Chart: A Microsoft-Yahoo combo by the numbers

shonguiz · 02-01-2008, 03:12 PM

Microsoft's bid for Yahoo would create one of the world's largest Web companies, when examined using several different metrics.

The target of the proposed acquisition, of course, is Google, which enjoys a healthy lead in the search market but trails the potential combination of Microsoft and Yahoo in several important categories. Here's a look at the tale of the tape.

Quote:

Microsoft-Yahoo deal by the numbers
What does $45 billion mean to Microsoft?

$59.09 billion Combined fiscal 2007 revenue of Microsoft and Yahoo. Most of that revenue, of course, comes from Microsoft's twin strongholds of its Windows operating system and its Office productivity software suite. MSN, Microsoft's online efforts perhaps most akin to Yahoo and Google, did $2.4 billion in revenue for Microsoft's fiscal 2007, compared to Yahoo's $7 billion in revenue. Google's 2007 fiscal revenue was $16.59 billion.

1.2 billion Combined unique monthly visitors to Microsoft and Yahoo's Web sites worldwide, according to December stats from ComScore. Google is the current leader in monthly unique visitors, while Microsoft and Yahoo are second and third, respectively. The combination of Microsoft and Yahoo's wide variety of sites would theoretically make it the first billion-user Web property, though lots of people who currently visit both sites would get lumped into the overall figure. Google's unique visitors in December totaled 588 million.

31.5 Combined U.S. search market share percentage for Microsoft and Yahoo. With 56.3 percent of the search market, according to December figures from Nielsen, Google would still have a very healthy lead in search queries, which comprise the launching pad for everything else that these Web properties are trying to accomplish.

83.1 million Combined U.S. e-mail market share for Microsoft and Yahoo as of September, according to Nielsen. They would have a huge advantage over Google here, as both companies have been providing free Web e-mail for years, before Google got into the game with Gmail (which has about 13.6 million users. Yahoo is currently far and away the e-mail leader, with 55.5 million unique users, and AOL is still very much in this game, with almost 30 million unique users.

47 million Combined unique U.S. instant-messaging service users for Microsoft and Yahoo, according to September figures from Nielsen. Again, no contest here. AOL is the market leader, with AIM and 39.8 million unique users, but a Microsoft-Yahoo blend would surpass AIM with room to spare. With just 2 million users, Google Talk is barely on the instant-messaging map, trailing the Big Three, as well as Meebo and Skype.

15.6 Combined percentage of U.S. Internet visits for Microsoft and Yahoo, as of January 26, according to Hitwise. Page views might be on the out as the end-all, be-all metric of Web properties, but they still count for something. And a combined Microsoft-Yahoo company would generate more than double the page views of Google's current operations, which grab 7.7 percent of U.S. Web page visits.

Centurion · 02-01-2008, 04:04 PM

MS is doing the right thing. Through out the 90s Yahoo has been MS's primary competitor on the WWW. Finally Yahoo is crumbling down on their knees which makes it a perfect opportunity to cheaply gobble up a long time enemy, while gaining market share continuing the war against the new contender on the web by the name google.

Mikael · 02-01-2008, 07:06 PM

I really hope Yahoo's bod & biggest shareholders won't approve this. I'd hate to see Yahoo being swept out from the competition. They are currently very vulnerable so some kind of merger could be useful. As eBay is also having financial problems maybe Yahoo and eBay could merge with Amazon.

That would be an interesting combination.

coolraoul · 02-01-2008, 07:07 PM

What i don't quite understand is why they offer 60% more than the value of the company at the stock-exchange, just when they announced not so good results...Surely to be sure that the action will be sucessful, but is it the right thing to buy to such a big price an ennemy that is struggling like Yahoo does?

Anyway, M$ surely know what they are doing. Making money is something they do like nobody else, that is for sure!

shonguiz · 02-01-2008, 07:33 PM

Quote:

Originally Posted by coolraoul

What i don't quite understand is why they offer 60% more than the value of the company at the stock-exchange, just when they announced not so good results...Surely to be sure that the action will be sucessful, but is it the right thing to buy to such a big price an ennemy that is struggling like Yahoo does?

Anyway, M$ surely know what they are doing. Making money is something they do like nobody else, that is for sure!

45 billions is expensive but still much better than the 75 billions they offered the first time.

Centurion · 02-02-2008, 07:55 AM

Quote:

Originally Posted by coolraoul

What i don't quite understand is why they offer 60% more than the value of the company at the stock-exchange, just when they announced not so good results...Surely to be sure that the action will be sucessful, but is it the right thing to buy to such a big price an ennemy that is struggling like Yahoo does?

Anyway, M$ surely know what they are doing. Making money is something they do like nobody else, that is for sure!

When a company want to buy competitor they alway offer more than the market value in order to make the share holders let go of their shares.

450SEL6.9 · 02-02-2008, 12:40 PM

Quote:

Originally Posted by Mikael

I really hope Yahoo's bod & biggest shareholders won't approve this.

I should have bought Yahoo! shares, but I wanted to see google's results before buying! Damn.

If the deal is not approved, I think Yahoo! goes back to $19-a-share.

Quote:

Originally Posted by Luwalira

When a company want to buy competitor they alway offer more than the market value in order to make the share holders let go of their shares.

Yeah, exactly. You always have to offer a takeout premium. Also, if they offered only a 30% premium to Yahoo's recent price, which was hit by their earnings report, Mr. Softy might look too opportunistic. I think 60% premium is designed to be a knockout bid.

Centurion · 02-02-2008, 01:40 PM

Quote:

Originally Posted by 450SEL6.9

I should have bought Yahoo! shares, but I wanted to see google's results before buying! Damn.

It's good that you didn't. If MS had zero interest for Yahoo, the stock would have been as low as it has been the latest years. Google and other internet based companies aren't doing to well either and have dropped like rocks during the latest 5 weeks, dot com crash all over again.

I'm not smiling though, because before new years I had plan jumping on the China-boom wagon and buy equity in companies like SoHu just to name one, but my plans have all be crushed by the economic crisis we are going through at the moment.

On the bright side, these minor depressions give people a chance of buying shares and property at bargin prices, which is what many successful investors do, and cash in big time on later on when the economy has stabilized.

450SEL6.9 · 02-03-2008, 11:54 PM

Quote:

Originally Posted by Luwalira

It's good that you didn't. If MS had zero interest for Yahoo, the stock would have been as low as it has been the latest years.

Yes, that's true, but then Sanford Bernstein - a firm that I thought did good equity research - thinks Yahoo is worth $39-45 per share. I just read the article at Reuters, but don't understand it.

The analyst at Bernstein thinks the Microsoft offer at $31 is "astute" because it forces Yahoo management to take steps to unlock its company's value.

Just how the hell is that "astute" for Microsoft? If Microsoft's bid is forcing Yahoo to try to raise its own value, Microsoft would have eventually to pay more to take Yahoo over, wouldn't it? That to me is the opposite of being astute. If this line of twisted thinking holds, I think the price will go higher.

I thought Microsoft overpaid for Facebook. If they start bidding themselves higher and get bamboozled into paying more for Yahoo!, whose stock was at a 52-week-low for a reason, I think a lot of their shareholders will start looking at their investment.

Centurion · 02-05-2008, 08:58 AM

Yeah, the Facebook investment might be questionable but considering the amount of companies attracted to it, MS might not have made an over valued investment after all. Unlike Youtube Facebook is actually generating revenue in the form of selling advertising space and market data collected on the site.

I'm fully behind their acquisition of yahoo, it's really now or never because MS is in an arms rave with google which is what all of these Yahoo and Facebook investments trace back to.

Then you also have to understand MS and their situation. They are sitting on more than 20 billion dollars and generate sick amount of revenue annually. Obviously they get a little bored and want to stimulate themselves in form of new challenges. And in order for them to feel anything they have to carry out these high risk investments.

02-01-2008, 04:04 PM	#2 (permalink)
Centurion Trendsetter Join Date: Sep 2005 Location: Sweden Posts: 7,069 Thanks: 587 Thanked 717 Times in 416 Posts	Re: Chart: A Microsoft-Yahoo combo by the numbers MS is doing the right thing. Through out the 90s Yahoo has been MS's primary competitor on the WWW. Finally Yahoo is crumbling down on their knees which makes it a perfect opportunity to cheaply gobble up a long time enemy, while gaining market share continuing the war against the new contender on the web by the name google.

02-01-2008, 07:06 PM	#3 (permalink)
Mikael Global Moderator Join Date: Nov 2005 Posts: 1,840 Thanks: 742 Thanked 312 Times in 200 Posts	Re: Chart: A Microsoft-Yahoo combo by the numbers I really hope Yahoo's bod & biggest shareholders won't approve this. I'd hate to see Yahoo being swept out from the competition. They are currently very vulnerable so some kind of merger could be useful. As eBay is also having financial problems maybe Yahoo and eBay could merge with Amazon. That would be an interesting combination.

02-01-2008, 07:07 PM	#4 (permalink)
coolraoul Member Join Date: Nov 2006 Location: France (Paris) Posts: 78 Thanks: 76 Thanked 52 Times in 30 Posts	Re: Chart: A Microsoft-Yahoo combo by the numbers What i don't quite understand is why they offer 60% more than the value of the company at the stock-exchange, just when they announced not so good results...Surely to be sure that the action will be sucessful, but is it the right thing to buy to such a big price an ennemy that is struggling like Yahoo does? Anyway, M$ surely know what they are doing. Making money is something they do like nobody else, that is for sure!

02-05-2008, 08:58 AM	#10 (permalink)
Centurion Trendsetter Join Date: Sep 2005 Location: Sweden Posts: 7,069 Thanks: 587 Thanked 717 Times in 416 Posts	Re: Chart: A Microsoft-Yahoo combo by the numbers Yeah, the Facebook investment might be questionable but considering the amount of companies attracted to it, MS might not have made an over valued investment after all. Unlike Youtube Facebook is actually generating revenue in the form of selling advertising space and market data collected on the site. I'm fully behind their acquisition of yahoo, it's really now or never because MS is in an arms rave with google which is what all of these Yahoo and Facebook investments trace back to. Then you also have to understand MS and their situation. They are sitting on more than 20 billion dollars and generate sick amount of revenue annually. Obviously they get a little bored and want to stimulate themselves in form of new challenges. And in order for them to feel anything they have to carry out these high risk investments.

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