By SPA
Washington : Microsoft has offered to buy Yahoo! for $44.6 billion, a move long rumored and finally executed yesterday due primarily to Yahoo!’s continuing struggle against Google.
The Wall Street Journal reported that the offer “may be an attempt to get Yahoo back to the table after the companies held collaboration discussions in late 2006 and early 2007. Those talks included the potential of a merger proposal, but Yahoo told Microsoft in February it wasn’t interest in buyout talk.”
“While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing,” said Microsoft Chief Executive Steve Ballmer in a letter to Yahoo’s board.
He noted Yahoo’s decision at the time was based on the “potential upside” of its own plans and a “significant organizational alignment,” led by the long-awaited overhaul to its search-advertising system dubbed Project Panama.
“A year has gone by, and the competitive situation has not improved,” Mr. Ballmer wrote.
Yahoo shares jumped to $29.45 in premarket trading. Microsoft closed at $32.60 and dipped to $32 premarket. Google, which issued weaker-than-projected fourth-quarter results late Thursday and saw its stock fall in after-hours trading, was recently at $517 in premarket activity, down from its closing price of $564.30.