Michael B. Krause submits: Let me speculate. Microsoft's (MSFT) failure to acquire Yahoo (YHOO) put it in the perfect position to come back at a much lower price.
On
a cash flow basis, assuming MSN were profitable equal to the rest of
Microsoft's properties (i.e. Office and Windows), it would be
valued at roughly $10B to $15B for owning 10% of the search market.
That would make Yahoo worth $15B-$22.5B for owning almost 15% of search.
Adding a premium that makes sense, lets say it's worth $30B. By my math,
at 1.4B shares, that's a ripe offer of $21.42/share, or a rich 38
multiple for a business with relatively meager 10-20% growth rates! Complete Story »
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