Yahoo! Cites Online Ad Growth as Reason for Declining Microsoft’s Offer [2/18/2008]

In declining Microsoft’s recent bid of $44.6 billion, Yahoo! cited the projected growth of online advertising, saying, “The global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010, and we are moving to quickly take advantage of what we see as a unique window of time in the growth—and evolution—of this unique market to build market share and create value for our shareholders.”

With more than half a billion users, Yahoo! in some way engages one out of every two internet users. As such, the company feels strongly that it is distinctively positioned to take advantage of the growing activities web users are flocking to, i.e., shopping, personalized web pages, the ever-present email and online advertising.

With Google positioned as the main nemesis of both, Microsoft felt that it’s acquisition of Yahoo! would better enable them to compete on numerous levels with the search engine behemoth, ie, online video, ecommerce technology and mobile commerce, to name a few.

Continuing its quest to acquire Yahoo! after having its offer rejected, Microsoft is considering such actions as replacing members of the Yahoo! board and launching a proxy battle (per 2/18/08 report on DealBook, the New York Times blog). There has been no official comment from Microsoft regarding these rumblings.

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