Microsoft Bids $44.6 Billion For Yahoo 784
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.
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:Very odd (Score:4, Informative)
Re:Implications for open source (Score:5, Informative)
Re:Implications for open source (Score:4, Informative)
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.
Re:Is Yahoo the #1 destination? (Score:3, Informative)
Re:And then there were two (Score:3, Informative)
On purpose?
Yes and yes, considering it's the default on all Windows boxes. To regular people, a search box==a search box.
Re:Very odd (Score:3, Informative)
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.
Re:Very odd (Score:2, Informative)
I use MSN because I recognise it as such and I use M$ for the same reason for me MS will always be http://www.msaustralia.org.au/ [msaustralia.org.au] so just finally get over it already. You sound like some uptight, lame, sociopath, marketdroid, really the mom's basement stuff is so old and pathetic try something a little more creative fro a change. As for giving it up M$ over M$'s dead and rotting carcass.
As for any points I make, wake up to yourself, I am here for fun, not because I am some lame arse loser getting paid to post.