Extra Practice News Story 7: Business

Google Bids on Time Warner

Posted: 9:19 p.m., PST, March 8, 2007

PALO ALTO Calif- It seemed as though the closing bell of the NYSE had a different tone today with news of Google Inc. (GOOG) hostile takeover bid of Time Warner Inc. (TWX). In response to the 50 billion dollar bid the CEO of Time Warner Richard Parsons said, “it was unexpected” but he later said that he would take it seriously. Parsons said that the offer would force them to evaluate their worth, only then would Time make the decision to sell, or be sold. William Gates the CEO of Microsoft Inc. (MSFT) was blown away at Googles’ bid for Time Warner, he told reporters, “I never would have guessed,” and it seems that the rest of the corporate world feels the same way. That is, everyone except Google.

When asked about today’s unexpected bid Google CEO Eric Schmidt simply said it was the opportune time for a, “long overdue” merger. The bid consisted of 10 billion in cash, 35 billion in stocks, and five billion in debt relief. Parsons has 30 days to provide an answer. But everyone really wants to know what Michael Powell, the Chairman of the Federal Communications Commission has to say about a merger of this magnitude. “We would stop it … if it proved negative for consumers” Powell said. Whispers of a anti-trust case started to float around after word of the bid came out, but Powell simply said that only after the deal was signed, then the FCC would investigate the claim of market monopoly.