I agree that there is a strategy here. However, every strategy needs to be evaluated relative to the cost, and from my point of view, the price that Intel is paying to execute this strategy is too high.

If we look at MFE's peak earnings from FY2009, it's $173m. So a $7.7b price tag is just under 45x. In other words, it'll take 45 years of FY2009 earnings to merely regain the initial investment. Now let's be more generous and give Intel a low discount rate of 5% and assume that those earnings grow compounded 10% each year. It will still take 25 years for Intel to make back that investment.

Of course, the investment gets better if there are synergies that will provide additional boost to Intel's earnings, but what are they? I don't really buy (2) since Intel has shown that they are capable of getting their software onto your computer when they want to (see their integrated video drivers that download through Windows Update).

But even if they couldn't, they could have just continued collaborating with McAfee without buying them. That's essentially the exact same thing as what's happening now, minus the big transfer of wealth from Intel shareholders to McAfee shareholders.

I suppose that I'm just not convinced that Intel couldn't have rolled their own solution for less than $7bln. Even if they really needed to buy McAfee, a 60% premium over the market price is pretty steep, and it's hard for me to see how that adds more value to Intel shareholders than a 7% special dividend or buyback. So far, I haven't seen an argument that's made me think, "Oh yes, that IS something I'd pay $7 billion for."