General Business

Bill Gates Says Yahoo or No Yahoo, Microsoft Is Going after Google

And increasing investments in its web business

By Marius Oiaga, Technology News Editor

19th of February 2008, 10:32 GMT

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For Microsoft, Yahoo would deliver a healthy contribution to its swings towards Google's jugular. However, the Redmond company is not just sitting around and waiting for the finalization of the Yahoo acquisition in order to get the nod. Microsoft Chairman Bill Gates indicated that with or without Yahoo, the company will target the web and go after Google. Gates revealed that Microsoft will continue to pour money into its web division

even if Yahoo comes on-board, and even more so without the Sunnyvale Internet giant, hoping that its investment in web search will ultimately pay off and allow it to compete with Google on equal terms.

On February 1, 2008, Microsoft went public with a $31 per share unsolicited acquisition proposal for Yahoo, totaling the deal at an estimated $44.6 billion. The bid is the brainchild of Microsoft Chief Executive Office Steve Ballmer, but also has Gates' blessing, and represents a shift in the company's policy to focus on minor acquisitions. Yahoo responded to the unsolicited bid with a shaky no, leaving enough room for Microsoft to up the stakes and offer a reported $35 to $40 per share, by arguing that the initial acquisition proposal was undervaluing the company.

"We can afford to make big investments in the engineering and marketing that needs to get done. We will do that with or without Yahoo," Gates said in an interview for Reuters. "But we also see that we'd get there faster if the great engineering work that Yahoo has done and the great engineers there were part of the common effort."

Gates characterized Microsoft's offer for Yahoo as very fair, keeping in line with the official response from the Redmond company that expressed regrets for the negative answer with the following statement: "it is unfortunate that Yahoo! has not embraced our full and fair proposal." Microsoft is not as yet ready to back down, and is expected to approach Yahoo shareholders and even to sweeten the deal, with a future proxy battle to replace the members of the Yahoo Board of Directors, who are against the merger reportedly in the works. As far as the Sunnyvale Internet giant is concerned, nuclei of shareholders have already started forming, going against Microsoft's toughest opposition formed by CEO Jerry Yang and the board members loyal to him.

TAGS:

Microsoft | Yahoo | Google | Bill Gates

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