MICROSOFT-YAHOO MERGER

Microsoft-Yahoo Merger

Microsoft-Yahoo Merger

Finally, after several months of speculation, Microsoft and Yahoo! decided to join forces and form a partnership in search and advertising on the Internet that the main objective to take the domination search engine market leader Google.

The merger enabled Yahoo! selling pay-per-click advertising as Microsoft and Yahoo! websites, which they hope to increase revenue as there will no longer be competitive with each other. However, Yahoo! will keep 88 percent of income. This merger will add to revenues Yahoo, which is about $ 275 million a year plus there will be a further substantial decline in investment in technology development, and this merger will take tremendous 10 years.

However, Yahoo! made two critical mistakes. Around June 2000 he replaced the Inktomi search engine with Google and Google, actually paid to put their results on Yahoo! website. User favorite search company Google, and decided to use Google directly, rather than Yahoo. Only last year, Yahoo! made another crucial mistake to abandon Microsoft's proposals 46,6 billion last year. It shows how two simple solutions can fully influence the route of the company and the market in general. This merger means more competition in the online advertising and search engine market. Microsoft forecasts that the long-term merger with Yahoo gives him understanding of the scope and it needs to attract more users, advertisers, and ultimately more revenue. Microsoft's $ 31 share offer of Yahoo was made possible by the fall of Yahoo's stock shares (Yahoo's was at about $ 31 a year ago). Microsoft common stock represents a very attractive investment opportunity for Yahoo with shareholders. Microsoft has caused revenue growth of 15%, earnings growth of 26%, while return on equity of 35% on average over the past three years. Microsoft's stock price caused the shareholder returns of 8% over ...