After a months-long standoff, Microsoft (MSFT) has abandoned its bid for Yahoo (YHOO), people involved in the discussions today. Microsoft confirmed to BoomTown that talks between the two companies, which have been taking place all week, collapsed Saturday when they could not agree on a price. The talks broke down this afternoon after a face-to-face meeting in the Seattle area that included Microsoft CEO Steve Ballmer, Kevin Johnson, president of Microsoft’s Platforms & Services Division and Yahoo Co-Founders Jerry Yang and David Filo.Microsoft offered $33 a share, and Yahoo countered with $37 a share. The talks went nowhere from there. Microsoft was also concerned with the lack of friendly integration and other major strategic problems, including the email monopoly that would arise from the merger of the two companies, as well as any outsourcing ad deal Yahoo might sign with Microsoft archrival Google before Microsoft completed an acquisition.
At several points during the last few weeks, Yahoo execs had asked for over $40-a-share to consummate the deal, a price which Microsoft rejected. Yahoo’s Yang subsequently called Ballmer with the lower $37 price, which was discussed today.
$33 had been a good deal for Yahoo as it was a good premium. The acquisition would had improved the morale of Yahoo's staff and also prop up their stock price even further. With the acquisition being called off, Yahoo would definitely have a tougher time ahead and its stock price should dive when its traded tomorrow.
1 comment:
not a shock the deal never went through, the corporate cultures were and are so far apart.
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