to be something reserved for Wall Street, not Silicon Valley. Marketplace’s Sam Eaton has another instance.
Sam Eaton: Video game maker Electronic Arts of Sim City fame yesterday launched a $2 billion hostile takeover bid. Its target? Take Two Interactive and its lucrative Grand Theft Auto franchise. Meantime, Microsoft continues its own quest to acquire Yahoo through a hostile buyout.
Technology Analyst Rob Enderle says these stealthy corporate tactics wouldn’t have been possible a few years ago. But he says the slumping economy has changed the rules of the game.
Rob Enderle: The employees who typically might leave in the face of a hostile acquisition don’t really have any place else to go, and so they’re much more likely to ride this out.
Enderle says that’s key to taking over a tech company, since the creative talent is often more valuable than the brand.
But he says takeovers can backfire even in rough economic times. Google, for instance, could cherry pick all of Yahoo’s key employees before a Microsoft deal goes down. It’s a move that Enderle says would be a lot cheaper than buying the company outright.
In Los Angeles, I’m Sam Eaton for Marketplace.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
