Microsoft eyeing Yahoo buyout again
Microsoft is once again toying with the idea of acquiring Yahoo, though it would likely be a different type of deal than the one proposed in 2008. And a lot cheaper as well.
In 2008 Microsoft came very close to buying Yahoo, with a $45 billion offer for the company being turned down. At the time Yahoo’s share price was over $20-per-share. Then Carol Bartz took over as CEO and the share price fell to just over $10-per-share. It’s now settled around the $15-per-share mark, and the Yahoo board is weighing up its options for the future, one of which is selling lock, stock, and barrel.
According to The Wall Street Journal Microsoft is eyeing a deal in conjunction with private equity firm Silver Lake Partners and the Canada Pension Plan Investment Board. Microsoft would act as financier, bankrolling the deal, and gaining both preferred stock and a say in the future direction of the company. Which is a necessity thanks to the search pact the two companies have in place, struck after the 2008 deal fell through.
It was only last week, during a discussion at the Web 2.0 Summit, that Microsoft CEO Steve Ballmer told John Battelle, “You know, times change. When you ask any CEO [a question like that] after the market has fallen apart, it’s ‘hallelujah. Sometimes, you’re lucky.” Ballmer was, of course, responding to a query concerning how he now feels about the failed Yahoo takeover.
In light of that comment it seems inconceivable Microsoft would want to try and acquire Yahoo again, but this time around it’s all about protecting the search deal. During the same discussion Ballmer also noted, “There’s a lot of great things at Yahoo. Our alliance is important. They have one of the biggest, most vibrant audiences on the Internet.”
If Google succeeded in acquiring Yahoo at this point then I can’t see that pact lasting much longer. Which would be damaging for Microsoft and its ongoing effort to influence online search and advertising. In other words they’d be ceding the market completely to Google. Which Ballmer would not want to see happen on his watch.
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October 24th, 2011
Microsoft eyeing Yahoo buyout again
And so does Google.