Microsoft offers $44.6 billion for Yahoo

analysis
Feb 1, 20082 mins

Ok, who knew that this week's earlier deals were just a precursor to Microsoft making an acquisition offer for Yahoo! It's been clear for a long time that Microsoft was running in third place (or later) in many of the new markets like search and online advertising. By making an offer for Yahoo, Microsoft is attempting to gain ground and catch up to Google. Rumors of this deal had surface in the past year, and Te

Ok, who knew that this week’s earlier deals were just a precursor to Microsoft making an acquisition offer for Yahoo! It’s been clear for a long time that Microsoft was running in third place (or later) in many of the new markets like search and online advertising. By making an offer for Yahoo, Microsoft is attempting to gain ground and catch up to Google. Rumors of this deal had surface in the past year, and Terry Semel’s resignation from the board may have been a recent clue to board room dissent.

This kind of a mega-deal has lots of complexities to it. There are overlapping technologies and conflicting strategies that can make it difficult to execute. And that’s assuming that Yahoo agrees to the terms and that US and European legislators approve the deal. So we are still a long way from certainty on this one.

It’s interesting to see what happens to some of the open source focus at Yahoo. Will Microsoft continue to move forward with technology like Zimbra that Yahoo acquired last year? (If they’re smart, they should –it’s more scalable than Exchange and gives Microsoft the opportunity to reach beyond just Windows.) And who knows maybe this one acquisition could make Microsoft a more open company…

At this stage there are mostly questions. So what do others think of this deal? Should Yahoo accept? How should things be integrated?