I woke this morning to the news that Microsoft has tendered a $44.6 billion ($31/share) offer to buy Yahoo in a cash and stock deal. (And here I thought I was getting up early to pack for vacation!).
The acquisition has been rumored and speculated on for a year or more, and even in the dawns early light there’s plenty of commentary on whether the deal should or should not happen, whether it makes sense, what the combined company might look like, what Microsoft ought to do with the Yahoo asset.
When rumors of a possible merger circulated last May, Om Malik called a Microsoft-Yahoo merger a “bad idea.” He wrote:
Marrying a company with Internet DNA (Yahoo) with another who can’t take a step forward without turning its neck twice (looking back at the PC) is not that easy. Will this deal become the 21st century version of AOL-Time Warner merger, and a high-water mark for the current boom?
One-time Wall Street wonder-analyst Henry Blodget called a potential merger a “smart strategic move” but advised Microsoft to create a new company Internet company in the process.
Would it be a smart strategic move for Microsoft and Yahoo to combine forces? Absolutely. Is the best way to do this to have Microsoft suck Yahoo into the massive Windows/Office empire? Absolutely not. If Microsoft buys Yahoo, Microsoft should immediately spin the Yahoo-MSN business out as a separate company. If it doesn’t, both Yahoo and MSN will die
Now that the deal has gone from rumor to announcement, there’ll be plenty of jockeying around these two, and a myriad of other, opinions. I’ll leave that speculation to folks who are far better arm-chair quarterbacks than I. But what I will say is this:
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