Extra Practice News Story #8: Business

Extra Practice news story 8: Business
10/31/07
Jason Rogers
Google Makes Hostile Take-Over Bid

Palo Alto, CA-Google Inc. (GOOG) made a hostile take-over bid for Time Warner Inc. (TWX) yesterday in hopes of producing more content. The $60 billion bid comes to Time Warner as a surprise to Richard Parsons, CEO of Time Warner Cable. “This was out of the blue. This was not expected at all.” Google has proposed a very generous offer to buy Time Warner and has released the breakdown of the proposal at $10 billion in cash, $45 billion in stocks and $5 billion in assumed debt.

According to Dr. Eric Schmidt, CEO and Chairman of Google Inc, “We've actually overpriced the Value in our stock.” When asked how this will help Google in the future, he responded by saying, “We don't have a top notch facility to produce content, Time Warner does,” which shows evidence of Google's desire to expand from a content contributer to a producer as well. While being one of the most hit websites online, Google would increase its influence in the information world by not only contributing to content through its search engine, but would become a main source in producing information as well.

Yahoo! Inc. (YHOO) and Microsoft Corp. (MSFT) were also interested in purchasing Time Warner, but Yahoo CEO, Steve Baller and Microsoft CEO, Jerry Yang, offered no comment on the issue. The Federal Communications Commision would still have to approve such a huge buy out before business decisons are final. However, Industry Analyst Paul Kim believes that the merg "seems to make sense."