Microsoft vs. Yahoo! in the Battle for Your Desktop

19 Pages Posted: 17 Mar 2008 Last revised: 25 Oct 2012

Date Written: March 14, 2008

Abstract

In a letter to the company's board dated January 31, 2008 Microsoft CEO Steve Ballmer made a $31 pre-emptive bid for Yahoo! This paper reports four studies of the unfolding dynamics of this move. The focus is on a strategic group composed of Microsoft, Yahoo, Google and Adobe. Study 1 examines whether the potential benefits of the operational synergies touted by Mr. Ballmer might be realized. Study 2 answers the question: Did Microsoft 'Massively Undervalue' Yahoo? Study 3 outlines Yahoo's audacious option. The paper concludes with a long-term view of a Yahoo-Adobe combination.

Keywords: Mergers, Valuation, Competition, Enterprise, Marketing, Optimal Expenses

JEL Classification: L63, L84, M21, M30, M41, O32, O33

Suggested Citation

Cook, Victor J., Microsoft vs. Yahoo! in the Battle for Your Desktop (March 14, 2008). Available at SSRN: https://ssrn.com/abstract=1104223 or http://dx.doi.org/10.2139/ssrn.1104223
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