The on again, off again discussions between Microsoft Inc. and Yahoo! Inc. are seemingly off again. The two reportedly ended talks Thursday without reaching a merger likely ending discussions permanently. The busted deal opens the door for Yahoo! to intensely discuss a search advertising pact with Google Inc. Shares of Microsoft edged up while Yahoo! declined as the markets overall finished slightly up. The Dow closed Thursday up 57.81, or .48%, to 12,141.58 while the Nasdaq inched up 10.34, or .43%, to 2,404.35. Here's a closer look of the performance of deal-related stocks on Thursday:
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Shares of Microsoft [MSFT] finished up $1.12, or 4.13%, to $28.24, while Yahoo! [YHOO] closed down $2.63, or 10.06%, to $23.52. For Microsoft, the deal ends a five-month pursuit that if consummated would have created a formidable competitor to Internet giant Google. Now, Microsoft will look elsewhere to find a target that would complement its core businesses while providing a combination that would challenge Google. Microsoft's failure to acquire Yahoo! unintentionally pushed the search giant closer to Google. Yahoo! and Google are now discussing a possible advertising deal. The Wall Street Journal says analysts believe such a pact would significantly increase Yahoo's cash flow because Google's system generates significantly more revenue for each search query than Yahoo's does.
Lehman Brothers Inc. [LEH] is working quickly to rejuvenate investor confidence as CNBC is reporting late Thursday afternoon that the investment bank is actively seeking offers. After securing a $6 billion capital infusion earlier in the week, the New York-based investment bank removed chief financial officer Erin Callan and chief operating officer Joseph Gregory. On the surface, investors took the executive moves on Thursday as window dressing as the stock closed down $1.05, or 4.42%, to $22.70. - Gerald Magpily
