Wire reports say that Microsoft has offered Yahoo! $31 per share or $44.6 billion. This represents a premium of 62% over last night's closing price. Interestingly, this was the subject of a closed discussion among the Irregulars two days ago. At the time, opinion was divided as to what might happen, despite the persistent rumors.
Assuming Microsoft is successful, and quite frankly we don't see another suitors likely to come knocking on Yahoo!'s door anytime soon, the marriage will take some consummating. On the one hand, Yahoo! is a media company while Microsoft has aspirations to become a media company. On the other hand, Yahoo! isn't going anywhere and will take some careful management. It's a long time since Microsoft made a strategic acquisition of this kind and it will need to muster serious management skills to make the marriage work. Here are some reasons why it might makes good sense:
This is not a done deal. We have speculated that one of the enterprise giants might think ride in as a white knight. After all, Oracle or IBM could use a vendor aligned to cloud computing and would arguably would make better use of Yahoo!'s assets, applying strong fiscal management.Regardless of the outcome, the move has caught us by surprise. Let the games begin.