Microsoft has made an offer to buy Yahoo for about $44.6 billion dollars. If it happens, it will redefine the landscape of the internet. The move is meant to counter Google which dominates the Internet search and lucrative online advertising business.
"This is my last keynote, and it's the middle of this year in July that I'll move from being a full time employee at Microsoft to working full time at the foundation, as you heard. So this will be the first time since I was 17 that I won't have my full time Microsoft job, and I'm not really sure what that last day is going to be like. It could be a bit strange. What do you do on your last day? So I asked some friends to help me prepare for that," said Bill Gates, Chairman, Microsoft.
But Bill Gates is not willing to call it a day just yet, not till he ensures that the company that he created in hostel room years back is armoured to battle it out with the fast rising and fierce competitor Google.
And to do that, Microsoft army has made a hostile bid for another global internet giant Yahoo for a whopping $44.6 billion dollars.
An acquisition that will cost Microsoft $31 per Yahoo share, a 62 per cent premium over Thursday’s close.
Steve Balmer, Microsoft's CEO, spearheading the big ticket acquisition, in a letter to the Yahoo board wrote, “I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo. Microsoft believes that the combination of Microsoft and Yahoo clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers.”
It was in the end of 2006 that the two companies made a failed attempt to work together. But analysts now believe that Google's monopoly in the online space has made the case far more compelling.
The online advertising market is expected to double from $40 billion in 2007 to nearly $80 billion by 2010.
Experts believe that economies of scale have made the market dominated by Google ripe for this mega consolidation.