Filed under: Forecasts, Deals, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Yahoo!’s (NASDAQ: YHOO) board of directors officially rejected Microsoft”s (NASDAQ: MSFT) already generous bid of $44.6 billion for the company. Not a surprise, and Microsoft will actually pay up for the deal to occur. Microsoft has to and they are now over a barrel. Let’s explore why.

Microsoft spent over $6 billion last year to acquire the best company in the on-line digital advertising/marketing space, aQuantive. To monetize this acquisition and effectively, or least try to compete with Google (NASDAQ: GOOG), Microsoft needs a much bigger platform in the search engine sector. No question, even with all of its might and brand name recognition, the best Microsoft could muster is a 3.9% market share for its MSN versus Google’s massive 76%. Yahoo! has 15% share and combined with MSN, the share rises to just under 20%. Still a small player versus Google but a viable one.

Continue reading Microsoft WILL pay up for Yahoo!

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This entry was posted on Tuesday, February 12th, 2008 at 5:36 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.