In a surprise move that caught Wall Street off-guard, the founders of Google announced today that they will purchase Microsoft. While they expect to have to spin off some core assets in the merger such as the company’s rapidly growing Gmail service, it is expected to be a smooth transaction. Google will pay 290 billion dollars for the
According to Bill Gates, the merger makes sense because it allows the companies to share best of breed desktop and server software with leading edge search technology. Microsoft Office will become Google Office as part of the deal and MSN search technology will be absorbed by Google.
Oracle’s Larry Ellison said that this deal is typical Microsoft. They beat the system and found a way to combine their technology with Google’s. Ellison went on to say that in the end, Oracle has the best database software and will win the search engine wars. Expect a search service from Oracle by Q2. Analysts think Oracle can become a major player in this space now that there is less competition.
Jeff Bezos, Amazon.com’s founder chimed in by saying that this merger is good for the market and Amazon will benefit from the good relationship it has in place with both companies. “Amazon is all about customer service and being the leading place to purchase online. The Google and Microsoft deal means there will be a larger and more powerful search company in the market, driving ever more traffic to Amazon’s e-commerce site,” said Bezos.
MSNBC’s Jim Cramer was quoted as saying, “Has the whole world gone mad? I mean it is ridiculous to think that these two large companies would be allowed to merge and take over the market. This reminds me of the ExxonMobil deal. I would be a buyer of Google if the stock dips into the $150 range which I expect it to by mid-summer.”
This deal leaves companies like Yahoo! In an interesting place in the competitive search market. Many people wonder if two strong search competitors are enough to keep the market competitive. The SEC is expected to allow this merger and the deal will be done if 4 months from today. Speaking of today, Happy April Fool’s Day!