Microsoft wants to buy Yahoo!

Today Microsoft has made a proposal to buy Yahoo!. All the outstanding stocks sum up to a whooping amount of $4.4bn ($31/share). This is an amazing offer and if the deal goes through, Microsoft will get a good holding to take Google heads on. The news just popped up, I am sure before I hit the bed tonight (IST), the web will be abuzz with this. Couple of things I noted in the initial reports:

IndiaInfoline states:

Microsoft has developed a plan and process that will include the employees of both companies to focus on the integration of the combined business. Microsoft intends to offer significant retention packages to Yahoo! engineers, key leaders and employees across all disciplines.

Hmm…so the headcount reduction Yahoo announced some days back holds good or is it going to increase? Will Microsoft clean out Yahoo’s house…sac all the no ROI projects? Specifically, what is the impact going to be on Yahoo India where most of the work is of sustenance nature (Quote: one of my friends working there)??

Another thing to note is the amount Microsoft is offering - $31/share. Already the prices of Yahoo stocks have gone up by $9.82, after seeing the MS proposal. This brings the price to $29.1. Has Microsoft offered a low price / stock?? I am not sure (my knowledge of how money works is very limited). BTW, you can see the actual letter sent by Microsoft to Yahoo board of directors here.

Interesting things that may happen, if the deal goes through:

• Microsoft will become “Microsoft!“, trying to keep the “Yahoo!” tradition alive
• Finally, you will be able to send messages to Xbox Live from Yahoo!
• Yahoo mail and Hotmail will be merged. More potential users for Hotmail.

The potential beneficiaries will be the Yahoo shareholders - a massive payday for them today