Microsoft offers unsolicited $45 billion for ailing Yahoo

Microsoft offers $45 bln for Yahoo

www.chinaview.cn 2008-02-02 03:14:31

NEW YORK, Feb. 1 (Xinhua) -- Microsoft Corp. Friday announced a surprise offer to acquire Yahoo Inc. for an estimated 44.6 billion U.S. dollars, while Yahoo said it will study the proposal "carefully and promptly."

In a statement issued on its website, Microsoft said it has made a proposal to Yahoo's Board of Directors to acquire all the outstanding shares of the search company's common stock for 31 dollars a share.

The offer represents a 62 percent premium above the closing price of Yahoo common stock on Thursday.

Yahoo released a terse statement on its website Friday, saying it has received Microsoft' unsolicited proposal and that Yahoo's Board of Directors will "evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."

The latest move was seen as Microsoft's boldest bid to challenge Google's dominance in the online search and advertising markets.

Microsoft's proposal would allow the Yahoo shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo shareholders consisting of one-half cash and one-half Microsoft common stock.

"We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," Steve Ballmer, chief executive officer of Microsoft, said in a letter to Yahoo's Board of Directors.

"We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners," Ballmer said.

The online advertising market is growing at a very fast pace, from over 40 billion dollars in 2007 to nearly 80 billion dollars by 2010, Microsoft said.

"The combined assets and strong services focus of these two companies will enable us to achieve scale economics while reaching research and development critical mass to deliver innovation breakthroughs," said Kevin Johnson, president of the Platforms and Services Division of Microsoft.

"The industry will be well served by having more than one strong player, offering more value and real choice to advertisers, publishers and consumers," Johnson said.

Microsoft said the combination will create "a more efficient company with synergies in four areas: scale economics driven by audience critical mass and increased value for advertisers; combined engineering talent to accelerate innovation; operational efficiencies through elimination of redundant cost; and the ability to innovate in emerging user experiences such as video and mobile.

It said these four areas will generate at least 1 billion dollars in annual synergy for the combined entity.

Microsoft said it believes the proposed acquisition would receive all necessary regulatory approvals and expects that the proposed transaction would be completed in the second half of 2008.

Wall Street advances on Microsoft's bid for Yahoo

www.chinaview.cn 2008-02-02 05:50:45

NEW YORK, Feb. 1 (Xinhua) --

U.S. stocks rose Friday on Microsoft Corp's bid for Yahoo overshadowed news that employers cut payrolls for the first time since 2003.

Microsoft offered 44.6 billion U.S. dollars, or 31 dollars per share, for Yahoo in a mix of cash and stock. The offer represents a hefty 62 percent premium to Thursday's closing price of Yahoo.

On Friday, the Labor Department reported that nonfarm payrolls fell by 17,000 in January, marking the first contraction of the labor market in more than four years.

Meanwhile, the Institute for Supply Management said its index of manufacturing activity rose to a reading of 50.7 from 48.4 in December.

The Dow Jones industrial average was up 92.83 points, or 0.73 percent, to 12,743.19. The Standard & Poor's 500 Index was up 16.85 points, or 1.22 percent, to 1,395.40. The Nasdaq Composite Index was up 23.50 points, or 0.98 percent, to 2,413.36.

For the week, the Dow rose 4.4 percent and the S&P gained 4.9 percent, marking the best performance for both benchmark indexes since 2003. The Nasdaq rose 3.8 percent, its biggest weekly gain in nearly 18 months.

Editor: Mu Xuequan

Ailing Yahoo to chop work force by 1,000

www.chinaview.cn 2008-01-31 13:57:37

BEIJING, Jan. 31 (Xinhuanet) --

Yahoo Inc.'s financial crisis deepened at the end of 2007, forcing the slumping Internet icon to lay off as many as 1,000 workers.

The Sunnyvale-based company disclosed the upcoming 7 percent reduction in its 14,300-employee work force Tuesday while reviewing a 23 percent drop in fourth-quarter profit and a cautious 2008 outlook. The bad news sent Yahoo shares sliding to their lowest levels in more than four years.

In a prepared statement, Yahoo Chief Executive Jerry Yang warned of looming "headwinds," indicating that the company's turnaround efforts aren't likely to be effective off this year.

"I'm surprised by how slowly they seem to be moving," said Cantor Fitzgerald analyst Derek Brown. "Yahoo still has quite a bit of work ahead."

Yahoo shares dropped 2.09 U.S. dollars, or more than 10 percent, in extended trading Tuesday after finishing the regular session at 20.81 dollars, up 3 cents. The company's market value has plunged more than 50 percent since the end of 2005, wiping out 35 billion dollars in shareholder wealth.

Yang, Yahoo's co-founder, took over as CEO seven months ago in an attempt to shake things up, but his overhaul hasn't impressed Wall Street so far. The mass firings represent Yang's most dramatic move yet.

Yahoo didn't specify which areas of its operations will be trimmed in the company's biggest purge since jettisoning 650 workers in the aftermath of the dot-com bust seven years ago. Management indicated some employees whose current jobs are eliminated may be offered new assignments in other parts of the company. Further details are supposed to be released by mid-February.

Yahoo expects to absorb a first-quarter charge of 20 million dollars to 25 million dollars to pay for severance costs and other expenses incurred in the layoffs.

(Agencies)

Editor: Gareth Dodd

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