Microsoft Bid Yahoo to Establish Foothold in the Mobile Ad Market

In order to attain a bigger share in the mobile market, Microsoft is reportedly bidding US$44.6 billion for Yahoo. Though Microsoft itself is a big company it is difficult for it to reach out to the advertising genre, whereas with a 500 million global monthly user estimate, it is easier for Yahoo to approach the mobile advertising market.

Though Microsoft executives directly refuse to discuss the mobile advertising opportunities and the Yahoo deal, news also floats that they have also began discussions and possibilities with different carriers including Sprint Nextel.

Mobile advertising is not a rage currently amidst advertisers, in a few years time it shall be an exciting market for all of them who wish to reach out and expand their target audience manifold. With several location based technologies and the latest GPS that is being introduced in the mobile technology, it is going to become so much easier to target customers and to learn about their proximity to buy goods.

Microsoft Plans to Borrow Money to Fund the Yahoo Deal

Having made the public announcement on Friday about its intentions to take over Yahoo for a formidable $44.6 billion, Microsoft now intends to fund a portion of the amount by borrowing money. This is the first time in the history of Microsoft that it would be borrowing money to fund its acquisition.

Chris Liddell, Chief Financial Officer at Microsoft, says that the software company may take on some debt to finance the cash portion of its 50-50 stock and cash offer for Yahoo. In an annual strategy meeting with analysts, he told, "It's likely we're actually going to borrow for the first time."

Although it wants the board at Yahoo to make the deal faster, the latter wants to take more time to go through the proposition Microsoft has made. Yahoo says it wants to measure all the strategic options which also includes the option of remaining independent.

Google and Microsoft Tug of War

On 3rd February, Google came down heavily upon Microsoft's unsolicited buying of Yahoo for a whopping $44.6 billion. According to Google, this takeover can lead to the monopoly of the software group in the internet. This is not the first altercation between the two companies, rather it is yet another blow in the already growing animosity between both the organizations, the last dispute being Microsoft's accusing Google for proposing acquisition of online advertising company DoubleClick.

While Microsoft feels that acquisition of DoubleClick would provide Google with dizzying power to control the online advertising, Google on the other hand feels that with the takeover of Yahoo, Microsoft would gain the power to control the evolution of the web itself. The organisation says that the Microsoft-Yahoo deal would give the former a position where it could undervalue the principles of “openness” which forms the basis of web.

A possibility of an alliance between Google and Yahoo is also not rejected at this moment and is given consideration, unlike last year.

Mixed Reaction on Microsoft's Yahoo Take Over

Microsoft's $44.6 billion leap to buy Yahoo has triggered mixed reactions from active internet users and those who follow the online industry closely. While on one hand a group of readers and enthusiasts have a strong feeling that Microsoft is attempting to clamp down the competition by monopolising the online industry, on the other hand a second group of people opine that Microsoft and Yahoo are perfect fit for each other and the end consumer would be benefited if this marriage happens.

Predictions are strong that this would also compel Google to wake up and take notice of the competition. This, in other words, would mean that Google would be forced to better its services and provide more user friendly Internet tools and expand the existing ones, in order to stay ahead of the competition, the position that it enjoys at present.