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March - 2008 - issue > Tech Tracker
Stalemate-over-Yahoo-Microsoft-deal
Christo Jacob
Friday, February 29, 2008
While Microsoft’s bid to buy out Yahoo remains a standoff, it has galvanized the latter’s board. However, analysts find that in the long run this ‘Tom and Jerry’ game will create an opportunity for Google to take advantage in the market.

Yahoo had formally rejected Microsoft’s $44.6 billion offer, saying it was inadequate. Yahoo evaluated themselves as $56 billion, which comes to about $40 per share. However, Microsoft is not ready to drop the bid and has hinted to the Yahoo board of directors that it may take a bid directly to the Yahoo shareholders. Alarmed by the risky move, Yahoo recently offered all employees enhanced severance packages.

While many analysts say the marriage would expand Microsoft's Web presence and boost its online advertising revenue base, some see it as a distraction. Many analysts have cautioned Yahoo that the company's shares would plummet without a Microsoft deal. Alerted by Microsoft’s hard steps to foray into the search engine game, Google also has made a proposal to acquire Yahoo.

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