In a move to better compete against Google, software giant Microsoft made a cash-and-stock bid for Internet portal Yahoo on Feb. 1 that valued the company at $31 per share, or $44.6 billion. That represents a 62% premium over the company's closing price of $19.18 on Jan 31.
On Feb. 1, Microsoft shares finished down $2.15, to $30.45, while Yahoo shares soared 48%, closing at $28.38, up $9.20.
In a letter to Yahoo's board of directors, Microsoft CEO Steve Ballmer said, "Today, the market is increasingly dominated by one player that is consolidating its dominance through acquisition. Together, Microsoft and Yahoo can offer a credible alternative for consumers, advertisers and publishers." He was referring to Google's $3.1 billion acquisition of display ad firm DoubleClick
But the announcement troubled Jeff Chester of the Center for Digital Democracy, who has been pushing the Federal Trade Commission to pay closer attention to the merging of Internet media.
Yahoo said in a statement that it would "evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans."