Microsoft’s $31-per-share offer – $44.6 billion – represented a 62 percent premium to Yahoo’s closing price late Thursday, although it’s below Yahoo’s 52-week high of $34.08 reached less than four months ago. On Friday, the total value of the cash-and-stock deal fell to $41.7 billion, or $28.95 per share, because Microsoft’s shares declined on the news.
Yahoo shares soared to a split-adjusted high of $118.75 in 2000 before the dot-com bust. That peak coincidentally also was just before Yahoo gave Google its first big break by hiring it to run its search engine.
Search engines are crucial tools because they have become a central hub in hugely profitable ad networks.
Advertisers around the world are expected to double their spending on the Internet during the next three years as more people get their news and entertainment on the Web instead of television, radio, newspapers and magazines. The trend is expected to create an $80 billion online ad market in 2010, up from an estimated $40 billion last year.
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