Microsoft-Yahoo Battle Getting Expensive. Should Microsoft Give Up?
It is in Yahoo’s interest to keep fighting and adding poison pills to any takeover attempt. The longer this drags out, the more likely that Microsoft will raise its bid or lose heart. Could Microsoft already be rethinking its hostile-takeover strategy? It’s stock has taken a hit since it announced its bid and most of the press has been negative on the deal, pointing out the challenges of large mergers. The fact that this is a hostile attempt adds to the uncertainty. Hostile takeovers tend to work best when the targeted company has some hard assets that can be stripped and sold off or ripped apart and recombined in new ways.
That is not the case here. For this merger to work, Microsoft will need to retain the best employees (many of which are already fleeing Yahoo) and keep its customers happy. It can’t do that if it is preoccupied with merging two very different cultures and paying less attention to the Web properties that Yahoo’s business depends on. Of course, even if Microsoft loses its resolve, Yahoo would still need a strategy to compete.
- Yes, Hostile Takeovers Rarely Work in Tech
- No, The Deal Is Still Yahoo’s Best Option
Total Votes: 1842
Started: February 20, 2008