Bank of America is buying Countrywide Financial for just over $4 billion according to reports pouring out of everywhere. The deal is about $500 million less than Countrywide’s value on Thursday, according to MarketWatch, but since the transaction is all-stock, investors in the financial firm will stand to gain from the increase in Bank of America stock prices.
A blog by Larry Dignan on ZDNet projects that when the deal is closed, Countrywide Financial, which is the second largest advertiser online today will not be around tomorrow, stating that B Of A is not likely to spend with the fervor its new company has on online advertising.
He continues to say that while Countrywide’s stock plummeted, the company would advertise more on all three of the major online ad competitors Google, Yahoo and Microsoft (or GYM).
In July, Countrywide was the fourth largest online advertiser spending $34.77 million, and in November, the firm took the number two spot with a bill of $57.6 million in online spending according to Nielsen/Netratings. This signals a major hit to be taken and a harsh reality of the recession on hand.