I don't understand what Microsoft (NASDAQ: MSFT) is doing. Last week at this time, investors were celebrating a very nice earnings report, and after years of watching the stock go nowhere, investors had some hope for the rest of '08. Now comes today's announcement that the software maker wants to buy struggling internet search firm Yahoo (NASDAQ: YHOO), for a 60% premium to where Yahoo stock was trading.
I know that Microsoft wants to go after Google (NASDAQ: GOOG). I also know that I have an egg on my face for a "buy Google into earnings" post that I wrote yesterday. But why pay 60% more than the market price for a company that admittedly has all kinds of problems and no one else wants?
Just when investors had thought they may just make some money with their Microsoft stock, this news comes along and now, I'm afraid it will be many more years until they see their stock move up.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no positions in any stock mentioned as of 2/1/08
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Reader Comments (Page 1 of 1)
2-01-2008 @ 11:55AM
Gumby said...
All Microsoft does is software, software, software, software, software, software, software, software, software, software< software< software< software< software except X box or X360 game consoles. Microsoft needs to buy AMD or Dell or things like that to put a little fiber in its balance sheets. Cisco is a fine addition as well. Or Sun Microsystems so it can learn a little from Solaris OS and Java stuff. IBM makes hardware, too. All other techs has hardware diviisons. MIcrosoft doesnt and it is not living in the reality.
2-01-2008 @ 11:55AM
Gumby said...
I thought MIcrosoft is innovative yet it couldnt do advertising business so it has to buy Yahoo?? Oh, phony Microsoft!
2-01-2008 @ 11:28AM
Thomas Jowers said...
well, just last october, yahoo shares were around $31 per share, soooo. they are actually just taking advantage of the huge sell offs we had in jan 2008 and the missed quarter from yahoo, very smart i think
also yahoo has over 1/4 BILLION registered users, thats alot of eyes for ads
combined, yahoo and msft will have MORE traffic than google!
next we will see something from aol and ask.com
when ask.com is seperated from the other parts of IACI, it will either be acquired by a large media corp, or try to buy aol, which it has already expressed interest.
seekerbug.com is next lol
2-01-2008 @ 12:01PM
Gumby said...
At Microsoft campus, employees seem to be blind to all the hardwares all over as they punch in code line after another code line. All hardwares seem invisible to them at the Microsoft campus. All they are thinking of is software, software, software, software, software, software, software, software, software, software, software, software, software, software. They have no feelings for hardware like how to feel more comfortable with hardware and all that so called interactions with hardwares. I have so many ideas. They seems to think that all solutions to computers lies in software, software, software, software, software, software, software, software, software, software, software. Apple is doing better with hardware as they are eye candy appealing to the public. Microsoft seems to think that Dell, HP and Lenovo can take care of the hardware part themselves ... That is flat wrong..... MSFT can acquire Dell or HP or others.
2-01-2008 @ 12:18PM
DMart said...
Yeah what were you thinking about calling ahead on Google's blow out earnings. Your an analyst. Weathermen are more accurate.
2-01-2008 @ 4:16PM
Bill Dollar said...
Microsoft continues to generate huge amounts of cash every 90 days so spending almost 45 billion dollars for Yahoo is no big deal to them. But once the merger has been completed how many people will get pink slips at Yahoo? My guess is several thousand! This will help Jerry Yang's bank account but will pretty much, but screw many thousands of loyal Yahoo employees who have daily keep the engine running!