Microsoft offers US $20 billion for Yahoo: report

Alex Zaharov-Reutt
Sunday, 30 November 2008 18:08

Your IT - Home IT

Did anyone really believe Ballmer when he said that he wasn't still interested in buying Yahoo? Well, truth be told, Ballmer always said he'd be interested in doing a deal for Yahoo's search business. Looks like the money dancer is firing his latest shot!

Doing the monkey dance over Jerry Yang's metaphorical CEO grave, Ballmer has, according to the UK's Times Online, decided to make his long awaited move to buy Yahoo's search business.

The reported offer? A still whopping US $20 billion, a few billion under half of what Microsoft was willing to pay just a few months ago when US $47.5 billion was on offer.

Of course, Microsoft wanted all of Yahoo back then, but Yahoo co-founder Jerry Yang thought he knew better.

The deal of the century (for Yahoo and its long suffering shareholders) evaporated when Yang and his board procrastinated, and then seemingly prevaricated when they expected the world to believe that an advertising deal with Google would save the day.

Since then, Ballmer has repeatedly denied being interesting in wanting to buy all of Yahoo, but he has always left the door open to “do a deal” with Yahoo on search. It would appear that deal is to buy Yahoo’s search business, while leaving Yahoo with its webmail, messenger and content businesses.

Clearly, the benefit for Microsoft is in having Yahoo’s No.2 search business carry Microsoft’s ads, via Microsoft’s online ad business, giving Microsoft a great slice of the online advertising pie currently held by Google.

While a Yahoo and Microsoft search deal would still need a lot of work to take on Google’s dominance, it would give Microsoft a needed shot in the arm to catch up – and earn a lot more online advertising search revenue.

So, are the directors in agreement this time? Please read on to page 2...