MICROSOFT has made an unsolicited offer of $44.6 billion to purchase YAHOO, a 62% premium on the company’s market price at the close of business on Thursday. If successful, this would be the biggest technology takeover in history. Yahoo’s value has plummeted 18% during this year and the company has faced a losing battle against Google in the search and online advertising markets. Rumors and speculation about a possible takeover have swirled of late. As with all things Microsoft, regulators will probably look closely at the acquisition. In related news, Terry Semel will step down as Yahoo’s chairman – ending his affiliation with the company.
MOTOROLA announced that it may sell or spin-off its handset division, which accounts for half of its $36 billion in revenue. The company’s mobile market share has fallen to the lowest levels since 2001 and the company is under pressure from activist investor Carl Icahn to breakup the company. Icahn believes that the cellphone business is worth $20 billion — even though the whole company is currently valued at only $26 billion. The sale is under consideration but no official timeline has been given.
TIVO won a major patent infringement case against ECHOSTAR and was awarded $94 million in damages. An appeals court upheld an earlier ruling of infringement on TiVo software patents while overturning a ruling of hardware infringement. TiVo also announced that CBS will subscribe to its StopWatch second-by-second TV ratings. The combined news jolted TiVo stock up over 30% during the day.
GOOGLE reported 17% growth in profit and 51% growth in revenue during the fourth quarter. Those numbers represent a slight slowdown in its growth rate. The company blamed the slowdown on social networks, which are proving harder to monetize than initially expected. Sergey Brin said recent efforts to improve advertising on the networks had failed. Paid clicks increased 30%, also a slower growth rate than Google has seen in the past. Investors grew skittish on the report and drove the stock down 9%.
FACEBOOK had its finances leaked after Mark Zuckerburg hosted a company meeting with an open dial-in number. During the call Zuckerburg revealed that 2007 revenue was $150 million and is expected to grow to $300 million in 2008. The company will spend $200 million on capital expenses and anticipates 2008 EBITDA of $50 million. With the capital expenditures, Facebook will have negative cash flow during 2008. It will also double in size from its current 450 employees to almost 1000.
AMAZON has purchased AUDIBLE for around $280 million. Audible is a major player in the downloadable audiobook market and supplies audiobook content to the iTunes store. The purchase will increase content available for Amazon’s new Kindle reader.
NETSCAPE will be officially retired today by AOL. All updates and support will stop, as the once industry-leading browser is laid to rest. Farewell old friend.