Posted by unregistered user at 2/2/08 12:22 a.m.

Mr. Bishop:

With all respect to the analysts you quote, they're smoking crack if they think a better offer is coming for Yahoo! MSFT has smartly adopted the Murdoch strategy of acquisition: making an initial offer so far above the prevailing share price that a competitive bid is unlikely. Murdoch did it successfully to acquire Dow Jones,a nd Microsoft may very well have done the same thing here.

Likewise, the analyst who suggested that AOL might bid to acquire Yahoo! is simlarly incorrect. Time Warner has been looking to jettison AOL for years in an attempt to get back to its core competency -- being a media company. The Time Warner board, faced with the prospect of having to top a $45 billion bid to acquire a failing company, would reject it for what it would be: a wanton fiscal affront to shareholders. It wouldn't make any sense at all.

Posted by unregistered user at 2/3/08 9:52 p.m.

I agree with the first poster. Honestly, you have to wonder whether any other company would be willing to pay such a premium for a company that is no longer a so called growth company. Yes, Yahoo has some appealing properties but again, Yahoo shareholders are more apt to accept the offer now than wait later when a new offer will probably be much less.

Besides, the company heads could have staved off such a bid if they simply sold the unprofitable divisions and spun off some of their key real estate (patents, sites,and so forth to placate shareholders but now it is too late.

Furthermore, what other companies have the cash and stock to make such a bid. Yes, interest rates are down but that doesn't mean the credit crunch is over. LBO firms are having difficulties completing deals and obtaining financing.

The bigger question should be asked by Microsoft shareholders. Is this acquisition going to provide enough of a return to justify such a high bid when Microsoft could have just waited another year or simply choose to cherry pick the best that Yahoo has to offer without the risk of carrying more employees or incurring Yahoo's debt? Why buy the company instead of the underlying technology?

Furthermore, Microsoft shareholders will want to hear more about the long term strategy concerning a Yahoo acquisition besides the usual platitudes about product synergies and creating market scale. Is this going to generate revenue and if so, when will this affect the bottom line in a positive manner? Looking at Yahoo's current quarter, their profit margin was significantly less than Microsoft so Microsoft better be able to execute on integrating all of the disparate parts or this is going to depress stock prices and Microsoft won't have the luxury of throwing cash towards stock purchases to shore it's price.