Whats next for MicroHoo?

Microsoft's deadline for Yahoo! has passed and the market is rife with speculation about the future of MicroHoo! In past few weeks Microsoft executives browbeating about walking away from the deal has made many analysts give as much as 60% chances of this deal not happening. This is what I think about the future of MicroHoo!

Microsoft will not go hostile with their current offer. With current offer that values Yahoo! at about 29.5$ per share, Microsoft is bound to lose the proxy war because even large investors such as Bill Miller have declared that they want the price raised. Raising the price and then go to proxy war seems totally stupid.

Microsoft will not walk away from this deal. Obviously Steve Ballmer has had his eyes on Yahoo! for some time now. They have determined Yahoo! is essential for Microsoft's future and a few billions is not worth betting company's future.

As Google eats the search share from Microsoft and Yahoo, time is of essence for Microsoft. Yahoo's value is going down for Microsoft as time is passing so they want this deal done fast. I will not be surprised if the deal is finalized in next couple of weeks at north of 35$ per share. When this deal is finalized the shares of both companies will rise but in long run, I would be highly bearish on Microsoft.