Alibaba to acquire Yahoo?
On Friday, Alibaba.com expressed its intent to acquire Yahoo. This is not the first time a company has been openly declaring its intent to takeover Yahoo. Prior to Alibaba, Microsoft had tried and failed in acquiring this company.
It’s true that Yahoo has been in trouble recently. However, the company says that it has no intention to sell. Even if it does, only a financially strong company would consider buying it. Microsoft, in February 2008, had offered Yahoo about $44.6 billion, which was close to $31 per share. Later it raised the offer to $33 per share. However, Yahoo was adamant on $37 per share, which propelled Microsoft to withdraw.
The market share now is $16.63 billion.
Alibaba’s CEO Jack Ma hasn’t mentioned any figure, but the announcement of the offer isn’t much surprising. A few years ago, Yahoo had acquired about 40% stake in Alibaba. However, the situation has dramatically changed now. Alibaba has been asking Yahoo to sell back its investment in the company, which now accounts for about one-third of the total revenue of Yahoo.
Now apart from buying back its own shares, Alibaba has planned to go a step further and acquire Yahoo. While it’s still not certain whether Yahoo would give in to any of these bidders, its poor performance will eventually force to company to be acquired.
Stephen Cruze
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