SEO News

Microsoft Won't Beg or Steal; Will Borrow to Buy Yahoo

by , Comments


Microsoft CFO Chris Liddell told Wall St. analysts the company would likely borrow to pay for the cash portion of its Yahoo bid. That's a first in the company's history. The half-cash, half-stock offer is $31 per share.

Microsoft has a huge war chest, approximately $21 billion at year end.

It's not as if Microsoft couldn't fund the cash portion without borrowing any money. The cash-rich company definitely won't have to beg for the loan.

So what's the exact amount Microsoft will borrow? It's anybody's guess.

The need for capital, though, won't subside if or when the bid is accepted. As Kevin Johnson, Microsoft President, Platform and Services, noted in the initial conference call, "There are a few key dynamics in the online advertising industry that I think are worth noting. First, this is a business that has scale economics in a few key areas; scale economics in search and ad serving and scale economics and the capital needed to support these areas, CapEx for data centers, servers and infrastructure."

Who ever said Web 2.0 has low barriers to entry? Not the search engine CEOs who claim competition is just one click away.

SES LondonOptimising Digital Marketing Campaigns with Search, Social and Analytics
At SES London (9-11 Feb) you'll get an overview of the latest tools, tips, and tactics in Paid, Owned, Earned, Integrated Media and Business Intelligence to streamline your marketing campaigns in 2015. Register by 31 October to take advantage of Early Bird Rates.

Recommend this story

comments powered by Disqus