No Way Is Microsoft Going to Buy Yahoo For $50B

Eddy Elfenbein submits: The New York Post:

Stung by the loss of Internet advertising firm DoubleClick to Google (GOOG) last month, Microsoft (MSFT) has intensified its pursuit of a deal with Yahoo! (YHOO), asking the company to re-enter formal negotiations, The Post has learned.

While Microsoft and Yahoo! have held informal deal talks over the years, sources say the latest approach signals an urgency on Microsoft's part that has up until now been lacking.

The new approach follows an offer Microsoft made to acquire Yahoo! a few months ago, sources said. But Yahoo! spurned the advances of the Redmond, Wash.-based software giant. Wall Street sources put a roughly $50 billion price tag on Yahoo!.

Fifty billion??

No. No way. Never.

By my math, that's $36 a share, eight bucks above yesterday's close. It's eight times next year's sales and 52 times earnings.

If Google went for that much, it would be a $1,000 stock.

Comments

[Tom B:]

Would YHOO have enough assets that could leverage the deal?

2007 May 07 08:58 AM

[Quaker:]

as absurd as it sounds, I think MSFT is poised for the deal. They've managed to get their float down to 8.6bn shares which means they have 1.4 bn shares to piss away.

MSFT loves printing shares.

2007 May 07 09:05 AM

[Tom B:]

"MSFT loves printing shares."

Almost as much as Bernacke loves printing greenbacks.

2007 May 07 09:21 AM

[oceandude:]

Then you better vote for Ron Paul because he's the only one talking about this problem.

2007 May 07 12:15 PM