Microsoft bids $44.6 billion for Yahoo!

Post Image This is no longer just a rumor, this is the real deal. I’ve never seen so many articles on the same topic so fast on Techmeme, but I guess I shouldn’t be surprised. This is big, big news! Here’s what they had to say in the press release:

The combination will create a more efficient company with synergies in four areas: scale economics driven by audience critical mass and increased value for advertisers; combined engineering talent to accelerate innovation; operational efficiencies through elimination of redundant cost; and the ability to innovate in emerging user experiences such as video and mobile. Microsoft believes these four areas will generate at least $1 billion in annual synergy for the combined entity.

Microsoft has developed a plan and process that will include the employees of both companies to focus on the integration of the combined business. Microsoft intends to offer significant retention packages to Yahoo! engineers, key leaders and employees across all disciplines.

The offer is a combination of cash and stock. Microsoft thinks they can have regulatory approval and a completed deal in the second half of 2008.

Look out Google!

Read: Techmeme

Mindboggling – Microsoft buying Yahoo?

Post ImageEvery once in a while a rumor comes along that is so outlandish, so crazy, so never-gonna-happen, that it makes you really hope it does happen! The latest such rumor is that Microsoft offered to buy Yahoo, a rumor that has sent investors into a craze:

Analysts said reasons for the heightened interest in Yahoo call options ranged from recent rumors that software company Microsoft Corp. might be seeking to partner or merge with the Internet company, to bullish expectations for the company’s upcoming fourth quarter earnings report.

“The speculative activity in short-term calls might reflect the recent talk about an alliance with Microsoft,” Ruffy said.

Such rumors have been rampant since Google Inc. recently fortified its lead in the Web search market by taking a 5 percent stake in Time Warner Inc.’s AOL Internet unit.

On Sunday the Los Angeles Times cited what it called speculation that Yahoo had rebuffed an $80 billion bid from Microsoft as too low.

Did you see that? Eighty billion dollars! I can’t quite wrap my head around that amount! According to Microsoft Watch, the software giant currently has about $40 billion in cash.

There’s too much to consider if such a merger were to take place that I won’t even bother unless it actually happens.

Read: Reuters

Microsoft to buy AOL?

Post ImageA number of publications including the New York Post and Reuters reported this morning that Microsoft is in early talks to make a deal with the AOL unit of Time Warner:

“There have been talks on ways Microsoft and AOL assets can be better leveraged and they’ve taken place over the normal course of business …,” the source said, calling reports of a joint venture “way overblown.”

Although the talks, which have taken place over several months, could advance, nothing was imminent, the source added.

Low-ball estimates for AOL are about $10 billion with improvements possibly doubling that valuation, Richard Greenfield, an analyst at Fulcrum Global Partners, said.

If Microsoft were to buy the assets, you can bet they’d merge it with the MSN unit. Otherwise, the deal could simply be some sort of cross-advertising agreement, which would be good for Microsoft as they’d probably acquire access to the vast content that Time Warner owns. AOL has been dying a slow death for years now, so I’m not sure what Microsoft would want with the company besides advertising and content possibilities.

Read: CNET

eBay acquires Skype

Post ImageI posted about the rumored deal on Thursday of a marriage between eBay and Skype. Today, the two companies announced that eBay would purchase Skype for $2.6 billion dollars:

Company executives said Monday that eBay plans to pay $1.3 billion in cash and $1.3 billion in stock to the global communications company. It has agreed to hand over up to an extra $1.5 billion, for a total payout of more than $4 billion, if Skype meets certain financial targets by 2008, according to a presentation to investors on Monday morning.

As I said previously, I am not sure how smart this was for eBay. Surely purchasing PayPal back in 2002 made a lot of sense, and they immediately saw a return on investment. And it was probably a rather large return, if I had to guess. Skype doesn’t make a lot of money, and might not ever make that much money.

If all the deal turns out to be is a communications network for eBayers, it’ll be pretty clear that it was a waste of money. eBay could probably have built their own system for far less. Who knows though, it might turn out to be a very wise investment. Maybe Meg Whitman knows something the rest of us don’t. Time will tell.

You can read the official press release here.

Read: CNET