MicroHoo: Deal failure, industry rivalry, and sources of overbidding

► On February 1, 2008, Microsoft offered $43.7 billion for Yahoo. ► Investors considered the bid too high. ► The announcement combined returns implies a total value destruction of $13 billion. ► Microsoft's aggressive move is rooted in its rivalry with Google. ► The personality traits of the CEOs explain also a portion of the overbidding.