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Yahoo May Re-Consider Google Alliance, Rebuff Microsoft
Posted by
Zonk
on Sun Feb 03, 2008 10:33 PM
from the now-the-rubberband-is-on-the-other-claw dept.
from the now-the-rubberband-is-on-the-other-claw dept.
anastasd writes "Reuters is reporting that Yahoo might consider a business alliance with Google as a way to top a $44.6 billion takeover proposal by Microsoft. 'Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, that source said. At $31 a share, Yahoo believes the bid undervalues the company, two sources said. A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.'"
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[+]
Microsoft Bids $44.6 Billion For Yahoo 784 comments
The news is everywhere this morning about Microsoft's $44.6B offer to buy Yahoo. The offer represents $31 a share, a 62% premium over Thursday's closing price; and Yahoo's stock price has been rising in after-hours trading. Microsoft has been making overtures to Yahoo since 2006, according to the CNet article, including a buyout offer last February that was rebuffed. Mediapost.com has some perspective on the deal from the point of view of ads and eyeballs. Such an acquisition, which would be Microsoft's largest by far — it bought Aquantive last year for $6 billion — would need approval by US and EU authorities. A European Commission spokesman declined to comment.
[+]
News: Yahoo Bid shows Microsoft on the Ropes 402 comments
Ponca City, We Love You writes "One day after the announcement of Microsoft's plan to buy Yahoo, there is an interesting piece from the NY Times analyzing the reasons behind Microsoft's bid and proposing that the bid is a tacit, and difficult, admission that Microsoft did not get its online business right and that online losses continue to mount while Google makes billions in profit. Microsoft "finds itself in a battle where improving its search algorithms and online ad software is not going to be enough," writes the Times. With the Yahoo bid Microsoft is trying to buy a big enough share of the market to be a credible alternative to Google with online advertisers. "This shows just how worried Microsoft is by Google," says David B. Yoffie. "Microsoft has faced competitive threats before, but none with the size, strength, profitability and momentum of Google.""
[+]
News: Yahoo Deal Is Big, but Is It the Next Big Thing? 159 comments
mattsgotredhair brings us a NYTimes article discussing how Microsoft's bid for Yahoo contrasts against one of the core philosophies of Silicon Valley: looking forward. From the Times:
"Microsoft may see Yahoo as its last best chance to catch up. But for all its size and ambition, the bid has not been greeted with enthusiasm. That may be because Silicon Valley favors bottom-up innovation instead of growth by acquisition. The region's investment money and brain power are tuned to start-ups that can anticipate the next big thing rather than chase the last one. 'This is the very nature of the Valley,' said Jim Breyer of the venture capital firm Accel Partners. 'After very strong growth, businesses by definition start to slow as competition increases and young creative start-ups begin to attack the incumbents.'"
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I'd be sad if Microhoo goes ahead (Score:5, Insightful)
Re:Their (lack of) privacy policy (Score:5, Interesting)
It is impossible for them to be reading my email or anything else I wouldnt like.
Google Maps is made by Aussies you know.
Its far better than WhereIs for most things although it doesnt function as a phone book.
I hate WhereIs's UI.
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Re:Their (lack of) privacy policy (Score:5, Insightful)
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Re:Their (lack of) privacy policy (Score:5, Informative)
Have you ever read the Google and GMail Privacy Policies?
Some key facts (read: not a 100% complete copy/paste from the site) from the Google Privacy Policy (http://www.google.com/privacypolicy.html):
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Re:Their (lack of) privacy policy (Score:4, Insightful)
That being said, some months ago I was talking with an American guy who is working in my office (he is doing his second PhD in London and working here part time) and he told me that the reason he does not have one of those web mail accounts is not for what they do *now* for the information, but because you do not know what they can do in the future. Once your information is public, it remains public forever. And you may think it is not public giving it to any of those companies, but it really is, the only thing that makes it non public is that nobody cares about it. But if in the future you had some issue that made *someone* important care about you, I am pretty shure they will find means to obtain that information.
I keep using gmail to this date, but I am really sure the American government has plenty of information about me by now. Fortunately, I plan to keep out of the USA and keep in a country where they have no real place of invading.
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Re:Their (lack of) privacy policy (Score:5, Interesting)
Although your claim at being able to predict the future does make me question whether or not you are a rational person when it comes to Google.
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Re:Their (lack of) privacy policy (Score:5, Insightful)
a) Not typical
b) Not all that predictable
Rationale: How many other Google's are there? They've become a part of our LANGUAGE, that is not typical. Also - Everyone was predicting what the gPhone would be. They were wrong, it wasn't a "phone" it was a phone platform. Who predicted Google would be going after the 700MHz spectrum? Where is the Google OS?
Not typical, not predictable. Is that good? Or bad? I don't know.
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Re:Their (lack of) privacy policy (Score:5, Insightful)
I become a statistic in their models and anonymous.
It happens everywhere.
I'd rather it be Google than another company.
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Re:Their (lack of) privacy policy (Score:5, Insightful)
Is that why when the US government was demanding search data, that Google was the only company willing to butt heads with the government to protect privacy, while Yahoo, AOL and Microsoft all volunteered private data?
To say that Google lacks a privacy policy is pure fiction. http://www.google.com/privacypolicy.html [google.com]
Next time check your facts.
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What's in it for Google? (Score:5, Insightful)
Google can use the 45bn in far better ways by cutting into new markets & technologies (eg. Android).
Re:What's in it for Google? (Score:4, Interesting)
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Re:What's in it for Google? (Score:4, Informative)
This is very different from MS doing, say, Zune or MSN. In both the MS cases these are independent strategies that have no synergy with Windows or Office (ie. Windows and Office don't really benefit from Xbox and MSN).
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Re:What's in it for Google? (Score:4, Insightful)
Google doesn't want you to use more Google services. They want you to see more Google served advertising.
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Re:What's in it for Google? (Score:5, Insightful)
Not that it would happen, but imagine if Google acquired Yahoo. They'd have vast resources of hardware and user accounts at their dispense - two things that Google especially wouldn't mind having. A merger between Yahoo and Google groups? News? Oh, and did I mention they're the number one site on the web?!
A more likely option, avoiding the anti-trust nonsense, would be Google purchasing some stock in Yahoo, or the two coming to some sort of mutual agreement such that Yahoo can consolidate and focus funds and Google gets some new toy.
By no means is it a dumb idea for either of them. The only person who loses is Microsoft, and I think everyone can agree that's an acceptable loss.
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Check your stats (Score:5, Informative)
Google and yahoo are neck and neck (with google slightly ahead for the last while). That gives google 1 & 3, or 50% vs 30% if you combine youtube + google.
Now look at http://finance.yahoo.com/q/bc?s=YHOO&t=2y&l=on&z=m&q=l&c=GOOG [yahoo.com]
Yahoo on the way down and Google (relatively) up.
Sure, Google could buy Yahoo for a quick rush, but in the longer term (1-2 years) yahoo will just fade by themselves unless they do something very interesting (which they have not done in a long time).
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Re:Check your stats (Score:5, Interesting)
Can't argue with stocks, but Yahoo's never been good with making money - Google and Microsoft are. Yahoo is good because it's got controlling stakes in instant messaging and an enormous amount of people backing them and their community. If you can get any sort of money earner on those pages, that finance page won't count for shit.
(I'd also like to point out you had to link to yahoo for that page)
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You guys have it all wrong (Score:5, Interesting)
MS USE to have something to offer by having a stock that would increase. But the company overall was worthless which is why once somebody made the money via stock, they are gone. These days, MS stock is over priced and has not really changed in price for a long time. Worse, they have also gone to treating their sales ppl like gods, while the techies get far less.
Google is still in that phase where not only does the stock continue to grow (overall), but the techies (those that come up with good ideas ) are treated decently. I suspect that the sales ppl are also treated well, but the techies can make a portion of the money on their ideas. In fact, Google will help you to spin off if good enough. The other 2 simply steal your work.
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could be useful in a few ways (Score:3, Interesting)
some other company (Score:5, Interesting)
Re:some other company (Score:5, Insightful)
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What does Yahoo do exactly, that gives them worth? (Score:3, Interesting)
Re:What does Yahoo do exactly, that gives them wor (Score:5, Insightful)
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Re:What does Yahoo do exactly, that gives them wor (Score:5, Insightful)
i have a sneaking suspicion there is another smaller .com bubble forming. especially when yahoo start talking about being under valued at 44 billion.
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Re:What does Yahoo do exactly, that gives them wor (Score:4, Insightful)
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Re: (Score:3, Informative)
Remember Yahoo isn't just used in the US, it has international versions as well. There's six billion people in the world and probably over 2 billion have regular internet access by now (my guess, no source). 25% of internet users using Yahoo regularly is not a stretch of the imagination by any means.
Not really, remember the first dot-com bubble was caused by people trying to value c
Yeah Yeah Yeah Just trying to get the bid up (Score:5, Interesting)
Google + Yahoo! wouldn't fly with the antitrust regulators.
Re:Yeah Yeah Yeah Just trying to get the bid up (Score:5, Insightful)
And they would automatically let Yahoo! + MS through?
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just jacking up the price (Score:5, Insightful)
Once the directors receive an offer, it is their duty to figure out whether their shareholders are better off with Yahoo alone or not. If they figure out that it is better selling (I am sure they did already), it is their obligation under current Delaware law to auction the company. That's exactly what they are doing. There isn't a single transaction that closes at the starting price.
If the directors decide that it is better going alone, it will end up with a Proxy fight and a lot of lawsuits (those will happen anyway)
Right now, arbitrageurs are going long on Yahoo and short on MS.
Re:just jacking up the price (Score:5, Interesting)
Once the directors receive an offer, it is their duty to figure out whether their shareholders are better off with Yahoo alone or not. If they figure out that it is better selling (I am sure they did already), it is their obligation under current Delaware law to auction the company. That's exactly what they are doing. There isn't a single transaction that closes at the starting price.
If the directors decide that it is better going alone, it will end up with a Proxy fight and a lot of lawsuits (those will happen anyway)
Right now, arbitrageurs are going long on Yahoo and short on MS.
From: http://investment.suite101.com/article.cfm/posttakeover_defense_strategies [suite101.com]
White Knight and White Squire Techniques
Employing a white knight defense is often the best solution available
to target companies. It involves finding a third party, a white
knight, that a target company can partner with and which is considered
a good strategic fit with the target. Finding such a white knight can
result in justifying higher market capitalization of the target and
making it more difficult/expensive for an acquirer to go through with
the bid.
Finally, a white squire defense involves finding a friendly and
strategically suitable third party to buy a considerable minority
holding in the target company that could be sufficient to block a
hostile takeover without selling any of the crown jewels, selling of
the entire company, or making any foolish counter bids.
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Re:just jacking up the price (Score:5, Informative)
Having said that, there are plenty of anti-takeover defenses. From the "Nancy Reagan defense" (just say no), to staggered boards, to poison pills (Yahoo has one). As Peoplesoft teaches, there is nothing that can stop an acquirer determined to buy at whatever price.
Now, some math to predict what's gonna happen. There are roughly 1.5B shares. 25% of the shares changed hands on Friday. You can bet that most of them, say 20%,ended up on the hands of arbitrageurs. Legg Mason, a hedge fund has 8% and 11% are in the hands of another hedge fund. That makes 40% of the shares in the hands of people in search of the highest return, and screw everybody else. Most of the institutional holders are generally sympathetic to management, but they hold roughly 50% of the company (excluding the two hedge funds I mentioned before and what they sold in these few days). MS only needs another 10%. If MS are smart, they have already accumulated at least 5% (they have 10 days to report any ownership higher than 5% to SEC). Now on Jan 29 and 30 the stock volume spiked. Just the excess volume (over average) is 10% of the shares. Any guess who may have bought those shares? Watch for MS coming out next week with a 10% ownership.
So, let's say that Yang doesn't want to sell. He's got little or no stock. Filo has 5% of the Yahoo stock. The board may be loyal to Yang, but it must be very careful because the Revlon Duties [abanet.org] have been triggered and they impose no loyalty. Once the company is in play, the CEO counts only as much as he can control the board.
So, here is what's gonna happen: if MS doesn't raise the price enough and Yahoo sells, MS (or another acquirer) and the hedge funds stay below 15% ownership to not trigger the poison pill. At the upcoming shareholders meeting (should be in May or June), a proxy fight erupts, and MS asks the poison pill to be repealed. The arbitrageurs vote yes, and somebody buys Yahoo. Most likely MS, but if somebody else has $50-60B, why not? The hedge funds don't care who wins as long as the company is sold.
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Hype on something unlikely to happen... (Score:5, Insightful)
"Few natural bidders exist beside Google
that could engage in a bidding war, and
Google would be unlikely to win approval
from antitrust regulators, some Wall Street
analysts said on Friday."
So, um, it's not likely to happen.
** Yawn **
It's safe to move along.
Yahoo is popular outside of the US (Score:5, Informative)
Yahoo is also an ISP in Japan with a rather large penetration.
Re:Yahoo is popular outside of the US (Score:5, Informative)
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Google? No way. (Score:5, Interesting)
And it also means that Google would have to pay *EVEN MORE* than that in order to make a better offer than Microsoft. Why would Google spend $46+ Billion just to buy a competitor who is sinking fast? Just doesn't make sense. Google has a lot of money, but I doubt they're willing to spend *THAT MUCH* just to piss off Microsoft.
Timing of the bid (Score:3, Interesting)
Re:Timing of the bid (Score:5, Interesting)
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Google Wants to Stop This Takeover (Score:5, Interesting)
Yahoo! and the future of the Internet
2/03/2008 11:45:00 AM
Posted by David Drummond, Senior Vice President, Corporate Development
and Chief Legal Officer
The openness of the Internet is what made Google -- and Yahoo! --possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It's what makes the Internet such an exciting place.
So Microsoft's hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the Internet: openness and innovation.
Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.
Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to
unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.
This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first --and should come first -- as the merits of this proposed acquisition are examined and alternatives explored.
Microsoft is making a mistake on this one (Score:5, Insightful)
Where are those users going to go? I'd wager the vast majority of them will go straight to Google.
Google doesn't need to buy Yahoo, they're going to get the users anyway
I hope it goes through (Score:4, Insightful)
Re:undervalues? (Score:4, Insightful)
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Re:undervalues? (Score:5, Insightful)
So, they could buy the stock for $12, thought it was worth more than $31, and weren't buying more?
I find their lack of faith
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Re: (Score:3, Funny)
Re:Lame chair joke (Score:5, Funny)
No, can't complete joke. Still lame. Not funny. No chair jokes have ever, can ever, or will ever be funny. Stop insulting our humor glands!
Relax. Pull up a chair.
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Re:Are they kidding? (Score:4, Informative)
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Re:microyahoogle (Score:5, Insightful)
They're #3, but like Google, they came by that position honestly (MSN got to its slot by 'dint of default'). It may be anecdotal, but Yahoo has a lot of income that comes in from places that you and I may find unlikely. They also have a rather solid set of services that 1) doesn't require Windows or a Passport Account, and 2) is relatively uncluttered and straightforward when compared to MSN. When it comes to non-search functions, Yahoo is actually IMHO better than Google in a lot of areas, simply because those areas don't have that 'beta' feel to it that Google sometimes does, or that 'we require possession of your soul before installing this' feel that the MSN does (e.g. messenger services*).
While I pretty much use Google for most of my stuff nowadays, There is still Yahoo Finance, among a bucket of little things that make it useful to me.
This is just anecdotal, but I know I'm not alone, and Yahoo does have a large and loyal following. I could see them diminish over time perhaps, but not necessarily die off.
* I use Pidgin everywhere now, but long ago, my Mac wound up with MSN and Yahoo Messenger on it due to social and work demands... and GAIM wasn't IMHO a viable option there.
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Re:microyahoogle (Score:5, Informative)
Of course, that can change quickly...
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Re: (Score:3, Insightful)
Re:A dose of reality (Score:5, Insightful)
Fortunately, part of Google's current "sexiness" comes from them embracing various standards and open-source projects that allow them to "interoperate", whereas Microsoft famously tries to hold on to its "infrastructural lock-in" with stuff like MS Office document formats and file-system formats.
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Re: A dose of reality indeed (Score:4, Informative)
"Most of Google's revenue is derived from advertising programs. For the 2006 fiscal year, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues."
-http://en.wikipedia.org/wiki/Google
So, I congratulate you on being a postgrad of competition law, but knowledge of the law doesn't mean anything if you don't understand the subject that you are trying to apply it to (IE: an advertising monopoly, NOT a tech monopoly). But what do I know? I'm just a naive and biased "techie" after all.
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Re:A dose of reality (Score:4, Interesting)
Furthermore, Google shows little interest in erecting barriers to entry; quite the opposite in fact, Google has always fought to keep those barriers *low*. Witness the ease of switching from GMail to another webmail provider: automatic forwarding and free POP/IMAP access make it far easier than, say, Microsoft's Hotmail. Also witness their lobbying for net neutrality: while there is obviously an element of self-interest in not wanting to pay ISP extortion fees, a non-neutral net could be a huge barrier to entry in Google's market, potentially in the end being to Google's benefit. So far, Google has rejected such tactics.
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