Microsoft's Big Yahoo Offer May Be a Ruse

PC leader aims only to block a Yahoo-Amazon alliance, analyst says
By Matt Cantor,  Newser User
Posted Feb 7, 2008 7:26 PM CST
George Willis, left, of Lehman Brothers Market Makers talks to Benedict Willis of R&H Securities, on the floor of the New York Stock Exchange, Friday, Feb. 1, 2008. Stocks gave up an early rally after...   (Associated Press)
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(Newser) – One possible reason for Microsoft’s massive bid for Yahoo: It’s a ploy to block a Yahoo-Amazon team-up, one analyst says. The $44.6 billion offer will never make it past regulators, Trip Chowdhry explains to MarketWatch. But Microsoft insists otherwise: Chowdhry’s report “is completely incorrect,” said a spokeswoman. The move, she says, offers Yahoo employees and shareholders big opportunities.

“We continue to believe that the proposed combination would receive all necessary regulatory approvals” and would be settled in late 2008, the spokeswoman continued. Most analysts agree that regulators would accept the deal. But Chowdhry calls it “strategic deception” that puts Yahoo “in limbo.” If Yahoo accepts, feds “will reject it. If they reject it, shareholders will say, 'What are you doing?’”