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Negotiations between Yahoo and Microsoft

Negotiations between Yahoo and Microsoft

After the breakdown of the negotiations between Microsoft and Yahoo, the majority of the industry analysts and Microsoft's own spokesmen, were not expected to resume them again. Over the weekend, news leaked that Microsoft has resumed negotiations to buy Yahoo's search business for $ 20 billion, although neither company has wanted to talk about a possible deal yet.

According to sources who leaked the news to The Sunday Times, Microsoft has been working on a deal to acquire Yahoo's search business and introduce a new management team, led by former AOL CEO Jonathan Miller and former AOL chairman. Fox Interactive Media, Ross Levinsohn. Supposedly, Microsoft would obtain a 10-year operating agreement to manage the search business, with a two-year purchase option, being able to acquire it for 20,000 million dollars. Yahoo would retain control of its other services, such as email, IM, and other content services. According to the report, the main directors of both Microsoft and Yahoo have already reached an agreement on the "general terms", but they have yet to outline a final agreement.

Obviously, neither Yahoo nor Microsoft have wanted to speak to the press on the subject.
Just a few months ago, the first Microsoft and Yahoo deal fell through after many months of negotiations. Initially, in February, Microsoft had made a purchase offer for Yahoo for $ 44.6 billion in cash and shares, but Yahoo backed down, claiming that the offer "significantly devalued" the company. Instead, Yahoo wanted a figure over $ 56 billion (or about $ 40 per share). Microsoft tried unsuccessfully to lobby by maintaining its initial offer, but Yahoo resisted time and time again, until finally Microsoft decided to abandon its initiative in May.

Meanwhile, Yahoo signed a temporary search advertising deal with Google that some believed would lead to something else. And it almost does, if the US Department of Justice had not stepped in, thwarting the intentions of all parties involved. Finally, Google decided last month that it had had enough and withdrew from the deal, leaving Yahoo with no options and its stock price plummeting.

Now, with the departure of former Yahoo CEO Jerry Yang, and Microsoft's Steve Ballmer's hint that a search deal might still be possible, both companies are likely trying to organize. something. And if Yahoo wants to refloat its ship (which is already half sunk), it better act quickly, because it is unlikely to be able to count on many other suitors in such a tough economic time.
Will Yahoo manage to stay afloat with this deal? As it stands, the company is losing market share to Google at a good pace, and the failure of the deal that the two rivals had reached means that Yahoo will not have the cash it planned to use to improve its search offering. so getting rid of searches may not cost the company as much as it did a year ago.

In the meantime, a cash injection could allow you to make an acquisition (talk about AOL leftovers) that bolsters the parts of your business that are doing the best, such as visual advertising and your portal traffic. On the other hand, with advertising revenues falling due to the financial crisis, an injection of money could also act as a raft to navigate the difficult waters of the economy.

Source: ArsTechnica

Video: Microsoft-Yahoo Merger (September 2020).