Microsoft, Yahoo in $20 Billion Search Deal?
By Anna Johnson on December 1st, 2008Two days ago the U.K. based Times Online reported a fairly definitive story that Microsoft was in discussions to buy Yahoo’s online search business for $20 billion. Just one problem. It’s so unlikely as to be untrue, according to tech industry pundits.
For one thing, the $20 billion – which is actually a two-year call option to buy Yahoo’s search business for $20 billion – seems a bit high… given Yahoo’s current market valuation of $16 billion (i.e. for it’s entire business, not just search).
For another, the figure is outlandish given that, when Yahoo was in better shape, Microsoft offered much LESS for its entire search business. Microsoft’s previous offer involved investing $8 billion in Yahoo in return for 16 percent of Yahoo’s shares and $1 billion in cash for Yahoo’s search business.
Sources: Erick Schonfeld, “Reports Of New Microsoft-Yahoo Search Deal Hard To Believe”, TechCrunch, November 29, 2008, Kara Swisher, “Total Fiction: There Is No $20 Billion Microsoft Deal to Buy Yahoo Search (Not Yet, at Least!)”, All Things Digital, November 29, 2008, John Waples, “Microsoft in $20bn Yahoo deal”, Times Online, November 30, 2008
