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MS may need first-ever loan to buy Yahoo

updated 08:20 am EST, Tue February 5, 2008

MS Needs Loan for Yahoo

Microsoft may need to abandon its longstanding financial independence to complete a takeover of Yahoo, the company said late yesterday. Despite its large cash reserves, the company's Chief Finance Officer Chris Liddell acknowledged that the $44.6 billion proposed deal might require that the firm borrow money and accumulate debt. While the $21 billion in reserves owned by the Windows developer would cover nearly all the cash portion of the proposed deal, a loan would help Microsoft avoid wiping out these reserves and leaving itself without options if it needs more cash in the near future, according to the executive.

The willingness to rely on loans indicates Microsoft's commitment to its proposed bid, which is widely understood to be an attempt to thwart Google's control of search and web advertising. The company has officially claimed to be creating a viable alternative in the market.

However, reports have surfaced that Yahoo considers Microsoft a threat and that the company is considering an alliance with Google or other alternative firms as an attempt to make a Microsoft deal impractical or impossible. Google has commented on the deal and warned that Microsoft might translate its monopolies with Office and Windows to the Internet by creating proprietary web standards.

by MacNN Staff



  1. zaghahzag

    Joined: Dec 1969


    so it begins

    this reminds me of AOL/Time Warner. it's going to be a giant disaster for M$. Their debt will spiral and finally they will die the death they so greatly deserve for making all of us suffer with crappy software.

  1. Gee4orce

    Joined: Dec 1969


    The beginning of the end

    This is the beginning of the end for Microsoft. They are so obsessed with going after Google that they are risking their entire business on it.

    I'm all in favour ;)

  1. Deal

    Joined: Dec 1969



    It's like a really bad episode of Jackass.

  1. garmonbosia

    Joined: Dec 1969


    further news

    The rumour is that Ballmer has asked Jobs to help fund the buyout by selling a minority stake in M$.

  1. testudo

    Joined: Dec 1969


    Re: further news

    How would Jobs selling a minortity stake in MS help fund this?

  1. robttwo

    Joined: Dec 1969


    A suggestion

    Ballmer - instead of trying to buy Yahoo - why not use the money to hire decent programmers? Ones that know what they are doing, can adequately test software, and understand the end-user.


  1. Feathers

    Joined: Dec 1969


    twenty-one billion

    I thought M$ cash reserves were larger particularly when you consider that Apple is holding reserves of something like sixteen billion. Of course, M$ market cap is around $283 billion against Apple's $115 billion, so it appears that all round Apple are in a far more solid financial position. This Yahoo thing could really be the making or breaking of Microsoft and is Ballmer really the person to have in charge in a less than bullish climate? XBox replacements could easily knock another billion off those reserves (on top of the supposed one-off charge they've already taken). Gotta love Google and Nintendo!

  1. jdonahoe

    Joined: Dec 1969


    re: Google's comment

    "Google has commented on the deal and warned that Microsoft might translate its monopolies with Office and Windows to the Internet by creating proprietary web standards."

    Duh!! How many times have I gone to a website and told that if I want to see anything on that site, I HAD to use Explorer!! Microsoft proprietary web standards, they're already here!

  1. ender

    Joined: Dec 1969


    re: further news

    I think he was referring to MS buying a minority stake in Apple when Steve Jobs returned.

    You might want to turn up the gain on your Sarcast-o-meter.

  1. danviento

    Joined: Dec 1969


    Wasting SHOWS UP

    This is what happens when you purposefully loose money on products like the XBox 360 just to keep the vapor position of "dominant player," even though they still rank third in sales, no matter how you put it.

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