Microsoft, the multinational computing corporation is considering rebidding for the web portal and search engine Yahoo!. In 2008, Microsoft offered a bid of $44.6 billion but was unsuccessful in acquiring the company. Yahoo felt that the bid had greatly undervalued its company. 3 years later, Microsoft is seeking to pursue Yahoo again though the decision has not yet been finalized.
The speculation of Microsoft’s bid cause Yahoo’s shares to jump 10.1% to $15.92 on NASDAQ. Microsoft shares increased 2.2% at $25.89.
With Microsoft currently owning the Bing Internet search engine and the MSN web portal, owning Yahoo would give it over 30% of the US search market. This would allow it to be a significant competitor to Google.
With Google currently holding the greatest power in the search engine market, it would be ideal for Microsoft to take this opportunity to become a powerful competitor. Though Google is most well known for its search engine, it is also known for Gmail and Youtube. If Microsoft were to buy Yahoo, they would control Yahoo mail, as well as Hotmail. This would be sure to knock out smaller competitors such as AOL, and leave Microsoft and Google as the main web-email service.
Blog Schumpeter, from the economists, commented on the company’s alliance with Microsoft and AOL on November 8th to “bolster its fortunes”. It also says Yahoos assets come not only from its search engine, but its email service and Japan sector. Its current deal with Microsoft and AOL allow it to “tout” each other’s unsold display ads.
http://www.economist.com/blogs/schumpeter/2011/11/yahoo
http://in.reuters.com/article/2011/10/06/idINIndia-59733520111006