There are many financial bloggers who think that Yahoo should be happy to have a somewhat generous buyout offer from Microsoft. Certainly it gives Yahoo's suffering shareholders something to be happy about.
It was reported this weekend that Yahoo's board has rejected Microsoft's offer, contending that it undervalues the company. Maybe, maybe not.
As I have written before, this is an ill-conceived merger. It is marked by duplication and overlap of functions and features. There is no special synergy, just a trust that scale will make a difference, bigger is better and some costs can be wrung out of the overall organization. I have written more on this in a previous post ("Microsoft and Yahoo - bigger may not be better").
If Yahoo were to merge with Amazon or eBay, one could say that something new and powerful was being developed. Dominant e-commerce combined with a dominant portal might be an interesting concept where some synergies may indeed be found. The synergies resulting from a combination of a dominant online portal and a dominant software developer are much less clear.
Yahoo's board is right to demand more cash. This takeover by Microsoft will merely result in thousands of layoffs and a bigger number two player in the online ad wars. Interestingly, Yahoo is already number two. What advantage do they get hooking up with number three?
If Yahoo is going to fall into the hands of Microsoft, they might as well get paid handsomely for it.
Sunday, February 10, 2008
Yahoo board does the right thing
With the S&P 500 falling to a fresh two-week low, the big question is whether this is a correction, or the start of a major trend on the downside?
Our friends at MarketClub have just finished a short video that details many of the key concerns that we have for this market. If you have not seen one of their videos before you may enjoy this one. This video does not require a plug-in.
The video is free to watch and there is no need to register. I would love to get your feedback about this video on our blog.
I highly recommend students of the market take a few minutes and watch this timely video. Even if you’re a seasoned pro you may find what you see interesting and therefore profitable.
As always, this informative video is complimentary with no strings attached.
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