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Microsoft Wants To Acquire Yahoo; More Yahoos To Lose Jobs
While I thought Yahoo should acquire AOL, this morning we learn that Microsoft wants to acquire Yahoo in a deal worth $44.6 billion in cash and stock; provides 62 percent premium to current trading price for Yahoo! shareholders.
It absolutely makes sense for Microsoft with Yahoo trading (Nasdaq: YHOO) at a 50% “discount” off its 52-week high. The deal gets Microsoft what they have wanted for 10 years; a strong consumer Internet play.
I won’t copy the entire letter Microsoft CEO Steve Ballmer sent to Yahoo — you can read it on the Microsoft site — basically it speaks to the operational, transactional and financial effectiveness a deal like this would bring to both Microsoft and Yahoo.
The bottom line is whether a combined Yahoo/Microsoft is a stronger competitor to Google than each on its own. What do you think?
What does it mean for Yahoo employees? If you thought 1,000 layoffs reported earlier this week were a lot off the 12,000 total employees, get ready for more mass firings. Microsoft wants Yahoo for its technologies, consumer focused products like Flickr and Delicious, and the customers of their ad products. Sadly, I’ve been through many acquisitions on the buyer side and the seller side and the seller always loses massive amounts of blood.
I said last night that 2008 would be a very interesting year – deals like this one combining two of the three mega Internet powers show exactly that.