Is It Just My Imagination, Or Are Microsoft and Yahoo Finally Coming Closer on Price?

Posted by: Rob Hof on April 30, 2008

So let’s see: First Microsoft offers $31 a share to buy Yahoo.

Yahoo scoffs and says nothing less than $40.

Long and winding road of leaks, bluster, stonewalling, threats, interminable blah blah blah in the press.

Today, Microsoft hints in the Journal that it might go to $32 or $33. Meanwhile, Yahoo’s board looks willing to come down to the high 30s, and some big Yahoo shareholders have suggested $35 might do it.

As Henry Blodget notes, that’s a mere $4 apart, more or less. That gap may still be a little too much for Yahoo CEO and cofounder Jerry Yang to bear. But the implied middle ground has to look more attractive to his shareholders, at least some of whom certainly will pressure the board anew to do the deal. And none of this rules out Microsoft upping the ante with a proxy fight or even taking a temporary hike. But it’s apparent Microsoft CEO Steve Ballmer prefers not to go more hostile than he has already if he doesn’t have to.

I hesitate to predict this deal finally will get done, since it has taken fully three months just to get a hint that it could finally happen. So I’ll just refer Steve and Jerry to some words of wisdom (mildly bad words, I’ll warn the easily offended) from this commenter today on Yahoo’s own Tech Ticker:


Weird. One side wants to offer 33 / the other will take 35. Where should we go with this. I just can’t get my arms around it. Me don’t know. Let’s call in Mr. Copernicus: (Among the great polymaths of the Renaissance, Copernicus was a mathematician, astronomer, physician, classical scholar, translator, Catholic cleric, jurist, governor, military leader, diplomat and economist.) Copernicus: What do you think? Copernicus: “Go with F’n 34 you giant A’holes.”

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Reader Comments

RAGHU

May 1, 2008 09:08 AM

if MSFT cant buy YHOO ...it is toast..
if YHOO goes with google..it will be a slave for ever to Google..
Yahoo..must atleast stay choose to stay competitive by taking on GOOG with better innovation..

If Yang is worried only about profit and not about sustained innovation..i think its time for him to go..

deal with MSFT will give YHOO the support it need to chip away at GOOG..

32-35..looks like a good deal!

Denise Shiffman

May 1, 2008 12:54 PM

Microsoft doesn't hold a proprietary lock on the Web. At the moment, they're an also-ran. They have to buy their way in and Yahoo is a good choice with its exceptional content, and broader email and groups users. It can't be a bad thing for Google to have an aggressive competitor.

Urban Mullen

May 1, 2008 02:21 PM

The logic is simple.

Microsoft cannot compete with Google.
Yahoo cannot compete with Google.

Conclusion: Microsoft plus Yahoo will not be able to compete against Google!

Stefan Kiryazov

May 3, 2008 07:39 PM

Urban Mullen, I thought addition didn't work exactly this way.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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