The Yahoo-Microsoft takeover drama has just become more interesting with media mogul Rupert Murdoch reportedly entering the fray to fend off the $31 per share Microsoft bid. Reports further suggest that the News Corporation Chairman is in talks about the possibility of merging his MySpace social networking site with Yahoo!
Yahoo! had earlier this week rejected Microsoft’s initial $44.6 billion takeover bid offer. The portal has sent a letter to its stockholders outlining the reasons the Board believes that Microsoft’s proposal significantly undervalues Yahoo! and is not in the best interests of Yahoo! stockholders.
Microsoft had wanted to buy Yahoo! to challenge Google’s online domination, and News Corp is said to be keen on a deal with Yahoo! for the same reason.
In the letter to its stockholders, Yahoo! reasoned, “Yahoo!’s assets – our brand and its audience, our relationships with marketers, our financial strength, our technology, and our strategic investments – are the core of our value and our leadership position in the industry. We have a huge market opportunity, and are uniquely positioned to capitalise on it. The global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010.”
“Today, Yahoo! is a faster-moving, better-organised, more nimble company than it was just a few months ago. We have redeployed our resources to drive Yahoo!’s key strategic priorities – taking important steps to streamline our organisation and close down or scale back businesses that don’t support these critical growth initiatives. We are well on our way to transforming the experiences of Yahoo!’s users, advertisers, publishers and developers, an important shift that is at the heart of our plan to create stockholder value,” the letter further stated.
A tie-up would represent the latest expansion of Murdoch’s media empire following his $5 billion acquisition of Wall Street Journal publisher Dow Jones in 2007 and social networking site MySpace for $580 million in 2005.
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