There’s been a lot of talk today about Microsoft’s effort to acquire Yahoo and what a successful takeover might mean for various open source software work with which Yahoo is associated. I’m not sure what to make of all that, but I am struck by the fact investors seem to think that a Microsoft takeover of Yahoo will make the combined company worth about $8 billion less than the sum of the values of the separate companies. How did I get this number? Well, the merger became public information before the stock market opened this morning. At the end of today’s trading, Microsoft’s stock price had fallen by $2.15 per share, while Yahoo’s stock price had risen by $9.20 per share. Multiplying these share price changes by the number of shares for each respective company, the implied value of Microsoft was reduced by $20 billion, while that of Yahoo was increased by only $12 billion. Investors, at least, are betting that Microsoft cannot successfully integrate Yahoo’s business into its own, and that the takeover will effectively waste $8 billion.

Related posts:

1. Microsoft Sucks Up to the EU, EU Gives Microsoft a $1.35 Billion Fine to Suck On Earlier this week Microsoft promised to be friendlier towards open-source...
2. How Linux Can Take The Marketshare Microsoft Throws Away Regardless of what you think Microsoft is doing wrong, no...
3. Ubuntu Brainstorm: The Perfect Combination of Open-Source and Democracy Today Ubuntu announced something that I have thought they should...
4. EU Not Impressed By Microsoft's Words, Wants Action The EU seems to think Red Hat got it right...
5. JVC The Latest to be Cought in the Microsoft Patent Deal Scam It appears that JVC is the latest company to sign...