In response to Microsoft's $44.6 million offer of Yahoo!, the online community simply said No Thanks. Microsoft's vision is to create a competitor to Google's commanding position in the online advertising market and the best acquisition would have been Yahoo!. There's no wonder why Microsoft was so adament to purchase Yahoo! as the online advertising market was worth roughly $40billion last year alone. Microsoft is searching for for a strong presence on the web and Yahoo! would have provided the online community that they are searching for.
Yahoo! rejected the offer of $31 per share and they feel that their stock is worth upwards of $40 per share. Yahoo's online portal based web services are admired by Microsoft and a large portion of their revenue is credited to the web advertising industry. With Microsoft's acquisition, the combination of web advertising, a solid search engine, and the online community would have rivaled Google.
As a simple observer of the stock market, I disagree with Yahoo's decision to pass on Microsoft's offer. Are they holding out for a better offer or what? It's not like their stock is going to suddenly increase, as their stock has been on the decline since early 2006. Even if they didn't want to completly sell out, what about a partnership? This would allow Yahoo! to conserve money on their search engine service and focus more on their online advertising and web portal service. A partnership could balance the marketshare that Google has a pretty steady grasp over. I don't think either Microsoft or Yahoo! can rival Google by themselves, but collectively there would be a much better chance.
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