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february 2008 search engine news
What's New in Search - February 2008
Showdown at the Search Engine Corral
Unless you've been living in your bunker for the past month or work at the Googleplex (where they probably aren't allowed to say the M-word), you've probably heard that Microsoft wants to buy Yahoo!. We'll run through a quick synopsis of what's taken place so far and give you the latest on this potential acquisition.
It all started on February 1 with Microsoft making an unsolicited bid for Yahoo! at $31/share or $44.6 billion at the time (since share prices have fluctuated since then, the total value of the bid is now closer to $41 billion).
While Yahoo! pondered the offer, Google cried foul, publicly stating that it believed anti-trust regulators should take a very close look if Microsoft did buy Yahoo!. At the same time, Google CEO Eric Schmidt called Yahoo! CEO Jerry Yang with an undisclosed partnership offer that would help keep Yahoo! independent from Microsoft.
On February 11, Yahoo! formally rejected Microsoft's offer saying it undervalued the company. Apparently, Yahoo! is not a cheap date. A few days later, rumors began to surface that Yahoo! was courting Rupert Murdoch's News Corp. in a bid to evade acquisition (what a tramp!).
Following the rejection, Microsoft stated that it wouldn't raise its bid for Yahoo!—doing so would be very costly (approximately $1.4 billion for each additional dollar/share that the bid increased). Instead, it appears that Microsoft is opting for the cheaper proxy fight, which would cost around $20 to $30 million (still a lot of sweater vests, but we think Bill Gates will manage).
The next stage of the proxy fight will come to a head on March 13, when the nomination process for Yahoo!'s board ends. Microsoft is hoping to install some friends on the board and gain control of the company at the board elections, which would be held at the company's annual meeting (this year's hasn't been scheduled; however last year's was in June).
In the meantime, Microsoft continues to work on a secretive project for its Live search product code-named "Rome," which is scheduled for release in the spring, and a new update for its Web properties, called Windows Live Wave 3, which is due out in the fall.
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