Stock Market for Beginners

Recap of last year:
Early last year, Microsoft offered to buy Yahoo for about $44.6 billion. However, former CEO of Yahoo, Jerry Yang, refused to sell the company that he had co-founded. Many outraged shareholders have even named him as “Idiot of the Year.” Although Yahoo’s shares have declined because of the failed acquisition, maybe we should see Yang’s perspective. If you had founded a company, and it was your very own company, would you be willing to sell it or do you think you still have a good chance to help it prosper, especially considering that it is Yahoo? Let’s not forget how strong Yahoo had been and how it had dominated the market before Google came. Many would still say yes that the acquisition should have taken place because, what Yang had done, many had considered rather selfish. It seemed like he did not think about his shareholders, as the (probable) best option would have been to sell Yahoo.

This year:
Since Microsoft’s offer, Yahoo’s stock has shed more than half of its value since this time last year, when Microsoft was offering to buy the company for $31 a share. Yahoo is currently trading at around $13 per share.

Now, sources (WSJ) have revealed that Yahoo is in a informal discussion with Microsoft oabout a possible partnership to sell online advertising, a market which Google obviously has dominated. Carol Bartz is now the CEO of Yahoo, taking over Yang’s position since he had stepped down last year. If Microsoft and Yahoo do agree to work together, can they even come close as to challenge Google? Should Google feel afraid or threatened if this partnership succeeds?