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Microsoft-Yahoo! - First Reactions Reverberate Around the Blogosphere

Everyone Out There It Seems Has a View on Biggest Takeover Bid of the Year (So Far)

"One of the most important (if not the most important) news for 2008, and we are just in February," remarked Nelson Cienfuegos of the In Digital Marketing blog. He and nearly 60,000 others bloggers have been vigorously chewing over the ins and outs of Microsoft's $44.6BN mega-bid to acquire Yahoo! Inc.

Cienfuegos continued:

"First it was Microsoft investing in Facebook, now Microsoft is making a bid to acquire Yahoo for $44.6 Billion in order to create a powerful merger that will help both companies compete against Google. Yahoo! continues to struggle against Google in the race for online-advertising revenue and Internet-search market share.

Yahoo stock closed at $19.18 at market close on Jan 31st 2008, this offer, $31 a share in cash and stock, is a 62% premium to yesterdays closing price. The market has yet opened and Yahoo stock is already at $30+ in premarket pricing. (Feb 1st 8:05am)"

Peter van Dijck immediately offered the blogopshere what he called A freestyle translation of the Microsoft offer to buy Yahoo. The first paragraph of Microsoft's official bid letter, for example. he reduced t a single sentence (here in bold):

January 31, 2008

Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer

Dear Members of the Board:

Yahoo is cheap right now, we want to buy it” I  am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock.

The rest of the amusing 'translation' is here.

Nick Stamoulis of Search Engine Journal took a more serious look at the news:

Google’s rise to prominence is due partly to Google AdWords, which has filled the search giant’s coffers with untold billions of dollars, a huge boon to the company’s total portfolio. Some of the acquisitions and improvements that Google has made could not have been possible without it. Is Microsoft banking on the same success? To be sure, if Microsoft did acquire Yahoo! it would have access to the second most popular search engine and the second most popular PPC advertising service. Combining Yahoo! Publisher Network with Microsoft’s own brand, which has recently struck a deal with the Wall Street Journal to display its advertising, could lead to Microsoft being the leader in online advertising. If that happens then the company could improve its search offerings.

But saying what is possible and what is probable are two different things. Even if improvements did come, it would be a long uphill climb. Then again, whether first or second in one’s industry, the bottom line is profitability. Maybe that’s Microsoft is looking at."

Sometimes the title of a blog post is comment enough. By way of demonstration:

Microsoft to Yahoo: Join Us, Join Us or Die (and Here's $44.6 billion)
by MG Siegler  

Microsoft's Yahoo bids speaks as much of failure as opportunity
by Dana Gardner  

Will Open Source World Welcome Microsoft-Yahoo Combo?
by The VAR Guy  

Microsoft/Yahoo Would Dominate Online Display
by Joe Mandese  

...and so on.

Dana Gardner was harsh: "So once again, we have Microsoft throwing outrageous amounts of money late at what should have been an obvious merger for them a long time ago. "

The harsh tone continues to the end:

"This proposed deal smacks of desperation, not multiplication of growth opportunities. But the price premium probably makes it inevitable. The only way to make this work is for Microsoft to spread itself more thickly as a media, advertising, technology, services, platform, tool -- everything to everybody. The risk is to be less and less of anything to anybody.

This may end up just driving more consumers and businesses into the waiting arms of the singularly understood Google, Apple, and IBM. And I for one will miss both Yahoo! and Microsoft because whatever they cobble together from the two won't be able to do the same that either did separately. Not a good recipe for success. Not any more."
The blogosphere was also the natural place to turn to for the first written accounts of this morning's conference call to discuss the news. Allen Stern for example nailed all three of the following key Redmond executive quotes:
Steve Ballmer: "This is a decision that I've thought long and hard about."

Kevin Johnson: "This is a business that requires massive capital investment and now you are seeing a lot of consolidation."

Ray Ozzie: "Microsoft has played a big part of the evolution of the web. We can further accelerate the move to the social web with this acquisition."

This will be one of the most closely followed mergers of all time.

More Stories By Jeremy Geelan

Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

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