Microsoft & Yahoo …. is it gonna happen?

Check here. Jerry Yang is suggesting that Microsoft buys Yahoo. Looking at their market quotes today, the are both at:

MSFT 21.63 -0.45 (-2.04%) 192.41B
YHOO 14.45 +0.53 (3.81%) 20.02B

Yahoo went up more than $0.50 after Yang announced that Yahoo is up for grabs again. Yahoo’s 52 weeks low was $11.25 and Microsoft 52 weeks low was $20.65. This is an opportunity to make some cash in a depressed market, however, knowing that the market is headed for worse times, I wonder if this deal would happen now. Microsoft initial offer to buy Yahoo earlier this year was valued at $33/share. Yahoo is much cheaper now and MS still got the cash. MS could even do a share for share matching deal buying Yahoo at $21.63/share which would be a premium for Yahoo’s value right now and fitting to MS. I don’t think Yahoo can argue a price in the $30s anymore given the economy and their failed attempt to collaborate with Google. Reuters said the following:

Shares of Yahoo surged after a report surfaced online that the Web pioneer’s Chief Executive Jerry Yang was leaving the Company and that Yahoo was in late stage talks to sell the whole company to Microsoft for between $17 per share and $19 per share. Speculation about a possible deal between the two companies intensified after Google Inc scrapped plans for a Web search advertising partnership with Yahoo.

I would wait until we can find out more about MS’s real intentions. Off course you could take a risk and buy Yahoo now, let me know what you think.

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