7:01 PM Feb-1-2008
Microsoft Corp. Friday said offered to buy Yahoo Inc. for $44.6 billion, or $31 a share, in a mix of cash and stock.
The offer represents a 62% premium on the $19.18 closing price of Yahoo on Thursday.
The software giant said the deal would create a more efficient company with total annual synergies of $1 billion, driven by audience critical mass, increased value for advertisers and operational efficiencies.
Microsoft said it has already developed a plan to involve both companies' employees in the integration, and said it would offer significant retention packages to Yahoo engineers and key leaders.
Microsoft said it expects a deal to get regulatory approval and to be completed in the second half of 2008.
Microsoft noted that it is targeting the fast growing online advertising business, which the company estimates will double to $80 billion by 2010 from $40 billion in 2007.
By teaming up with Yahoo, Microsoft gains critical edge in a fast-growing market and positions itself to help lead the possible consolidation of a sector that is beginning to impact all forms of commerce.
"Our lives, our businesses, and even our society have been progressively transformed by the web, and Yahoo has played a pioneering role by building compelling, high-scale services and infrastructure,' said Ray Ozzie, chief software architect at Microsoft.
"The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our own," Ozzie added.
In his letter to Yahoo, Microsoft's Ballmer confirmed that the company had previously made overture to the Internet giant, which spurned the offer on the basis that the timing wasn't right then.
Ballmer also indicated that Microsoft's purchase offer would help Yahoo counter the aggressive moves that have propelled Google to the top of the field.
"While online advertising growth continues, there are significant benefits of scale in advertising platform economies, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence," Microsoft said.
"Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition," Microsoft said. "Together, Microsoft and Yahoo can offer a credible alternative for consumers, advertisers and publishers."
US STOCKS-Futures gain as Microsoft aims to buy Yahoo | Microsoft offers to buy Yahoo for $44.6 bln | Microsoft targets Yahoo! with $44.6bn bid
Microsoft offers to buy Yahoo for $44.6 billion
U.S. spy satellite may crash into Earth
A large U.S. spy satellite has lost power and propulsion and could hit the Earth in late February or March, government officials said Saturday.
The satellite, which no longer can be controlled, could contain hazardous materials, and it is unknown where on the planet it might come down, they said. The officials spoke on condition of anonymity because the information is classified as secret.
The spacecraft contains hydrazine - which is rocket fuel - according to a government official who was not authorized to speak publicly but spoke on condition of anonymity. Hydrazine, a colorless liquid with an ammonia-like odor, is a toxic chemical and can cause harm to anyone who contacts it.
John Pike, a defense and intelligence expert said it's not likely the threat from the satellite could be eliminated by shooting it down with a missile, because that would create debris that would then re-enter the atmosphere and burn up or hit the ground.
Pike, director of the defense research group GlobalSecurity.org, estimated that the spacecraft weighs about 20,000 pounds and is the size of a small bus. He said the satellite would create 10 times less debris than the Columbia space shuttle crash in 2003. Satellites have natural decay periods, and it's possible this one died as long as a year ago and is just now getting ready to re-enter the atmosphere, he said.
The largest uncontrolled re-entry by a NASA spacecraft was Skylab, the 78-ton abandoned space station that fell from orbit in 1979. Its debris dropped harmlessly into the Indian Ocean and across a remote section of western Australia.
In 2000, NASA engineers successfully directed a safe de-orbit of the 17-ton Compton Gamma Ray Observatory, using rockets aboard the satellite to bring it down in a remote part of the Pacific Ocean.
In 2002, officials believe debris from a 7,000-pound science satellite smacked into the Earth's atmosphere and rained down over the Persian Gulf, a few thousand miles from where they first predicted it would plummet.
Defunct spy satellite may crash into Earth | Orbiting U.S. spy satellite could crash to Earth | Disabled Spy Satellite Threatens Earth | Broken Spy Satellite May Crash to Earth
