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Microsoft May Bump Up Yahoo Bid

by , 12:10 PM EDT, March 25th, 2008

Microsoft isn't ready to give up on its bid to buy out the Internet search company Yahoo and may raise its US$31 per share offer. Citigroup analysts expect that eventually the two companies will reach a buy out agreement despite Yahoo's talks with other companies, according to Reuters.

"While we continue to see no other competing bidders, we believe Yahoo is aggressively pursuing strategic alternatives," said Citigroup analyst Mark Mahaney. He added "We believe this could serve as a forcing function to a higher Microsoft bid."

Microsoft presented Yahoo with an unsolicited buy out offer at the beginning of February after the search company reported a 23 percent drop in earnings.

Yahoo rejected the buy out offer claiming that the bid undervalued the company. Microsoft responded reaffirmed its plans to continue pursuing the buyout by stating "Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal."

Yahoo has since revealed that it has been involved in talks with Time Warner to take over control of AOL. If approved, the deal would give Time Warner a minority stake in Yahoo and make Microsoft's take over attempt far more difficult.

Should Microsoft successfully take over Yahoo, the new assets would put the Redmond-based company in a better position to take part of the online advertising market from Google.

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View Name:Guest
Subject: Thick as a brick
Close Name:Dirt Road Posts: 1226 Joined: 24 Oct 2002
Subject:

Yahoo + MSN = MSN

A succinct way of saying, if MS buys Yahoo, the latter will effectively cease to exist… probably within a year. In the same timeframe, I would expect most of Yahoo's users to migrate elsewhere. The 360 folks are already moving en masse to Multiply.com, and there's a ton of webmail services out there. There are some Yahoo services that may not have a good alternative (finance) though, and those who really want to continue to use those services will stick.

The thing is, there are a lot of people who just don't trust Microsoft; they're not on MSN because they don't want MSN. Others won't care either way, but I suspect they'll be a small minority.

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