Microsoft makes unsolicited takeover bid to buy Yahoo for USD 44.6 billion

By Margarita Snegireva. Microsoft's interest in buying Yahoo had been rumored for so long that when the bid - $44.6 billion - was finally made last week, it managed to surprise just about everyone in the high-tech world.

Photo: Microsoft makes unsolicited takeover bid to buy Yahoo for USD 44.6 billion

With merger rumors fading and Yahoo slumping, it was generally assumed that cofounder and CEO Jerry Yang and his team were hunkering down to cut their losses with layoffs and then embark on a major re-organization.

Microsoft's offer has changed everything. Within minutes after the news broke, the mainstream media and the blogosphere were on fire with speculation on what it all meant. Here in Silicon Valley , and other high-tech enclaves around the world, the debate was a welcome respite from the increasingly depressing news that always accompanies the industry's quadrennial slide into recession.

Yahoo! Inc. is an American public corporation and global Internet services company. It provides a range of products and services including a Web portal, a search engine, the Yahoo! Directory, Yahoo! Mail, news, and posting. It was founded by Stanford University graduate students Jerry Yang and David Filo in January of 1994 and incorporated on March 2, 1995. The company is headquartered in Sunnyvale, California.

According to Web traffic analysis companies (including comScore, Alexa Internet and Netcraft), Yahoo has been one of the most visited websites on the Internet, with more than 130 million unique users per month. The global network of Yahoo! websites receives 3.4 billion page views per day on average as of October 2007, making it one of the most visited U.S. websites.

Microsoft and Yahoo pursued merger discussions in 2005, 2006, and 2007, that were all ultimately unsuccessful. At the time, analysts were skeptical about the wisdom of a business combination. On February 1, 2008, after its friendly takeover offer was rebuffed by Yahoo, Microsoft made an unsolicited takeover bid to buy Yahoo for US$44.6 billion dollars in cash and stock.