Sunday, February 10, 2008

Microsoft - Yahoo takeover (continued....)

It appears that Yahoo's board is going to send a 'no thanks letter' to Microsoft on Monday, and share a little 'bed room' with Google, to stave off a hostile takeover attempt.

There's one thing I've learned from reading numerous posts over the past week, is that some 'get it' and some don't.

In perspective. If Microsoft has any second thoughts, this is their way out. The software giant could certainly buy a lot of good (very good) companies for 44 billion and some stockholders aren't too happy about them using up their cash reserves or borrowing to do this deal. This IS a company that just posted two strong quarters (long overdue) and even managed to nudge their stagnant stock a bit. Microsoft is doing just fine.

Huge profits in search? Absolutely. Is this acquisition the right way to get there?

It doesn't matter what I think.

If Steve Ballmer's history holds true, he will move forward with this buy-out with 'whatever it takes'. Literally.

We'll make a prediction that nobody's yet talking about.

If Microsoft ups the bid, or finds another way to approach Yahoo's stockholders directly, Micorsoft could possibly be facing a fierce fight from their own stockholders.

After all, two strong quarters and lots of cash, along with one of the largest market caps in the world (and a dividend) is 'kinda nice'?

Enter Google: Another fact that nobody seems to be talking about is that Google's stock (currently in the low 500's) was never split. In other words, most of Google's stock is being held in fewer hands (institutional investors, mutual funds, etc.). If Google gets involved ,they have much less 'reporting' to do. IE: Google can move here to help Yahoo with a quick consensus.

Prediction? We said it earlier in the week. Because of the players involved, mark this one a 'done deal'.

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