INTC has a PE of 18.36, quite good, and may remain in business for decades, even more than Microsoft. YHOO has a PE of 55.04, you could get better yields on T-Bonds. Spending 48 billion on such garbage is throwing the money down the toilet.
This will be the next Skype (to EBay), although many times larger. What kind of knucklehead pays a premium of 60% plus on a company that is already highly overvalued? In a couple of years, Gates will be telling why they accidentally paid twice what they should have...
I do not think MSFT wants to be in the chip business, nothing to do with their current software and internet models. Their biggest competitor is Yahoo in a way so they want to grab all that is valuable from them. MSFT is flush with cash so $48 billion is probably worth the risk to them since they can now add a lot of add revenue and other sources of income YHOO provides. Sure they may be over-paying but the positive effects may take several years to be realized.
because intel is a lost cause and the money is in the ads and its looking to compete with google before its too late
MSFT and INTC are in two different businesses so I do not see why the government would raise anti-trust issues. MSFT would do better taking over yahoo to compete better with GOOG. Whether it would work out well is another story.
Better buy (of course wouldn't be permitted) would be AAPL... And then decide to sell OS X for x86 and own the PC market. Now THAT would be entertaining.