Microsoft (MSFT) Considers A Public Offer For Yahoo!

September 25, 2007 by Douglas A. McIntyre

According to sources inside Microsoft (MSFT), the New York Post is reporting that if the world’s largest software company does not conclude a deal to buy part of Facebook, it may take the offer it gave Yahoo! (YHOO) earlier this year to the portal’s public shareholders. If MSFT does this, it believes that it could force the sales of the company because its stock, now at $25.73, is off almost 20% over the last six months.

The move would be clever. If Microsoft wants to own Yahoo!, it has very little to lose by revealing what it put on the table for Yahoo! management. The shares have only been above $30 for a brief period over the last year.

Microsoft is now lagging far behind both Google (GOOG) and Yahoo! in search market share. Combining Yahoo! with MSN would created what would be by far the largest internet portal.

Microsoft is out of time in terms of getting an internet strategy to work. If not Facebook, why not Yahoo!.

Douglas A. McIntyre