Friday, April 4, 2008

Yahoo upgraded to buy with sweeter Microsoft bid seen Market Watch

Shares of Yahoo Inc. rose Tuesday morning after a Citigroup analyst upgraded the company s stock to a buy and predicted that Microsoft Corp. will raise its bid to a share. Analyst Mark Mahaney said that despite the uncertainty surrounding the proposed merger he thinks Microsoft MSFT MSFT News chart profile more Last Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by is determined to pursue the deal even at a higher price. We believe the likelihood of Microsoft of walking away from the deal is small he said in a research note. Yahoo s YHOO YHOO News chart profile more Last Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by board of directors formally rejected Microsoft s merger offer initially valued at . billion or a share. Mahaney noted that the stock and cash proposal s value to Yahoo shareholders has declined to about . a share following a drop in Microsoft s stock in the weeks sin! ce the plan was unveiled. Analysts have speculated that Microsoft will likely raise its bid although the software giant also has hinted that it might mount a proxy battle to gain control of Yahoo s board. Microsoft also appeared to be determined to stick to its guns suggesting it had no plan to raise its offer. Yahoo was also widely believed to be exploring other possible deals with other players such as Time Warner TWX TWX News chart profile more Last Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by Google Inc. GOOG GOOG News chart profile more Last Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by and News Corp. NWS NWS News chart profile more Last Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by . News Corp. has said it is not interested in a deal with Yahoo while analysts say a partnership with Google would run into serious regul! atory problems. Mahaney said a tie up involving Time Warner is possible although he sees it more as a forcing function to a higher Microsoft bid. We continue to view a Microsoft Yahoo deal as the most likely outcome he said. While regulatory risk may be material we continue to believe that limited combined market share allows the deal to go through. . We think the strategic value of Yahoo to Microsoft is very significant. He said Microsoft needs the deal to compete with Google effectively in the online advertising market where the Internet giant is expected to emerge as a stronger player with its recent acquisition of DoubleClick. Google s share of U.S. online advertising has significantly increased and the DoubleClick acquisition could materially ramp its display ad biz he said. Referring to Microsoft s bid for Yahoo he added No other step could potentially address the scale liquidity challenge of Microsoft s ad platform. Benjamin Pimentel is a MarketWatch reporter based in San Francisco. Companies in this story Microsoft Corporation MSFT Tim! e Warner Inc TWX Google Inc GOOG News Corp NWS Yahoo Inc YHOO Add to Portfolio Create Alert Related MarketWatch news Report Wells Fargo says its open to a Fed brokered deal FCC likely to approve Sirius XM deal analysts say Corporate China extends M A reach more gingerly Top stories minutes ago U.S. stocks struggle to extend gains into third session AM today March consumer confidence down outlook grim AM today Home prices plunge a record . in past year Most Popular READ E MAILED EDITOR S PICK Ten reasons your taxes are going up no matter what Home prices plunge a record . in past year How Jamie Dimon fumbled his biggest deal March consumer confidence down outlook grim Contrarian analysis continues to support notion that bottom is in U.S. stock futures struggle to extend two day rally Gold futures rally as dollar falls sharply U.S. stocks mixed as investors weigh data against profits Valero warns on profit over costs for raw materials refineries Follow the money Ten reasons y! our taxes are going up no matter what Home prices plunge a record . in past year How Jamie Dimon fumbled his biggest deal Follow the money Contrarian analysis continues to support notion that bottom is in VMware has lost its luster on Wall Street Report Wells Fargo says its open to a Fed brokered deal March consumer confidence down outlook grim Major U.S. benchmarks clear their day moving averages A day in Foreclosureville serves up lessons in housing bargains U.S. stocks struggle to extend gains into third session March consumer confidence down outlook grim Home prices plunge a record . in past year Monsanto ups profit view on corn herbicide strength Valero warns on profit over costs for raw materials refineries Get the Latest MarketWatch News PARTNER CENTER Site Index Topics Archive Help Feedback Media Archive Premium Products Mobile RSS Podcasts Company Info Advertising Media Kit DJ Client Solutions The Wall Street Journal Digital Network WSJ.com Barron s Online BigCharts Virtual Stock Exchange All Things Digital MarketWatch Community RealE! stateJournal.com Financial News Online WSJ.com Small Business Copyright MarketWatch Inc. All rights reserved. By using this site you agree to the Terms of Service and Privacy Policy . Yahoo upgraded to buy with sweeter Microsoft bid seen MarketWatch Intraday data provided by Interactive Data Real Time Services a division of Interactive Data Corp. and subject to terms of use . Historical and current end of day data provided by Interactive Data Pricing and Reference Data . More information on NASDAQ traded symbols and their current financial status. Intraday data delayed minutes for Nasdaq and minutes for other exchanges. Dow Jones Indexes SM from Dow Jones Company Inc. SEHK intraday data is provided by Comstock and is at least minutes delayed. All quotes are in local exchange time

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