MS may need first-ever loan to buy Yahoo
updated 08:20 am EST, Tue February 5, 2008
MS Needs Loan for Yahoo
Microsoft may need to abandon its longstanding financial independence to complete a takeover of Yahoo, the company said late yesterday. Despite its large cash reserves, the company's Chief Finance Officer Chris Liddell acknowledged that the $44.6 billion proposed deal might require that the firm borrow money and accumulate debt. While the $21 billion in reserves owned by the Windows developer would cover nearly all the cash portion of the proposed deal, a loan would help Microsoft avoid wiping out these reserves and leaving itself without options if it needs more cash in the near future, according to the executive.
The willingness to rely on loans indicates Microsoft's commitment to its proposed bid, which is widely understood to be an attempt to thwart Google's control of search and web advertising. The company has officially claimed to be creating a viable alternative in the market.
However, reports have surfaced that Yahoo considers Microsoft a threat and that the company is considering an alliance with Google or other alternative firms as an attempt to make a Microsoft deal impractical or impossible. Google has commented on the deal and warned that Microsoft might translate its monopolies with Office and Windows to the Internet by creating proprietary web standards.
so it begins
02/05, 09:56am reply
this reminds me of AOL/Time Warner. it's going to be a giant disaster for M$. Their debt will spiral and finally they will die the death they so greatly deserve for making all of us suffer with crappy software.
zaghahzag
Dedicated MacNNer
Joined: Aug 2006
The beginning of the end
02/05, 09:59am reply
This is the beginning of the end for Microsoft. They are so obsessed with going after Google that they are risking their entire business on it.
I'm all in favour ;)
Gee4orce
Mac Elite
Joined: Dec 2000
Crazy
02/05, 10:44am reply
It's like a really bad episode of Jackass.
Deal
Mac Enthusiast
Joined: Apr 2001
further news
02/05, 10:46am reply
The rumour is that Ballmer has asked Jobs to help fund the buyout by selling a minority stake in M$.
garmonbosia
Fresh-Faced Recruit
Joined: Aug 2002
Re: further news
02/05, 11:05am reply
How would Jobs selling a minortity stake in MS help fund this?
testudo
Fresh-Faced Recruit
Joined: Aug 2001
A suggestion
02/05, 12:27pm reply
Ballmer - instead of trying to buy Yahoo - why not use the money to hire decent programmers? Ones that know what they are doing, can adequately test software, and understand the end-user.
Doofuses.
robttwo
Fresh-Faced Recruit
Joined: Nov 2005
twenty-one billion
02/05, 01:05pm reply
I thought M$ cash reserves were larger particularly when you consider that Apple is holding reserves of something like sixteen billion. Of course, M$ market cap is around $283 billion against Apple's $115 billion, so it appears that all round Apple are in a far more solid financial position. This Yahoo thing could really be the making or breaking of Microsoft and is Ballmer really the person to have in charge in a less than bullish climate? XBox replacements could easily knock another billion off those reserves (on top of the supposed one-off charge they've already taken). Gotta love Google and Nintendo!
Feathers
Forum Regular
Joined: Oct 1999
re: Google's comment
02/05, 01:17pm reply
"Google has commented on the deal and warned that Microsoft might translate its monopolies with Office and Windows to the Internet by creating proprietary web standards."
Duh!! How many times have I gone to a website and told that if I want to see anything on that site, I HAD to use Explorer!! Microsoft proprietary web standards, they're already here!
jdonahoe
Fresh-Faced Recruit
Joined: Jul 2006
re: further news
02/05, 01:36pm reply
I think he was referring to MS buying a minority stake in Apple when Steve Jobs returned.
You might want to turn up the gain on your Sarcast-o-meter.
ender
Fresh-Faced Recruit
Joined: Mar 1999
Wasting SHOWS UP
02/05, 03:04pm reply
This is what happens when you purposefully loose money on products like the XBox 360 just to keep the vapor position of "dominant player," even though they still rank third in sales, no matter how you put it.
danviento
Fresh-Faced Recruit
Joined: Dec 2005