Watching the Microsoft attempt at acquiring Yahoo over the past few weeks reminds me a lot of a real estate transaction. You know, an offer is made and either countered or ignored and the waiting game starts. The buyer wants to get the best deal possible on the property while the seller hopes for either more money from the buyer or a better offer from someone else.
In this case, Microsoft made an initial offer of $31 per share, which Yahoo! felt was too low. After waiting to see if Yahoo! would cave, we saw evidence last Friday that there might be a deal in the works, so the Yahoo! stock price rose 7% to $28.67 on Friday, still below what Microsoft initially offered. Microsoft went up to $33 per share, a nice chunk of change for Yahoo! investors, but gave it up on Saturday because Yahoo! still thinks it is worth something more like $38 per share.
I’m no stock market expert, but it will be interesting to see where Yahoo!’s stock price is on Monday. I wouldn’t be surprised to see that 7% disappear and more.
Two questions:
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If Yahoo! is worth so much, why the recent layoff of hundreds of employees?
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If Yahoo! if so valuable, why is it giving up on its Panama pay per click system in favor of a partnership with rival Google? Panama is one of the things that would make the company more valuable.
I highly suspect a lot of Yahoo! shareholders will be pissed off at the collapse of a deal and that there will be lawsuits filed against the company for not taking care of its investors.
As an SEO, I rather like having three major players in the search engine market. That gives at least some small competition for Google.
But, I see Yahoo!’s holding firm on price in this market akin to a home seller in California holding firm for the price he could have gotten two years ago. It ain’t gonna happen any time soon, so keep on paying the mortgage or take a good offer.
Yahoo! didn’t take the good offer. So, apparently Mr. Yang and company have an inflated concept of the value of a company that has been trying to compete with Google for years and just keeps losing ground.
Don’t get me wrong. I really like Yahoo!, but they might have missed a one-time opportunity for a sale. Let’s just hope they can make that mortgage payment now that the noise of a possible takeover is past them and they can concentrate on what they do - search.
Of course, if Yahoo! stock does drop quite a bit, I’m sure Microsoft will answer the phone if Yahoo! calls.
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