Microsoft's Urge To Buy Market

Microsoft is making a huge offer to buy Yahoo! for $44.6 billion. Yahoo! has been a takeover target during the past despite being a segment leader for years because the company hasn't exactly excited investors and the share price has slid. The most recent share price drops have meant that the company could be purchased on the cheap. Microsoft is a company that has significant cash reserves, and this deal makes sense for Microsoft to expand its reach into the online environment.

The surprise offer of $31 per share, made late Thursday and announced Friday, comes with Sunnyvale-based Yahoo in a vulnerable position.

In a statement Friday, Yahoo said it will "carefully and promptly" study Microsoft's bid.

With its profits steadily sliding, Yahoo's stock slipped to a four-year low earlier this week and a new management team has been trying to steer a turnaround but sees more turbulence through 2008.

The announcement sent Yahoo's share price up 60 percent in premarket trading, while Google fell 8 percent, weighted down by a fourth-quarter earnings report that missed Wall Street expectations.

In a letter to Yahoo's board of directors, Microsoft Chief Executive Steve Ballmer indicated the world's largest software maker is determined to bring the two companies together.

To underscore its resolve, Microsoft is offering a 62 percent premium to Yahoo's closing stock price Thursday.

Since reaching a 52-week high of $34.08 in October, Yahoo shares have fallen 46 percent. Yahoo climbed $10.40 a share, or 54 percent, to $29.58 in premarket trading. Microsoft shares fell $1.40, or 4.3 percent, to $31.20.

I'm just a wee bit interested in how the company will address anti-trust concerns and merging online operations.