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Wednesday, May 14, 2008

Microsoft cancels Yahoo acquisition - Is the game really over

After so much marketing of Yahoo! acquisition by Microsoft, Steve Ballmar, the CEO of Microsoft said that they have withdrawn the deal over Yahoo!. Though Yahoo! said to be unsatisfied with Microsoft's offer of $31 per share, but Jerry Yang, CEO of Yahoo!, had always tried to get out of the deal. Now the cancellation of the deal has become a reality from Microsoft.



But according to Jonathan Miller, the former CEO of AOL, analyzes it a powerful negotiating tactics by Microsoft which is similar to what Oracle did to BEA systems. Oracle was offering BEA systems $17 per bid, whereas BEA were consistent on their bid of $21. Naturally, Oracle walked away from the acquisition. But the shareholders pressure obliged BEA systems to be back on the negotiation table, and both agreed to a deal of $19.38 per share price.


Now the question is, Is Microsoft trying to do the same thing? It is said that shareholders have filed seven lawsuits against the Yahoo! since February 21. So, I don't know how many lawsuits Yang can suite any more if the negotiation fails. I also not sure whether Ballmar is going to resign or he is going to be pushed down by Microsoft due to failure of this acquisition. I also doubt whether Microsoft was definitely going to acquire Yahoo!, or only had some buzz in Marketing world. Its something what only Steve Ballmar knows. If the acquisition was so important, then how he let it go?


As already known that Yahoo! was never happy to give up to the software giant, on an interview Yahoo! top executives were found pretty less excited to loose Microsoft's deal. That was something too obvious, but not on the face of Microsoft. But many of Yahoo! professional were thinking about a CEO to drive on them a new thrill.


Yahoo! may be talking on search engine advertising with Google and AOL. If any deal come into being, merger of these search giants will be a very heavy blow for Microsoft. I don't know whether they have to quit on search marketing.

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