My 11th Search Marketing Prediction for 2008 has developed in an interesting way. A couple of weeks ago rumors swirled that Yahoo and Microsoft were yet again in talks, but nothing happened. As a result, I was glowing with pride at my soothsaying prowess.

Late yesterday, Microsoft changed the game with a public offer of $44.6 billion for Yahoo. That’s a premium of 62% over Yahoo’s closing price on Thursday. Microsoft CEO Steve Balmer indicated that he intends to make this happen. I assume that he means it will be a hostile takeover, if necessary.

Given the uncertainty and fear in the economy, Yahoo’s shareholders may be loathe to reject the premium offer. Microsoft’s financial forecast has been unusually bright for the tech sector, and Yahoo’s shareholders would have a choice of taking cash or MSFT common stock.

This deal might very well happen. But given the non-friendly (or even hostile) nature of the merger, plus the expected regulatory review, the deal might not consumate this year, making my prediction for 2008 technically correct.

This entry was posted on Friday, February 1st, 2008 at 8:04 am by admin and is filed under MSN, Yahoo. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.