MS deal cuts chances of Yahoo merger
Microsoft's $6 bn deal to buy aQuantive Inc reduces the chances of the software giant buying with Yahoo.
By Agencies |
NEW YORK: Microsoft Corp's $6 billion deal to buy Web advertising agency aQuantive Inc reduces the likelihood that the software giant would seek a megadeal with Internet media company Yahoo Inc, an analyst said on Friday.
"It lowers the probability that Microsoft is buying Yahoo, at least in the near-term," Stifel Nicolaus analyst Scott Devitt said after Microsoft's agreement to pay a hefty 85 per cent premium for aQuantive in an all-cash deal.
"Microsoft may be more interested in piecemealing together the highest-quality franchises that replicate what Yahoo already has," Devitt said in a phone interview.
Earlier this month, several newspapers reported that Microsoft was considering a deal worth an estimated $40 billion to $50 billion to acquire Yahoo. A source close to the situation subsequently said that any talks had cooled.
Yahoo is the world's biggest Internet media company, attracting roughly 500 million Web users monthly to its network of properties. It derives the lion's share of its revenue from a mix of corporate brand display ads and Web search marketing.
ADVERTISEMENT
Devitt pointed to Microsoft's move last week to buy a 4 percent stake in online jobs site CareerBuilder.com, which competes with Yahoo's own job search site, HotJobs. CareerBuilder is owned largely by US newspaper groups.Assuming Microsoft is trying to create a "Yahoo on the cheap," the Stifel Nicolaus analyst speculated that Microsoft could be a buyer of smaller players in the mapping, online video, Web analytics and ad affiliate network categories.
Shares of Yahoo were up 71 cents, or 2.4 per cent, at $29.26 in early Nasdaq trading.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
