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No more Microsoft / Yahoo Takeover Reality

Theory squashed by Bernstein Analytics analyst

By Vlad Constandes, SEO News Editor

15th of January 2008, 18:21 GMT

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The rumor that Microsoft might be taking over Yahoo has been spun round the rumor mill for far too long now and far too many times it has failed to produce an official statement or a pertinent opinion from somebody in the game. This finally happened as Bernstein Research analyst Jeffrey Lindsay shed some light on the matter.

The last time speculations were made was last

Thursday when The New York Post had an article on the matter. Abiding the laws of physics for some reason, namely for every action there has to be a reaction, that lead to the rising of Yahoo! stock to 24.09 dollars per share. Of course, the second day, on Friday, when the rumors weren't backed by facts they dropped to $23.31, 3.24 percent lower than the previous day. Volume of stock traded was pretty good on Thursday as well with 52.2 million shares changing hands, compared to the usual average of about 31.4 million.

Some additional hints that Microsoft might me moving in for the kill were given by an executive of the Redmond based company when he said late in December 2007 that his company would like to up its search engine from around 7 percent to about 30 percent in 2008. People following this were instantly struck by the obvious match in numbers as Yahoo held about 22 percent of the market quota at the time of the statement. Some minor clue was also presented to the German online advertising market wannabe attendees who opted for Microsoft's program but were politely redirected to Yahoo!.

Jeffrey Lindsay made it clear for everybody that the takeover is an "unlikely event": "the acquisition would be value-destructive and a particularly bad idea for both players." According to Ant & Sons on SeekingAlpha.com, he then "cited the total value of the company's non-operating assets at $13.24 a share (which includes Yahoo stakes in Yahoo Japan and Alibaba) with the value of core Yahoo at just $10.85. Lindsay further brings investors back to reality and away from the takeover hysteria with a bleak outlook in which U.S. search market share erosion and slower growth in its email services is cause for concern."

The truth is that from the point of view of the user it would have been a good move, bringing together two teams that are, at the moment, competing against each other and by that drastically increasing the quality of the services because of the complex area of expertise from each company's employees.

TAGS:

yahoo news | microsoft | yahoo | takeover | bernstein

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