Abstract
When Microsoft made its public bid on February 1st 2008, it surprised many investors. Even if Microsoft's interest in Yahoo had been rumored for a while, Yahoo was actually facing hard times. With the value of Yahoo's stock declining over the last few months, restructuration and lay-offs were expected and Yahoo became suddenly less appealing. However, when the media announced the possible acquisition of Yahoo by Microsoft, it immediately raised questions about synergies, whether or not the deal would be accepted by the regulators and Google's reaction. Combining Microsoft and Yahoo's search engines would become Google's biggest challenge for years to come. Yahoo has also failed so far to convert its 130 million monthly visitors into paying customers. Microsoft could bring about an expertise for this purpose and help Yahoo to do so. Here are the main questions that will be discussed in this report:
• Why is Microsoft interested in Yahoo?
• On which terms will Microsoft acquire Yahoo?
• Will Google try to block this acquisition through regulatory conflicts or other means?
• Will the regulatory authorities allow this acquisition to occur?
• Is it likely that Yahoo shareholders will seek to obtain a higher price from Microsoft?
• Will negotiations restart in 2009?
