The Microsoft-Yahoo deal: How does it compare?

The $44B buyout is Microsoft's biggest ever such move

Even by the bloated standards of high-tech mergers and acquisitions, the proposed Microsoft Corp.'s purchase of Yahoo Inc. appears to be the largest ever among technology firms. It is certainly Microsoft's largest. The company mostly buys smaller firms for less than a billion dollars to fill in gaps in its product lineup. But that may be changing. Last year, for instance, Microsoft bought Seattle online advertising firm aQuantive Inc. for $6 billion, its largest ever until the long-rumored Yahoo deal was unveiled on Friday.

Here's how the proposed Microsoft-Yahoo deal compares to some other memorable high-tech acquisitions by the company's main competitors:

Deal: Microsoft offers to buy Yahoo

Why: Microsoft wants to buy into the search/online advertising biz. Yahoo is struggling. Their common foe: Google.

Price: $44.6 billion -- half cash, half stock -- a 62% premium over Yahoo's price a day earlier.

Hostile/friendly: Unsolicited, though the two firms have had discussions during the past 18 months, according to Microsoft CEO Steve Ballmer.

Key premerger stats:

Market cap: Microsoft: $303 billion; Yahoo: $25.6 billion

Head count: Microsoft: 78,565; Yahoo: $14,300 (minus 1,000 in layoffs announced earlier this week)

Revenues: Microsoft: $58 billion; Yahoo: $7 billion

Net profit: Microsoft: $16.9 billion; Yahoo: $660 million

Deal to complete when: Microsoft is targeting the end of this year, if Yahoo agrees and no regulators call foul.

Other major Microsoft acquisitions:

1999: Visio Corp. (business planning), for $1.4 billion

2001: Great Plains Software Inc. (accounting and CRM), for $1.45 billion

2002: Navision Software (ERP), for $1.45 billion

2007: aQuantive Inc. (Internet advertising), for $6 billion

2008: Fast Search & Transfer ASA (enterprise search), for $1.3 billion

Deal: Hewlett-Packard Co. buys Compaq Computer Corp. (2001-2002)

Why: To beat back Dell in PCs and get within striking distance of the overall IT leader, IBM.

Price: $25 billion in stock, though the value fell to $19 billion by the time the deal was completed nearly a year later.

Hostile/friendly: Friendly, but the move quickly turned messy as parts of HP's own board -- led by the Hewlett family -- opposed the merger, which was led by CEO Carly Fiorina.

Key premerger stats:

Revenues: HP: $47 billion; Compaq: $40 billion

Head count (combined): About 162,000

Number of products (combined): 85,000

HP and Compaq's PC businesses, No. 2 and No. 3, respectively, behind Dell at the time, were both losing money.


Rocky for a while. HP laid off more than 15,000 employees, or 10% of its workforce. Fiorina was forced out, and new CEO Mark Hurd was hired to take her place. HP later revealed that it had been spying on board members and the media. Four years later, HP has reached its fiscal goals. It reported $104 billion in revenue last year and $9.6 billion in net income. In 2006, HP regained the lead from Dell in PCs and took the overall IT spot from IBM. And it is hiring again: The company now has 156,000 employees, up from 145,000 immediately after the merger.

Other major HP acquisitions:

1997: VeriFone, in a $1.2 billion stock swap (sold in 2001)

2006: Mercury Interactive Corp., for $4.5 billion

2007: Opsware Inc., for $1.6 billion

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