Peter Kafka

Recent Posts by Peter Kafka

Google Raises Bid for On2, Just a Bit

Google offers what it says will be a final carrot to shareholders at On2, a video compression company it wants to buy: The search giant is adding $26.5 million to its original offer of $106.5 million for the company.

That’s a 20 percent premium over the price Google originally announced it was paying for On2 in August, and Google (GOOG) says that’s the best it can do. On2 shareholders will get 15 cents in cash for every share in addition to the 60 cents worth of Google Class A stock offered in the original deal.

Will this appease On2’s dissident investors, who think the company is worth closer to $6 a share? We’ll know by Feb. 17, when the deal goes to a vote.

Google, of course, could easily pay much more to get the angry On2 contingent to shut up. And at this point, you have to wonder if the headaches associated with the deal are worth it–Google, remember, is valued at $192 billion.

But Google is in the midst of a lengthy shopping spree. And it certainly doesn’t want to revisit the price of every purchase it makes. Presumably, that’s why the company is playing hardball, or close to it, on this one.