Tuesday, February 05, 2008

More Of Those Made Up Headlines ...

MacRumors aggregates two headlines:

Apple Interested In Yahoo

One report lists Apple amongst possible companies that are considering rival offers for Yahoo after Microsoft issued a public bid of $44.6 billion for the company last week. Part of the hesitation is reportedly Yahoo CEO, Jerry Yang, being reluctant to join Microsoft.
It is believed [Yang] would be particularly open to a rescue bid from Steve Jobs' Apple Corp, having openly expressed his admiration for the firm in the past. Yang last year invited Jobs to Yahoo's headquarters in Sunnyvale to give a motivational talk to staff.

While Apple does have $16 billion in the bank, representatives from other companies have already expressed reluctance to place a bid for Yahoo against Microsoft, who could easily top their bids. Meanwhile, it appears Google has been playing an active role in trying to hinder this move. Google CEO Eric Schmidt personally phoned Yahoo CEO Jerry Yang to offer assistance in fending off a Microsoft acquisition.


Microsoft Likely to Go Into Debt for Yahoo Deal

Microsoft has historically been renowned for its huge cash holdings, and its ability to avoid going into debt, but the company will probably need to borrow for the first time to help cover the cash portion of its giant Yahoo bid. The move underscores the magnitude of the Yahoo bid and the risk the company is apparently willing to take in its effort to make the deal happen. Microsoft is still generating cash at a considerable rate, reporting more than $5.8 billion in net cash from operations in its last quarter alone


---------- FIX YOUR THINKING COMMENTARY ----------


Microsoft is merely trying to kill two birds with one stone here. They will effectively eliminate Yahoo. At the very least they made Google execs and employees pretty sweaty when they saw their stock tumble 50 points on the news.

Apple would have NO interest whatsoever in Yahoo and would be FOOLISH to go into debt to purchase Yahoo! at such a ridiculous amount.

Obviously the second summary was completely made up as that's not how mergers work. There would be some sort of cash AND stock trade/split and employees from Yahoo! would be fired to make up a sizable return to Microsoft as well.

Tom over at The Small Wave has more thoughts on the situation: click here to read his opinion.

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