News emerged late yesterday that the Microsoft (NASDAQ: MSFT) proposal to Yahoo! (NASDAQ: YHOO) would be to buy its search business and have the portal keep its content operations and sell its foreign investments.
According to The Wall Street Journal, "Microsoft didn't indicate how much it would pay under the plan, which was initially presented by Microsoft representatives to Yahoo." One school of thought is that the money could be used for a share buyback to raise Yahoo!'s stock price.
It would require some perverse logic to see how the deal would benefit Yahoo! beyond an initial infusion of cash. Search is at the core of Yahoo!'s long-term plans to revive its business, even though it runs a distant second to Google (NASDAQ: GOOG) in the category. If Yahoo! is left with nothing more than a content business, Wall Street would have to wonder whether the company could generate any meaningful operating income at all.
Microsoft is playing a game by making an odd and, in many ways, unattractive offer. The only question is why?
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
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Reader Comments (Page 1 of 1)
5-20-2008 @ 2:05PM
gisuser said...
Easy,
Bill Gates is still running MS. Bill Gates does not like to be told NO! So, it would not be at all odd to hear that MS is in retribution mode! This has got to be bad for Yahoo, anywho!