Business · StrategyFebruary–May 2008
Yahoo’s Microsoft decision
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Microsoft has proposed buying Yahoo for cash and stock. Yahoo’s board must decide whether the premium fairly captures the company’s prospects or undervalues its future.
- The initial proposal is $31 per share, an equity value Microsoft estimates at about $44.6 billion.
- Microsoft says the price is a 62% premium to Yahoo’s previous closing price.
- Search and display advertising are changing quickly, and combining two large companies carries execution and regulatory risk.
What happened next
The counteroffer never became a merger.
Microsoft says it raised the bid by roughly $5 billion; Yahoo sought at least $37 per share, and Microsoft withdrew. Later sales of Yahoo operating assets involved a different business perimeter and are not an apples-to-apples value comparison.
$31Initial offer per share
62%Stated premium
No dealFinal outcome
The offer terms and withdrawal are documented. This page does not subtract a later asset sale from the 2008 proposal or claim a precise counterfactual loss.
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