Yahoo! Reviews Microsoft Acquisition Proposal
Sunnyvale, California - (The Hosting News) - February 1, 2008 - Global Internet company, Yahoo!’s Board of Directors, has received an unsolicited proposal from Microsoft to acquire the Company. The Company has reported that it will evaluate the proposal in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for its shareholders.
Steve Ballmer, Chief Executive Officer of Microsoft noted, ”We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market. We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners.”
Microsoft’s offer consists of acquiring all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock. The offer represents a 62 percent premium above the closing price of Yahoo! common stock on Jan. 31, 2008.
Ray Ozzie, Chief Software Architect at Microsoft remarked, ”Our lives, our businesses, and even our society have been progressively transformed by the web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure. The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our own.”
The online advertising market is growing at a very fast pace, from over $40 billion in 2007 to nearly $80 billion by 2010. The resulting benefits of scale along with the associated capital costs for advertising platform providers make this a time of industry consolidation and convergence. Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners.
Kevin Johnson, President of the Platforms and Services Division of Microsoft commented, ”The combined assets and strong services focus of these two companies will enable us to achieve scale economics while reaching R and D critical mass to deliver innovation breakthroughs. The industry will be well served by having more than one strong player, offering more value and real choice to advertisers, publishers and consumers.”
The combination will create a more efficient company with synergies in four areas: scale economics driven by audience critical mass and increased value for advertisers; combined engineering talent to accelerate innovation; operational efficiencies through elimination of redundant cost; and the ability to innovate in emerging user experiences such as video and mobile. Microsoft believes these four areas will generate at least $1 billion in annual synergy for the combined entity.
Microsoft has developed a plan and process that will include the employees of both companies to focus on the integration of the combined business. Microsoft intends to offer significant retention packages to Yahoo! engineers, key leaders and employees across all disciplines. Microsoft believes this proposed combination would receive all necessary regulatory approvals and expects that the proposed transaction would be completed in the second half of calendar year 2008. Microsoft is also committed to working closely with Yahoo! management and its Board of Directors as they, along with Yahoo! shareholders, evaluate this compelling proposal.
Microsoft will host an analyst/investor conference call at 8:30 a.m. Eastern Time/5:30 a.m. Pacific Time to discuss the announcement. Participation is accessed by dialing (866) 610-1072 or (706) 634-9230 (toll/international); the conference ID number is 33470390. Please dial in at least 20 minutes in advance of the call. Playback of the conference call and the webcast will be available for replay through the close of business on Feb. 5, 2008. The replay can be accessed by dialing (800) 642-1687 or (706) 645-9291 (toll/international); the conference ID number is 33470390.
Founded in 1975, Microsoft (NASDAQ: MSFT) is a software, services and solutions firm.
Headquartered in Sunnyvale, California. Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide.
To learn more about the conference call webcast, please visit: www.microsoft.com/presspass.
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