Yahoo Sued for Spurning Microsoft

tuxgeek writes "In the continuing saga of Yahoo resisting a Microsoft buy out, Yahoo is now being sued by its shareholders. 'Two Detroit pension funds have sued Yahoo Inc. and its board of directors, saying they breached their duties to shareholders in trying to thwart a takeover by Microsoft Corp. The lawsuit was filed in Delaware Chancery Court on Thursday by lawyers representing Detroit's police and fire retirement system and general retirement system, as well as 'all other similarly situated public shareholders.'"

Beholden to short term investors

[seifried (12921)]

Lovely, some short term investors would liek to crack open the golden goose and get allt he eggs now. Which may not be a bad idea (I can't imagine Yahoo!'s share price going up very significantly unless they have something very surprising in the works. If I was a shareholder I'd probably want to sue them too, but I'd feel dirty about it (but rolling around in money would probably cure that).

Re:Beholden to short term investors

[LiENUS (207736)]

It's bad that they're doing this. I would suspect that Yahoo! has a good reason for refusing the takeover attempt (possibly trying to prop the companies financials up to leverage a higher bidfrom Microsoft). In suing the board members they stand to earn what they would have earned should Microsoft have succeeded in the bid. However if they laid and waited patiently there would be a good chance of Microsoft offering a higher bid. Theres also the possibility of them getting no future bids from Microsoft at all, however I believe the potential for rewards far outweigh the risks. Microsoft wants Yahoo! for a reason and it's not just that Yahoo! is a search company. It's the whole package the search, the messenger and

Re:Beholden to short term investors

[jez9999 (618189)]

It's the whole package the search, the messenger and

... looks like it's not the whole package after all.

Killing the goose that lays the golden eggs

[SgtChaireBourne (457691)]

It's more than a case of killing the goose that lays the golden eggs. Gatesists made clear that they would not take "no" for an answer [searchenginewatch.com] and would continue their plans against Yahoo one way or another. These so-called pension funds are likely part of that approach and just softening up Yahoo, while setting the media against the board in prep for its ousting. One point which is unlikely to ever make many mainstream news sites or forums, even open source ones like Slashdot, is that Microsoftologians are likely to try to replace Yahoo's board [vnunet.com]. Poisoning the press against the board is a first step.

Later, preventing the Yahoo employees from jumping off with golden parachutes might be a repeat of what MS did to Borland [news.com], except against key open source projects. Yahoo contributes in a big way to many open source projects, PHP and BSD being two Very Important (tm) ones. Getting Yahoo would crush a competitor to the spectacularly failed MSN. So without the 'chutes many would have to stay and MS could simply have them sweeping floors or making coffee.

There is also the question of Zimbra [zimbra.com], which was recently purchased by Yahoo. MS Exchange is about the only thing that ties Windows into either/both the desktop and the server room. Zimbra is one of the few competitors to MS Exchange, besides Kolab [kolab.org] and Citadel [citadel.org], none of which get much press. Quite a few shops would stop or drastically decrease use of MS products without MS Exchange. Zimbra is currently not GPL. Buying Yahoo would allow Zimbra to be put on ice as MS did with FoxPro [foxprohistory.org]

Advertising, aka tracking users, is another problem. MS execs want into advertising. Controlling the adservers allows a chance, finally, at income. It also allows access to be tweaked. Ads get served up first before content and delay, especially at the beginning, drastically reduces viewing time and thus mindshare. The first moments are crucial and studies show that the cap is set at 20s. A delay, on purpose or by accident, of even a fifth of a second x one million page views is hundreds of lost viewing hours. So the potential for severe abuse is there in addition to the technical problems MS services and servers are known for.

At the bottom is also a question of money. Many articles somehow neglect that much of the initial offer was funny-money, aka MSFT stock, which MS prints on demand. The noise and smoke about the attempted take over does well at drawing attention away from what must be some rather 'creative' book keeping there in Redmond.

There are plenty more possible reasons to go after Yahoo's board. Having sockpuppets poison the press makes sense for many of them.

Re:

[SerpentMage (13390)]

What a pile of BS you just wrote.

>Many articles somehow neglect that much of the initial offer was funny-money, aka MSFT stock, which MS prints on demand.

You got proof of this? If not you know I could charge you with a felony! The SEC does not take kind to this type of talk because it is called talking up or down a stock. The real reality is that Microsoft offered a deal where the takeover would be up 50% cash, and 50% Microsoft stock. Secondly nowhere has Microsoft said that the stock would be the resul

Zimbra, Domino, Byarni, Groupwise

[SgtChaireBourne (457691)]

There's plenty of Exchange alternatives out there. You got a good chunk of the open source ones, but there's plenty of commercial competitors out there too. Domino, Byarni Insight, Novell Groupwise to name a few of them.

Yep. With Zimbra, Kolab, and Citadel that makes six. However, the magazines and newspapers don't dare write a word about them, even if they would. In addition to being one of the last remaining advertisers, MS has fifth-columnists [groklaw.net] working against competition in many places. It's not a conspiracy, just greed and/or politics.

The main reasons people use Exchange is because it is tied into Active Directory exclusively which is tied into their Windows Desktops exclusively. It also tied exclusively into Outlook (which most businesses have due to the Office monopoly), the functionality in Exchange mirrors that for Outlook; they are a perfect lock-in by design. It always comes back to illegally leveragingthe Windows/Office monopoly and vendor lock in.

There fixed that for you. It's one aspect near the heart of the 10+ year anti-trust trial MS lost in 2004 [bbc.co.uk] and lost in appeal for in 2007 [arstechnica.com].

If Windows or any of the products worked with standards, then it would be possible to swap out components. One reason for the extreme suckitude is that the lock-in guarantees no competition. Old habits die hard and going way back, MS DOS 4 sucked rocks a market for DR-DOS which in turn caused MS-DOS 5 which unlike 4 was usable. Same for the Windows-Outlook-Exchange, except now there is lock-in to such an extent that businesses have to be quite serious about dropping MS and getting into functional products.

Re:Beholden to short term investors

[nbert (785663)]

As an individual shareholder I probably would not sue, at least if I'm interested in long-term profit. I personally don't see how Yahoo can generate more wealth if they belong to a company which has managed to gain around 6% market share by investing billions. The logic behind it seems to be very flawed.

But like you said the pension funds don't seem to be interested in long-term growth - they'll most likely pull out the money right after the companies have merged (it's not that they hold the stock much longer in case they don't merge). I don't like to judge this behavior. Pension funds are obligated to do whatever is necessary to maximize the profit of their investment. One might argue that this is very much the same case if you hold stock as an individual, but I'd argue that there is less freedom of choice if you manage the money of maybe hundreds or thousands of individuals.

Re:

[umghhh (965931)]

It is funny to look at it from perspective especially historical. I admit I may be mistaken here but I was always convinced that the purpose of shares existing in the first place was to have a possibility of shared ownership for many indihviduals. This is not really the case anymore and it is mostly used for pure speculative purposes that hardly have anything to do with reality of anyone company making profits or not. OTOH this is the only remaining option for owners to get managers to do what they want.
So

Re:

[nbert (785663)]

This is not really the case anymore and it is mostly used for pure speculative purposes that hardly have anything to do with reality of anyone company making profits or not.

Many countries have or had a "speculation tax" to counter this development. In Germany for example you have to pay income tax if you sell shares which you held for less than one year. Of course this isn't a very practical measure anymore because it only affects people who pay taxes within the country (opposed to foreign investors, who

Re:

[timeOday (582209)]

any profits from selling shares is basically tax free, thereby turning a progressive tax system upside-down.

The US is similar. The tax rate on capital gains is on average less than the tax on earned income. The best way to get money is to already be rich.

Re:

[Your.Master (1088569)]

I don't think so, and neither does wikipedia.

http://en.wikipedia.org/wiki/Stock#History [wikipedia.org]

Re:Beholden to short term investors

[marcello_dl (667940)]

> As an individual shareholder I probably would not sue, at least if I'm interested in long-term profit. I personally don't see how Yahoo can generate more wealth if they belong to a company which has managed to gain around 6% market share by investing billions. The logic behind it seems to be very flawed.

I would add that MS would be buying up a competitor, and it's all too common for companies to buy competitors to leave them to wither and then close them down after they sucked up all valuable assets and clients.
As an individual shareholder I'd be primarily worried about that scenario, and I wonder why a fund forgets about it.

I would also add that suing your own company brings bad publicity to it- are they interested in their company well being or what?

Sorry but conspiracy theorists linking such a move to MS pulling strings have the most reasonable scenario here.

Oh by the way, dear real shareholders: the minute you sell to MS I'm canceling my subscription to yahoo. I do not trust MS to do something different with yahoo than what they did to hotmail. Besides, since I am a linux user and hobby dev for OSS software, you'd basically sell my data to the enemy. Double plus ungood.

Re:

[ewrong (1053160)]

But once they have sold their shares to Microsoft, by default, they wouldn't own shares in Yahoo anymore so why would they care what happened next?

Not saying it's right, just that the subsequent success of the deal is an irrelevance to the process of making a quick profit on the stockmarket.

Re:Beholden to short term investors

[ocbwilg (259828)]

As an individual shareholder I probably would not sue, at least if I'm interested in long-term profit. I personally don't see how Yahoo can generate more wealth if they belong to a company which has managed to gain around 6% market share by investing billions. The logic behind it seems to be very flawed.

Yes, the logic is flawed, but it's your logic. It doesn't matter what sort of wealth Yahoo can generate long-term if they are owned by Microsoft because the current Yahoo shareholders will not be shareholders at that point. Basically the logic to the lawsuit goes like this:

Yahoo was trading around $19 a share, with little prospect of going up and a high likelihood that they will continue their slide.
Microsoft offered $31 a share for Yahoo.
Yahoo is unlikely to hit $31 a share in any situation other than a buyout offer.
Yahoo shopped around and played coy to see if they could get a comparable or better offer from anyone else, and they didn't.
Therefore, in order to maximize their investment a Yahoo shareholder should take the $31 offer and run.
After that, Yahoo is a wholly owned subsidiary of Microsoft and the current shareholders own none of it, so how much value Yahoo can generate at that point becomes irrelevant.

Now it's true that since the offer Yahoo's share price has jumped up to around $28 a share. But since Yahoo has done nothing to improve their outlook in the past month it's safe to assume that this jump is due to Microsoft's offer. If Yahoo were to ultimately reject the offer and Microsoft would back down, you'd probably see Yahoo's stock price drop to a level even lower than it was at the time the offer was made as many investors will probably write the company off as a lost cause.

At any rate, it's all proceeding according to plan. Yahoo will ultimately accept the offer, or they will face even more shareholder lawsuits. If they still refuse to sell they will most likely face the replacement of their board of directors with a group who are MS-friendly. As I said here [slashdot.org], it's the shareholders who have the final say on this deal, and they'll say yes.

Re:Beholden to short term investors

[Kohath (38547)]

No. Shareholder lawsuits are not about investors. Shareholder lawsuits are about lawyers.

Shareholder lawsuits are guaranteed to occur any time a company does (or declines to do) any significant action that might affect the price of the stock. They are not an event. They are not newsworthy except as an indication of our broken legal system.

Re:

[griffjon (14945)]

You'd only be rolling around if you sold your shares immediately afterwards. Yahoo's been gaining ground by playing nice with open source and open standards; not something I imagine MS will continue to do. Short term profit? Yes. Long term prospects? Well, I hope you sold your shares for that short-term bump.

Re:

[iphayd (170761)]

you just did.

Re:We need a name for the combined company.

[weierstrass (669421)]

s/people/lawyers/

this might be interesting

[Protonk (599901)]

IANAL.

My take is that shareholder lawsuits are never a given in this country. There is a good possiblity that Yahoo will just show in court that their managerial view of the long view showed greater long term shareholder value in avoiding the merger. there is a good possibility that the suit might be dismissed on face. However, this doesn't always happen. If these investors are large enough, or find other plaintiffs who are, the mere public pressure of the suit could pressure the Yahoo board to do a few possible things:

1. Make a deal with microsoft to put it up to a vote of shareholders.

2. Just go ahead with the deal anyways.

I can't remember the last time a lawsuit like this went through off the top of my head. But I know that the record on them is not completely one-sided. I'll do some digging and be back

Re:this might be interesting

[MistaE (776169)]

Well, IAALS, and I'm pretty damn sure this will not pass muster.

First off, like all corporations, Yahoo is incorporated in Delaware, which is very corporation friendly (hence the proliferation of most companies incorporating there, regardless.

Second of all, courts will normally give the board of directors the initial benefit of the doubt by utilizing something called the Business Judgment Rule (it's on wikipedia), which basically says that the courts will very rarely second-guess the actions of the board providing that the actions taken were 1. In good faith. 2. Done with the minimal care that an ordinary person in the board's shoes would have done and 3. Done with a reasonable belief that it was in the best interest of the company.

In other words, short term investors simply being pissed off for not making money is not a good enough reason to bring this suit passed the initial phase.

Finally I know I'm probably wrong since I didn't get a good grade in business associations, but real law folk feel free to correct if needed.

Re:

[metlin (258108)]

I'm not a lawyer, but I am fairly interested in finance and business, so let me offer my two cents.

If Yahoo can effectively prove that the 62% premium offered by Microsoft undervalues the company, then they are on good ground. And indeed, in the past 52 weeks, they have been over that, so that is in their favor. In fact, right now they are trading fairly high post-Microsoft offer, which is also a good thing for them.

Now, the problem may be with this statement that one of the pension funds made:

"The Yahoo bo

Re:this might be interesting

[OakLEE (91103)]

Regular Business Judgment Rule (BJR) does not apply in hostile takeovers. In these instances the Enhanced Scrutiny Standard [findlaw.com] or Unocal Test applies.

Under this standard the Corporation's Board of directors is presumed self-interested, and must show (1) reasonable grounds for believing the taker over is dangerous to corporate policy and effectiveness, and (2) that their defense against the takeover is reasonable in proportion to the threat posed. Only if these two things are shown will the BJR be applied.

While it is definitely harder to satisfy than the BJR, I still think Yahoo can make some credible arguments to satisfy the Enhanced Scrutiny Standard, especially with respect to how Yahoo would fit within the greater Microsoft corporate structure.

However, what's more interesting is whether Yahoo's comments about wanting a $40 per share price constitutes an attempt by the board to actively sell the corporation. If the that's the case, the Board has effectivley put itself in an situation where it has a duty to get the best price possible for its shareholders and act in good faith with respect to obtaining that price. This the so called Revlon Rule.

Given the available information, it's arguably clear that $40 per share is just a pipe dream, especially since Microsoft is the only bidder. Yahoo's Board, by rejecting Microsoft's offer and countering with an unreasonable offer is arguably acting in bad faith, especially if the $40 offer is just a ploy and not a real negotiating strategy. Given that Yahoo is also attempting to entrench their employees [informationweek.com], their overall course of conduct does not appear to be proper and in the interest of maximizing shareholder value for a company that is essentially putting itself up for auction.

In sum, Yahoo's board is going to argue for enhanced scrutiny to apply, while the plaintiffs will be arguing for Revlon to apply, and both probably have good arguments as to the matter. It'll be interesting to see how the court draws the line on this one.

Re:

[khallow (566160)]

Another thing to keep in mind is that we don't know whether the Microsoft offer is sincere. It's very possible that Microsoft's offer is spurious and was extended only to cause the kind of conflicts that we are seeing. Still poison pills aren't the sort of activity that increase shareholder value, I must agree that Yahoo seems in the wrong here.

Re:

[azrider (918631)]

Given the available information, it's arguably clear that $40 per share is just a pipe dream

According to some news reports, $40 per share was what was on the table when MS tried this last year. If that is the case, this is not a pipe dream or ploy. This is what MS was willing to pay at that time. The board can argue that this is a legitimate counter, without actively courting another suitor.

Since this was not a purchase that Yahoo was looking for, "maximizing shareholder value" requires that they look

Re: IAALS

[by Anonymous Coward]

"I am a lousy speller"

Yew herd I.T. hear forth.

Re:this might be interesting

[richie2000 (159732)]

IAALS.... I am a legal secretary?

"Student" would be a reasonable guess.

Re:this might be interesting

[Protonk (599901)]

No, and here's why. The idea isn't that the price is a problem, although it might be for some investors. They feel that any takeover bid from microsoft might be worth more than their stock is liable to be in the near future. They also feel that there are two possible outcomes for their suit. If it is a threat, Yahoo will cave to the deal and they will get their desired price. If it isn't a threat, the markets will not regard it as such and their stock price will not go down.

But....

I don't think that is the whole story. It isn't an insider affair, IMO. What it might be is a hedge against volatility. The only thing better than knowing if your stock will suddenly increase in value is knowing WHEN your stock will suddenly increase in value. If you can force the issue via legal action (iffy) then you can justify the purchase of more shares on the notion that your lawsuit will result in a much higher share price ue to a buyout. So. Large firm sees buyout rebuffed. Large firm sees a chance to reap known profits via legal action. Large firm sues.

I am not suggesting that these firms bought Yahoo in order to bring this lawsuit. What I am suggesting was that it seemed to be a convenient way around future price fluctuations--not an insider job.

michiganese

[Eil (82413)]

Here in Michigan, we have a term for things like this.

Yahoo just got "Detroited."

Shareholders aren't everything

[91degrees (207121)]

The myth of shareholder primacy [onlineopinion.com.au]

Granted, this is about Australian law, but American law isn't substantially different. Microsoft want to swallow up Yahoo. The company would no longer exist. It's relevant.

If the MS buyout does go through...

[MrCopilot (871878)]

We won't be seeing these types of stories at Yahoo news anymore.

Here is a MicroHoo related stories box at MSNBC @ http://www.msnbc.msn.com/id/23237868/ [msn.com]

Microsoft: Yahoo would stay in Silicon Valley
Microsoft bid 'unnerving' to Google co-founder
Analysis: Microsoft will win proxy battle
Microsoft to authorize Yahoo proxy battle
Gates: Microsoft's offer to Yahoo is fair
Yahoo's big investors may back Microsoft
Yahoo's CEO explains Microsoft rebuttal
Newsweek: Why this deal won't happen
Why Google will remain king of search
Vote: Can Microsoft-Yahoo beat Google?

Guess which link doesn't work?
Newsweek: Why this deal won't happen

Page not found Our web servers cannot find the page or file you asked for. The link you followed may be broken or expired.

http://www.newsweek.com/id/110796 [newsweek.com] Nope not expired, guess it was just misplaced.

Oddly enough this link works fine Why Google will remain king of search [msn.com] I guess it was left to show that there are no antitrust issues.

On the story itself
The company also adopted new severance packages that would protect employees in the event of a Microsoft takeover, a move the lawsuit labels as a blatant effort to drive up the cost of an acquisition.

It couldn't be an attempt to protect their employees, nah what does that have to do with profits?

The company said in a Securities and Exchange Commission filing Tuesday that workers who lose their jobs without "cause" or quit "for good reason," as Yahoo defines it, would continue to receive their salary and medical benefits for four to 24 months, plus reimbursement for "outplacement services" for two years. A Yahoo spokeswoman would not say what might constitute good reason.

I dunno, how about: I was purchased by a soul crushing monopolist.

Yahoo would vanish

[gilesjuk (604902)]

Yahoo would cease to be, everything would be rebranded Microsoft and much of the Yahoo staff would be laid off. Is it any wonder Yahoo would resist this? not to mention losing competitive edge by having to do everything the Microsoft way and avoiding open source.

not really news

[superwiz (655733)]

Everyone here doing what they are supposed to. This lawsuit (and its kind) were expected as soon as yahoo rejected the offer. But the pension plan is doing what they are supposed to as well. When someone offers them $10 for a $6 property, they are supposed to take it. Otherwise, they wouldn't be fulfilling their obligationgs to the pensioneers. The lawsuit will fail if the judge understands that the fact that Yahoo traded at a certain price, doesn't mean that it can be purchased in large amounts at that price. But so far, this is hardly newsworthy.

I agree!

[Vexorian (959249)]

1. Yahoo stockholders sue yahoo.
2. Microsoft buys yahoo stocks.
3. Yahoo stock goes up.
4. Desperate stockholders sell
5. Yahoo stock plummets.
6. Microsoft loses millions in stocks.
7. ????
8. Profit!

Re:Wow

[Protonk (599901)]

Everyone is greedy, by and large. Get over it. Most of us are. In the long run, both sides are about greed. Yahoo is (presumably) makign the argument that shareholder value will be hurt by the merger and these guys are making the value that it will be hurt by avoiding the takeover. Both sides are greedy, fundamentally.

the managers may feel that they want to take Yahoo in a certain direction not dictated by microsoft, and that is all well and good, but it sounds less noble when you realize that the money they are using to do that is not theirs. It is the money of the tens of thousands of investors in their company that has allowed them to do this. No one is a hero here.

Re:Wow

[skogs (628589)]

There is no retirement fund in the world that should be invested in Yahoo. Retirement people...when you are nearing retirement age you want to have little to no risk. Nobody will be losing any money in their golden years because of this except the idiots that put the money there in the first place.

This is more likely a long term outlook 'retirement fund'...a pair of funds that right now are in their 'high risk' or 'moderate risk' spans of time. The folks putting in to these funds right now should be in their 20's to 40's. A small hiccup now is not going to be a major factor 30+ years from now...these idiots are just trying to sue their mistakes away because they've already made too many poor investments.

Re:

[OakLEE (91103)]

There is no retirement fund in the world that should be invested in Yahoo.

Pension funds have lots of constituents at differing points in their life. They have to pay out money to pensioners who have already retired, and they have to make sure there is enough money to pay out those people who will be retiring 5, 10 or 20 years from now. Thus they do have to worry about growing their funds size, which makes growth companies like Yahoo worthwhile investments. While I agree with you that Yahoo itself is a r

Re:

[timmarhy (659436)]

you mean the fund managers. unfortunately nothing will happen to them it's people retirments that will be hurt and these assholes will roll off into the sunset in their porsches, laughing.

Re:

[Protonk (599901)]

It seems stupid and ignorant to me that people who don't understand something can see fit to pass judgment on it. SO what exactly qualifies you to make this blanket pronouncement that gambling is the same thing as investing in the stock market? It it your feeling that the absence of a sure thing equals 100% risk? that is what it sounds like.

sure. Markets fluctuate. Countries default on debt. Banks fail. shit happens. When you invest in ANY investment it is always prudent to look at the kind of risk

Re:

[erroneus (253617)]

There's only one word that has to be applied that blows your whole response away:

Risk.

You said it and you likely know what it means. *Any* amount of risk is a gamble.

Bonds, on the other hand are much less of a risk and are a contract to repay. Municipal bonds are good. I do appreciate what the intent of investment strategies are, but at the end of the day, the core of it is risk. Even if one in ten thousand risks taken goes bad, it's still risk. I just don't see how people can fail to wrap their heads

Re:Wow

[Volante3192 (953645)]

Stocks are not guarenteed investments. People invest in it because they believe the price will go up, but have no recourse if it doesn't.

Those poor schmucks that dove into Blackstone at $40/share when it went public probably wish they could sue now that it's down to $15. (Yea, it "opened" at $34 but not to the general public. When the market opened to the public, it bolted up to $40, been going down ever since.)

This is why stocks are risky investments. They're not guarenteed and not insured. You can lose money. If you want a sure thing, invest in Treasury Bonds.

Re:

[Protonk (599901)]

Are you a treasury bond trader? Who qualified you to make all of these remarks? Stocks are perfectly reasonable investments if you understand what your willingness to accept risk is and if you diversify your holdings. If you want safe, don't even get treasury bonds, I hear some checking accounts give interest now.

Treasury bonds offer a rate of return that is on average much, much lower than the stock market or even the corporate bond market. That is partially because they are lower risk investments. th

Re:

[turing_m (1030530)]

"This is why stocks are risky investments. They're not guarenteed and not insured. You can lose money. If you want a sure thing, invest in Treasury Bonds."

You can lose money in bonds too, even treasury ones. If whoever is in charge of printing money decides to print a lot more of it after you buy the bond, your future buying power is diluted and so the trading price of the bond can go down significantly, especially with long term bonds.

Re:

[Volante3192 (953645)]

Stocks are a gamble. Period. You agree to contracts that explicitly state this when you start playing the market. You have no guarenteed return on your investment. You could very well lose it all and anyone with stocks Should Know This.

If you want a sure thing, get a Treasury Bond and STFU.

Re:wait a minute?

[Protonk (599901)]

FFS.

Gambling doesn't require a house but most of the games we think of do. The reason people aren't usually out there making money on the craps circuit isn't because of the ups and downs. It is because the odds in craps are DESIGNED so that you will never win, on average. The expected value of one dollar played on a craps table over the long run is about 92 cents. In the end, you are losing money. On the contrary, there are games of chance that people do make a living on. Very famously, people have made a living on poker. In this case, the house takes a cut, but it doesn't impact the odds of winning or make it so that the expected value of a dollar in over the long run is less than a dollar out.

I will continue to say that it is ignorant of you to compare gambling to equity finance. Do you understand what portfolio diversification is? It is almost PRECISELY investing in the average stock in order to limit damage to the portfolio due to volatility. You find two investments (or more, really) that will respond differently to a single market change, and you invest a little in both. the ma expected return is lowered, but the variance is lowered even more. It's a fundamental tenet of smart finance and it is nothing like gambling at all.

Are there nonzero risks in the stock market? Sure. If you want to define gambling as taking risks beyond your control with your money than treasury bills are gambling. You said before that the US has never defaulted on its explicit debt and you are correct, but the risk is still there. If you want a risk free investment strategy, take your money and put it in a checking account. It is protected by the FDIC, some even offer a small rate of return, and there is no risk. Of course, you will barely beat inflation and you will forgo 100,000's of dollars worth in lost compounded interest, but it's your money.

Hardly just a childish rivalry

[weston (16146)]

To have someone deny me that chance based on a childish rivalry would really upset me.

There's *so* much more going on here than that.

The most important thing is that Microsoft would destroy the company as it's known now. They'll mess with the back-end technology, swapping in their own, they'll merge some stuff with Windows Live and vice versa, they'll kill anything that's a threat to their desktop hold or they'll limit its prime interoperability to Microsoft products. Features will become dependent on IE and Silverlight.

In short, its goals will go from being a premiere portal and online services company to being anything that can maintain and enhance Microsoft's dominance. Lots of people who work there would rather work for the former than the later (and it *will* hemorrhage key employees if they're bought for that reason). And some of them even have a damn good argument that the company is worth more long term if it serves the former goal. It's not unlikely they'll achieve it, and especially as the desktop becomes less and less relevant, I think they have the potential to outdo Microsoft in terms of their worth.

Short term, of course, you can get quite a good cash-out on the offer MS made... especially compared to anything else available while the markets in general are struggling. And lots of suits and shareholders don't know how to think any other way than short-term gains.

Re:Hardly just a childish rivalry

[OakLEE (91103)]

Yahoo's brand name is probably second only to Google on the internet, and if they would properly make use of it, they could probably top Microsoft in market cap. However, that said, Jerry Yang, and the last two CEOs have done a shit poor job of running the company, and Yahoo will not realize its full potential as long as Yang and the rest of the old Yahoo vanguard control the board. The company gets many more page views than Google, and has a larger registered user base, yet Google has been much more successful in on both the technical and business fronts.

Yahoo, as evidenced by the chronic underperformance (they can't even consistently meet their OWN guidance, let alone Wall Street's), is not a well run company and certainly is not living up to its potential. While I'm not convinced Microsoft can fix what's wrong with Yahoo and certainly not convinced it wants to buy Yahoo for only that purpose, I am convinced that the board and management have no clue what they are doing, and clearly at the very least is ambivalent toward their shareholders. I'd go so far as to venture that Yahoo's board has contempt for them. If Yahoo does remain independent, it wouldn't surprise me to see a revolt against the board at the next shareholders meeting.

Re:

[Your.Master (1088569)]

I don't know which of your many posts making the same point to respond to.

"the stock market is simply legalized gambling"

False. The stock market is very *complicated* legalized gambling; there's not much simple about it. And it's only gambling in the same sense as every purchase is. EVERY purchase. Even a bag of chips from the grocery store. It's just got a different risk/reward profile.

The board of directors is chosen to represent the interests of the shareholders. Failure to represent the shareholde

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[Protonk (599901)]

The stock market isn't legalized gambling FFS. god damn it. why do people keep modding this insightful. just because it doesn't always go up and just because you don't understand it doesn't make it gambling. You want some stock market investments that you won't ever go bankrupt on? Go find large companies with Aaa/AAA bond ratings and buy their stock. Then sit on it for a while. Don't sell when it drops. Just hand on to it. You'll see a growth rate a little below the market on average.

You want a re

Yeah, like Bungie

[Tanman (90298)]

I hear they are doing horribly.

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[Xuranova (160813)]

Something is only worth what people are willing to pay for it. The stock price got the way it was because thats what people wanted to pay for it.