With online advertising projected to grow to $80 billion by 2010, Microsoft can grab a larger slice of that pie if it can pull in Yahoo, which ranks as the world's heaviest trafficked web property.
In their proposal letter, Microsoft said, "Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock.
"We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years," the letter said.
In the letter, Ballmer noted how a February 2007 proposal to acquire Yahoo had been rebuffed by the board, as they believed in the "potential upside" of a management strategy that included the debut of the reworked search advertising product, dubbed Project Panama.
"A year has gone by, and the competitive situation has not improved," said Ballmer.
He has a solution for that situation. $44.6 billion solutions, approximately.
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