Microsoft has tabled a cash and shares bid for Yahoo! that values the Internet company at $44.6 billion (22.5 billion). The offer price represents a 62% premium on Yahoos closing share price on Thursday. It appears from the letter with which Microsoft tabled the bid that the software company attempted to enter into negotiations to buy Yahoo! a year ago, but without success.
Earlier this week, Yahoo! announced that it was to lay off 1,000 workers, representing 7% of its total workforce. Non-executive Chairman Terry Semel resigned his post yesterday.
With both companies competing against Google on various fronts, Microsoft obviously feels a tie-up between the two would be good for both of them. Googles dominance on the search front is shown by figures from Nielsen NetRatings which show that in August 2007, Google accounted for 81.2% of all successful clickthroughs from search engines in the UK in August 2007. Yahoo (6.8%) and AOL (5.5%) accounted for most of the rest.
Yahoos board is currently evaluating the Microsoft offer.