Rumor: MSN offered $80 Billion for Yahoo

By Scott

In an article published January 1, the LA Times discusses rumors that Microsoft offered $80 billion to purchase Yahoo.

All I have to say is… wow. To put this in perspective, Google’s market cap at the end of today was $130 billion… and Google has gained a lot on Yahoo in the past year. In 2004, Yahoo quashed Google both in terms of revenues, and in profits. But in 2005, Google rebounded, and will surpass Yahoo in both those areas.

The rumor continues that Yahoo turned the deal down, saying it was too low. Again… these are just rumors, but Microsoft has deffinately been in a deal-making move having missed a chance to structure a deal with AOL.

Earlier in the year I cautioned everyone against counting Microsoft out. Whether they pay $100 billion plus and buy Yahoo or not, Microsoft has $40 billion in the bank, a history of slow starts, and a portfolio of big wins.

An interesting footnote… Microsoft currently drives a lot of revenue to Yahoo by incorporating sponsored listings from Yahoo Search Services. Microsoft is launching its own ad program which will ultimately replace the program it has with Yahoo. I wouldn’t be surprised if between 10 and 20% of Yahoo’s annual revenues come from Microsoft. That’s an educated guess.

Thanks to Marketing Shift for the tip.

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