Microsoft News Tracker

The perennial rumors finally came true and today Microsoft made an unsolicited $44.6 billion offer for Yahoo!

Microsoft Corp. (NASDAQ:MSFT) today announced that it has made a proposal to the Yahoo! Inc. (NASDAQ:YHOO) Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock. The offer represents a 62 percent premium above the closing price of Yahoo! common stock on Jan. 31, 2008.

Stock prices are down and Yahoo’s share price is down even more after an awful quarterly report and ongoing organizational turmoil so now is clearly a great time for Microsoft to try bargain hunting. However, as I have observed previously, while the idea of combining Microsoft and Yahoo’s market share in search, advertising, and content Web sites and services is attractive, the significant overlap of actual offerings between the two erstwhile partners is going to be a nightmare to resolve if the acquisition goes through. Unsurprisingly, Microsoft says not to worry:

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