By the end of 2007, the possibility of a merger between Yahoo and Microsoft emerged. On 1st February, Microsoft had publicly offered 44.6 million dollars to Yahoo, which was rejected by the latter. On 6th March, Yahoo has extended the deadline, which was previously 14th March, and initiated discussions with Time Warner.
The company wants to explore some other options so that it can raise the share price. In this paper we will discuss about the present situation of this deal. On 5th March 2008, Yahoo Inc., the leading online information portal provider, has announced that it will take some more time to nominate candidates for building the new board of directories.
Therefore, the company gets another opportunity, and also some time, to stop Microsoft, the biggest software company in the world, from acquiring it. Yahoo has already started its discussion with the Time Warner Inc regarding the possible collaboration with AOL online, a unit of Yahoo.
However, the company set 14th March as a deadline earlier.On 1st February 2008, Microsoft publicly offered 44.6 billion dollars, equivalent to 31 dollars for each share.
Yahoo had rejected the offer instantaneously, for it expected more money from the software giant. By the way, it was very much on the cards, that Microsoft would force Yahoo to accept the deal.
The Yahoo officials have commented that this extension will enable the company to explore all the other options for increasing the share prices. However, Yahoo may own AOL jointly with the Time Warner but keep a small stake in the new company. Google Inc., the search engine giant, has already supported this plan as they have 5% stake in AOL LLC.
Google has shown its anxiety regarding this deal earlier. Experts say that, if Yahoo merge with AOL then, it would be able to establish a strong and efficient advertisement driven business and challenge Google’s monopoly. However, Yahoo’s previous venture for collaboration, in 2005, with Time Warner had not seen the day light because the latter wanted to keep majority of the stake in AOL.