Microsoft Bids $44.6 Billion For Yahoo
Posted by
kdawson
on Fri Feb 01, 2008 09:01 AM
from the big-deal dept.
from the big-deal dept.
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.
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Yahoo May Re-Consider Google Alliance, Rebuff Microsoft 273 comments
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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News: Carl Icahn Takes on Yahoo's Board 279 comments
narramissic and several others have written to point out that Carl Icahn has initiated a proxy battle with Yahoo's board of directors over their rejection of Microsoft's bid for the company in February. Icahn has purchased millions of Yahoo shares over the past week and assembled a group of nine other investors (including Mark Cuban) to persuade the board to resume talks with Microsoft. Yahoo remains unimpressed. Icahn's letter to Yahoo accuses:
"It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet."
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Microsoft Offered $40 a Share For Yahoo 306 comments
fistfullast33l writes "Bloomberg is reporting that a recently unsealed court case by shareholders against Yahoo reveals that Microsoft offered $40 a share for the Internet search company in January 2007 and Yahoo turned it down. We've extensively discussed Microsoft's bid for Yahoo earlier this year for $33 a share, which was rebuffed. Investor Carl Icahn has launched a proxy fight against Yahoo over the spurning of the Microsoft deal." CWmike notes Computerworld's coverage of the revelations: "The complaint places much of the blame on [Yahoo CEO Jerry] Yang, describing him as someone with a 'well-known' antipathy toward Microsoft who acted out of a personal interest to keep Yahoo independent. Something wrong with that? Oh, yeah... public company."
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Very odd (Score:5, Insightful)
Re:Very odd (Score:5, Insightful)
In fact just like about everything MS has ever done (eg SQL, IE, PowerPoint
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Re:Very odd (Score:5, Insightful)
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Fate of Flickr? (Score:5, Interesting)
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Re:Fate of Flickr? (Score:5, Insightful)
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Re:Fate of Flickr? (Score:5, Funny)
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Re:Fate of Flickr? (Score:5, Funny)
The real key would be to make it IE 7 only. That way people would only experience Flickr with a top notch browser, thus enhancing the Flickr brand!
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Re:Very odd (Score:5, Insightful)
In fact just like about everything MS has ever done (eg SQL, IE, PowerPoint
I checked Live.com the day it was announced. When it bitched about not using IE (when I tried to login my passport account) , I never visited it back. That is what makes every MS attempt unsuccessful. They can't live with the fact that there is a thing called HTML standard, TCPIP standard and Internet is platform neutral from beginning. They use every opportunity to alienate other OS/Browser users.
I could never see Yahoo as a great search engine although it seems spammers/blackhats/SEO junk targets them less. For the record, Google has always been a spammer heaven for me too.
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Re:Very odd (Score:5, Funny)
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Re:Very odd (Score:5, Funny)
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Re:Very odd (Score:5, Insightful)
For the most part, yes, but the yahoo IM client differs significantly in capability and support from platform to platform.
If ms does get yahoo, they may find that their desktop monopoly won't help them leverage crap as it has for all the other products they've bought and downgraded. The Internet is turf foreign to their business model and corporate mindset, and buying yahoo won't change that. As if anything could. If this deal goes through, yahoo goes down.
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Re:Very odd (Score:5, Insightful)
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And then there were two (Score:5, Insightful)
Maybe, but the possibility of there only being two [hitwise.com] main search engines out there, with the next largest competitor Ask.com at a paltry 4.1%, is fairly scary.
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Re:And then there were two (Score:5, Funny)
This is when I will be impressed...
http://pics.nerdnirvana.org/d/1406-1/myhouse_google_com.jpg [nerdnirvana.org]
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Re:Very odd (Score:5, Insightful)
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Re:Very odd (Score:5, Insightful)
Seems so unlikely to ever be allowed by the regulators, yet they're willing to throw billions at it anyway. They must feel confident for some reason.
If they allowed Google and Doubleclick, they'll probably allow this too. This doesn't give anyone a monopoly or anything close to it, since Google's still #1 in search.
The question is, how long until MS feels compelled to screw up Yahoo like Hotmail?
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Re:Very odd (Score:5, Interesting)
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Re:Very odd (Score:5, Insightful)
You can bet yahoo would go the same way, migrating to windows, spending a ridiculous amount on new hardware and suffering significant problems in the process.
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Re:Very odd (Score:4, Insightful)
Maybe I'm stuck in the past, but I can't shake the feeling that MS is more interested in narrowing the competitive field than in acquiring Yahoo properties -- though search is something they could use Yahoo's help with.
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Love vs. Hate (Score:5, Interesting)
Yahoo News itself is reporting this as a hostile takeover [yahoo.com], but seemingly with Microsoft willing to pay such a large premium, one that will be hard to resist. It's interesting that Microsoft is willing to use up almost all of it's cash reserves for this takeover, largely sacrificing it's flexibility to make strategic investments in the future. But from the perspective of Yahoo! users the more important question is whether a MS takeover will turn Yahoo! into tepid porridge? And will the long, slow decline of Microsoft now drag Yahoo! down too?
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Re:Very odd (Score:4, Informative)
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I'm confused... (Score:5, Insightful)
The Sony rootkit debacle began in October 2005. The PS3 was released in November 2006. How, exactly, did these two events coincide?
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Re:Very odd (Score:5, Funny)
You've used Excel too?
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Re:Very odd (Score:5, Insightful)
The fact of the matter is, Google started out with the cards stacked against them - miniscule funding, hard drive arrays built from lego, the inability to modify their own consumer operating system monopoly to point their bundled internet browser at their own search engines/portals - and yet within a few short years google was a household name, and is now the de facto synonym for "looking something up on the internet". It's the kind of success that Ballmer can only dream of - a vastly better product than anything else that was out at the time (fast and lean, IIRC an alien concept in search engines at the time), in the right place at the right moment to catch the new "internet boom" that MS had famously underestimated. If I was the CEO of (supposedly) the worlds' leading technology firm, such upstart behaviour would piss me off too.
As it is, I suspect the deal will be approved (the shareholders will love it and I can't see the ineffectual monpoly police battin gan eyelid over this "because MS isn't a monopoly on the internet") but I don't think it's going to do MS much good in the long run. Yet another brand run into the ground.
* Yes, I'm aware that the Y! purchase would net many other gains (such as the oft-mentioned decrease in FOSS contributions from Y!), but mindshare and search hits seem to be the biggest factor here.
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Re:Pot, kettle, very black. (Score:5, Funny)
The only problem is that M$ actually makes money on OpenSource software and services, and it's founder is a bald and well shaved Robert Stalman, AKA M$ Bob.
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Implications for open source (Score:5, Interesting)
Re:Implications for open source (Score:5, Informative)
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Re:Implications for open source (Score:5, Informative)
Anyone who has deployed Zimbra knows that if you want the product to actually be useful you have to buy the closed-source "Network Edition." This is precisely what Microsoft would shut down. Microsoft is eager to kill Exchange competitors. They've done it before -- look at how they immediately shut down the now-defunct Hula project once they began pulling the strings at Novell.
If you want open source email and groupware, you should deploy open source email and groupware. The prime contender in this space right now is Citadel [citadel.org], which is 100 percent GPL. End to end. No exceptions, no tiers, no strings, no gimmicks. Similar in spirit to the Ubuntu Linux distribution, the project's very best work is made available to everyone on the same terms.
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Re:Implications for open source (Score:4, Funny)
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Re:Implications for open source (Score:5, Interesting)
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Re:Implications for open source (Score:4, Informative)
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Microsoft is "innovating" again... (Score:5, Funny)
Judging by this blurb, I think the answer is going to be a big, fat yes.
Pirate Bay (Score:5, Funny)
Letter from Ballmer to Yahoo! Board (Score:5, Informative)
January 31, 2008
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer
Dear Members of the Board:
I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft's closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.
Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.
We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!'s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft's share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.
Microsoft's consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.
In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that "now is not the right time from the perspective of our shareholders to enter into discus
Re:Letter from Ballmer to Yahoo! Board (Score:5, Funny)
Eliminating unnecessary, extraneous keystrokes on a corporate scale represents a compelling efficiency realization event for your shareholders.
So there.
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Re:Letter from Ballmer to Yahoo! Board (Score:5, Insightful)
1) Microsoft is indicating that they are challenging Google "Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. ". However, This statement should apply to Microsoft. Microsoft is the 800lb gorilla yet they are making it sound like they are a bit player and Google is the gorilla - more management doublespeak.
2) Microsoft is indicating they would replace all non-Microsoft at Yahoo with Microsoft technology with phrases like "combination enables synergies related to scale economics". This is great market speak for lay off all that oppose the Microsoft initiatives and move to a common, Microsoft-centric platform.
3) Microsoft wants their search as, I guess, MSN has not been effective: "single search index".
4) Phrases like "eliminating redundant infrastructure and duplicative operating costs" are management speak for layoffs, firing middle management at Yahoo, moving to Microsoft's management and benefit structure, and similar. In my experience through many corporate buyouts, all are very negative to the employees at the company being purchases - Yahoo. However, Microsoft attempts to temper this with "offer significant retention packages to your engineers, key leaders and employees", which is more corporate double-speak.
5) The "exceptional display and search advertising capabilities" sounds like a tighter integration with Microsoft's technology, i.e., Windows and MSIE. Maybe they want to have tighter integration between Vista and their ad revenue stream. Could "new advertising platform capabilities" indicate ad-supported Vista (get a free ad when you log in, when you fire up Office, etc.)?
Overall, it sounds like Microsoft is saying that Yahoo should sell to them because Yahoo didn't meet their goals, the combined company can better challenge Google, and Yahoo has tech that Microsoft needs.
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So This Means... (Score:5, Insightful)
Theoretically Microsoft could buy up anything good about the internet so we can all shut our computers down and settle in w/a trip to the library and a good book.
Priceless quote. (Score:5, Funny)
The only thing that matters: EMAIL (Score:5, Interesting)
Interesting that - imagine building a business using online apps, only to have your supplier go under and get bought out in some botched effort, and then lose history...
I think there are a number of serious implications in this MS/Yahoo deal. The monopoly aspect is actually the least problematic: the loss of history is a greater problem.
But then, maybe the Feds under a Democratic Admin will say "nuh uh!" and kill the deal...
RS
The Empire Strikes Back (Score:5, Insightful)
It was only a matter of time before Microsoft decided to try to get a final regulatory pass from the Bush administration before the inauguration of a less-sympathetic President in 2009.
This deal makes a lot of sense for Microsoft (sort of - I'm assuming Yahoo!'s ad business really is worth the cash), but I can't see how this is at all good for Yahoo! or the marketplace at large.
Is the plan to re-brand everything as Microsoft Live! (keeping the exclamation mark) - thus destroying pretty much the only thing Yahoo! has going for it - brand recognition?
I would be very sad to see Yahoo! and their odd collection of services get subsumed and destroyed in a merger with Microsoft. Yes, I'm assuming much of Yahoo!'s tech portfolio would be wiped away or left to die - this wouldn't be the sort of merger Adobe engineered with Macromedia by a long shot.
flickr (Score:5, Insightful)
Microsoft's monopoly money... (Score:4, Insightful)
Microsoft is looking to put google out of business.
I contacted the FTC to complain (Score:5, Interesting)
I know about the other solutions, but none are as feature complete IMHO as Zimbra. Two words: Blackberry integration.
I for one... (Score:5, Funny)
Hmmm..... (Score:5, Funny)
http://www.thestar.com/Business/article/299523 [thestar.com]
Ballmer makes this comment:
" Signalling Microsoft doesn't intend to take no for an answer, Ballmer wrote that the company "reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal.""
My question is how many chairs does that involve?
This is bad on many levels (Score:5, Interesting)
That makes the game Microsoft vs Google.
Now, can Microsoft really take on Yahoo without destroying it? Will it be like when Compaq bought DEC? Or will it work? Yahoo is all FreeBSD, the engineers there HATE and laugh at Microsoft and its products. I know for a fact that moral will sink and people will leave Yahoo.
There is something different going on here. FAST, Fast Search and Transfer, previous owners of www.alltheweb.com, a search engine competitor to google in the late 1990s split from its search engine business which it sold to overture, which was bought by Yahoo. Microsoft is currently in the process of buying FAST, and next on the agenda is Yahoo. Bringing back together, the two halves of the old company.
It may be a coincidence, but it is curious. Why would Microsoft buy technology that it arguably already has or could build cheaper? What is it they are out to get? Are there patents or other "intellectual property" owned collectively by the two parts of FAST that they can use to sue Google?
Also, Yahoo is a HUGE open source user/contributor. A purchase by Microsoft will almost certainly reduce the number and amount of contribution to the open source environment.
Lastlt, isn't this *exactly* what the Sherman act was designed to prevent?
Re:Zimbra (Score:4, Funny)
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Re:Is this innovation? (Score:4, Informative)
I try and mix it up, I still use Google a lot but unless they find a way to get people to stop gaming the system, I think Google will have some problems. Seeing pages filled with banner ads in your first ten results for an engineering or computer science topic is disheartening.
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Re:nice to see (Score:5, Insightful)
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Re:nice to see (Score:5, Interesting)
The amount of Internet penetration here is very very less, apart from Hyderabad. Google is so popular that it is part of our songs [Like Bollywood, which are Hindi films, we have our own industry of sorts with Telugu films and yes they all have songs].
When a movie song has Google in it, it is because the average movie-goer knows what it is.
Google has become a part of our language. The same with some other regional languages include the National language Hindi.
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