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Yahoo May Re-Consider Google Alliance, Rebuff Microsoft 273

Posted by Zonk
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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Yahoo May Re-Consider Google Alliance, Rebuff Microsoft

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  • by _merlin (160982) on Sunday February 03, 2008 @11:37PM (#22287198) Homepage Journal
    Do I like Yahoo? Not really. But I don't really like Google or MS either. The less of these online service providers there are, the worse it will be for consumers. I hope Yahoo continues to exist in some form or another just so there are more players in the marketplace. That means more choice, more competition and a better experience for users.
    • Are there specific reasons to not like Google?
      • Re: (Score:2, Insightful)

        by milsoRgen (1016505)
        Well yes, there's already a reason to dislike the dominant player in any given field. People root for the under dogs you know?
  • undervalues? (Score:2, Insightful)

    by larry bagina (561269)
    Last I checked, $31 is greater than $12.
    • Re:undervalues? (Score:4, Insightful)

      by _merlin (160982) on Sunday February 03, 2008 @11:39PM (#22287214) Homepage Journal
      Well, they obviously don't believe the share price represents the value of the company. No-one accepts a takeover at the current market price for shares. But think about it this way: suppose you had shares in Yahoo: you could take $31 for them now, or hold on to them so you can profit from shareholder dividends, and possibly sell them for much more later, too.
      • Re: (Score:2, Insightful)

        by Vvaghel1 (1008177)
        first of all, stock prices are a measure of a company's future profitability, or i should say expected profitability. Second of all, measuring expected future profitability is a judgement call, not an exact science i'm not surprised, i figured this was somewhat the case when i heard the story
      • Re:undervalues? (Score:5, Insightful)

        by Joe Decker (3806) on Monday February 04, 2008 @12:02AM (#22287372) Homepage
        Well, they obviously don't believe the share price represents the value of the company.

        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 ... or honesty ... or something ... disturbing.
      • Re: (Score:2, Informative)

        by larry bagina (561269)
        Microsoft offered $31/share for a stock that was trading at $18 (not $12, my bad)/share. With the recent layoffs, declining profit, being bought looks pretty good.
        • Microsoft offered $31/share for a stock that was trading at $18 (not $12, my bad)/share. With the recent layoffs, declining profit, being bought looks pretty good.

          However financial analysts have valued Yahoo! at $38 or $39 a share. If so MS's $31 is undervaluing the stock.

          Falcon
  • Crunch is coming, and Yahoo is going under one way or another. The current tack to Google is only to squeeze out a little more cash from the deal.

    Google don't want 'em, what exactly would they be acquiring? Whereas, depending on the attendant levels of asshattery involved, MS/Yahoo could be better than a disaster.
    • by Vellmont (569020)

      Crunch is coming, and Yahoo is going under one way or another.

      Why? I don't find Yahoo useful, but I also don't find MTV useful either. Is Yahoo losing money, or losing business? They don't have the cachet of Google of course, but they're a more established portal site.

      Not being "the next big thing" doesn't mean death. Yahoo has a MUCH better position than say Facebook, or MySpace, who could be gone tomorrow, and no one would really care.
    • Re:microyahoogle (Score:5, Insightful)

      by Penguinisto (415985) on Monday February 04, 2008 @12:34AM (#22287520) Journal
      At first blush, your post is plausible... but I wouldn't be so certain ab't Yahoo's future prospects. This is the same company that managed to survive the dot-bust in spite of really not being supposed to.

      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.

      /P

      * 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.

      • and 2) is relatively uncluttered and straightforward when compared to MSN.

        Check out Live.com [live.com], Microsoft's new search engine.

        Yahoo is actually IMHO better than Google in a lot of areas

        Except as a portal and the Yahoo! Groups, I'm a member of some groups, I think Yahoo! isn't as good as Google. Of course I don't know about Gmail. But for search and as a directory I think Google is better.

        Falcon
    • Crunch is coming, and Yahoo is going under one way or another. The current tack to Google is only to squeeze out a little more cash from the deal.

      Google don't want 'em, what exactly would they be acquiring?

      Well considering Yahoo! was one of Google's Angel investors [wikipedia.org] before the Google IPO, there ma be a good reason for Google to help Yahoo!

      Falcon
    • by Kamokazi (1080091)
      Yahoo is still fairly dominant in many Asian markets...and there are a lot of people in those markets. A lot of people are getting internet access there that never had it before, it's going to grow substantially over the next five years, unlike the US and European markets. Google could use Yahoo just as much as Microsoft.
    • The exact same thing that Microsoft would be acquiring. Granted it would be more of a benefit to Microsoft than to Google at this stage in the game, but who wouldn't want the #1 Website ranked in the world? [alexa.com]. MSN had the position for the first half of 2007, but now they're crashing hard, and they never could beat out yahoo in the five years before that. Now the question is this: Which would you rather see, MSN fall further from the #5 slot, or Microsoft acquire Yahoo and be in control of the current #1 pos

  • by EmbeddedJanitor (597831) on Sunday February 03, 2008 @11:40PM (#22287222)
    Google has 4 times the search hits of yahoo and is growing. Why spend 45bn on a sinking enemy? Just wait a year or two and yahoo will be no more anyway. MS + yahoo are individually sinking in the service space and together they'll just sink faster. Sure Google must make some anti-trust grumblings, but in reality they must love the sight of their worst competitors sinking eachother.

    Google can use the 45bn in far better ways by cutting into new markets & technologies (eg. Android).

    • by ScrewMaster (602015) on Sunday February 03, 2008 @11:47PM (#22287282)
      The interesting thing is going to be whether Google successfully monetizes technological forays outside their core competence. Microsoft has been trying for decades to come up with a major moneymaker other than the Windows/Office duo and has largely failed.
      • by EmbeddedJanitor (597831) on Sunday February 03, 2008 @11:57PM (#22287344)
        Android is not really a seperate venture. It mainly facilitates extending their core business into mobile space so that your whole Google existance can fit in your pocket meaning more searches and uses of Google services --> more Google business.

        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).

        • That's one of the reason why Google has been so successful. Instead of saying "Let's make an mp3 player now that the market is owned by our competitor" or some such, they asked themselves the logical progression of their current service. They made life easier, better, and more convenient for their users. They slowly expanded while never stepping, but always pushing, out of their comfort zone.
        • by jo42 (227475)
          Google's core revenue generating business is not search, nor email, nor online apps, it is advertising. Google uses the revenue from advertising to give away all the other services - this is truly evil because it makes it impossible to compete with them. If Google's advertising revenue dried up, absolutely everything would blow away in the dust.
        • by DerekLyons (302214) <fairwater@gmail. c o m> on Monday February 04, 2008 @05:10AM (#22288898) Homepage

          Android is not really a seperate venture. It mainly facilitates extending their core business into mobile space so that your whole Google existance can fit in your pocket meaning more searches and uses of Google services --> more Google business.

          Google doesn't want you to use more Google services. They want you to see more Google served advertising.
    • by Amorymeltzer (1213818) on Sunday February 03, 2008 @11:55PM (#22287334)
      Yahoo is ANYTHING but sinking. Yahoo.com is still the number one most visited site on the web (check alexa [alexa.com]). Now, Google happens to be number two, followed by youtube. Who in their right mind wouldn't want the top three websites? I'D shell out $45B if I had it.

      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.
      • Check your stats (Score:5, Informative)

        by EmbeddedJanitor (597831) on Monday February 04, 2008 @12:08AM (#22287406)
        http://www.alexa.com/data/details/traffic_details/yahoo.com [alexa.com]

        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).

        • Re:Check your stats (Score:5, Interesting)

          by Amorymeltzer (1213818) on Monday February 04, 2008 @12:41AM (#22287550)
          Ambiguous graph aside, alexa still ranks yahoo.com number one. Over the past three months, yahoo beats google by 0.5% of the internet population. Digging through the info pages on both, Yahoo has twice the page views for each individual user. Putting together equivalent users with twice the page views is probably why Yahoo is ranked number 1 and Google number 2 over the past three months (1 and 4 for a week and 42 and 53 for yesterday). As far as my math goes, it seems that an ad on Yahoo would get seen on average twice more than one on Google.

          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)
          • Re: (Score:3, Insightful)

            by Lehk228 (705449)
            remember, those numbers are not "of the internet population" it's "of the internet population infected with alexa toolbar"

            and the more savvy uninfected users are more likely to do serious business over the internet.
          • by WindBourne (631190) on Monday February 04, 2008 @02:17AM (#22288094) Journal
            Argue all you want over who has what, but what you had AND have does not compare to what you can have. The reason that I say that is that Yahoo does not make it worth a techies time to either stay there OR come to them. Yahoo treats their techies like a bunch of well, yahoos. Very little incentives to stay there. In fact, they have treated their sales ppl like Gods, and yet these are the bozos who will leave a company at the first wind.
            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.
          • Errr (Score:3, Insightful)

            Nobody goes to Google to view pages. When Google is working really well, you find what you're looking for on the first page of hits and you get redirected else elsewhere. That's a big thing about Google is that its value piggy-backs on other sites and thus its value and usage don't get well represented by traffic and hits. Most people's perception of info is "I read it on Google" or "I found it on Google", when Google actually just handled the first order search and they found the info they were looking for
          • Re: (Score:3, Interesting)

            by Jugalator (259273)

            Ambiguous graph aside, alexa still ranks yahoo.com number one.

            Alexa is IMHO a stupid measurement of popularity.

            It's not a measurement of the Internet population at large; it's a measurement of who installs the Alexa Toolbar. I don't know even one person who I have seen it had installed. The demography Alexa measures is most likely the most clueless of clueless users, since there's nothing even in it for you if you use it, just for Alexa. Not exactly geek material, or even an adequately seasoned online user.

            Since the demography is likely skewed and since it's becoming

      • by OakLEE (91103)
        Yahoo's clicks and page view may be high, but unlike Google they have failed to turn that into corresponding ad revenue, which significantly hampers their top and bottom line. In that sense they are not sinking so much as slowly falling behind Google. I'd analogize it to the Detroit Automakers versus the Japanese ones back in the late 1970s and early 1980s. They weren't doing bad, but they were not doing enough to maintain their lead over the Japanese. The automakers did that out of shear arrogance, and
      • I've seen how most of those "hits" happen.

        A user opens their browser and says "damn, why does that page always come up?" before navigating away from it.

      • by HisMother (413313)
        > Yahoo.com is still the number one most visited site on the web (check alexa [alexa.com]) Alexa only tells you the ranking among [i]asshats who install the Alexa toolbar.[/i] For this reasosn, their numbers aren't worth the electrons they're printed on.
    • Yahoo Mail has many more users than Gmail, and tends to have a more mass-market (less techie) demographic, especially if you consider Yahoo Groups sort of related. Yahoo Messenger is of course orders of magnitude more popular than Google Talk.
    • Google has 4 times the search hits of yahoo and is growing. Why spend 45bn on a sinking enemy?

      Probably the huge number of users that Yahoo! has that Google doesn't. Yahoo! isn't a search company, and hasn't been for years - they are a portal, pretty much the only one to thrive. (And they are far from sinking.) Google isn't a search company, they are an ad agency.
       
      You do the math.
  • some other company (Score:5, Interesting)

    by FudRucker (866063) on Sunday February 03, 2008 @11:45PM (#22287262)
    too bad TimeWarner or CNN or some other big media company could not bail yahoo out, i rather see something like that than for microsoft getting their dirty paws on them...
    • by OakLEE (91103) on Monday February 04, 2008 @12:46AM (#22287570)
      Oh you mean like this [cnn.com]? Yah I think we've seen that one played out before and it didn't end well for the big media company. And just remember, AOL merged at its peak, Yahoo has clearly seen better days.
    • too bad TimeWarner or CNN or some other big media company could not bail yahoo out, i rather see something like that than for microsoft getting their dirty paws on them...

      CNN is owned by TimeWarner.
  • by urbanriot (924981) on Sunday February 03, 2008 @11:46PM (#22287266)
    Yahoo thinks they're worth more than $44.6 billion? What exactly does yahoo do, or own, that makes money?
    • by protohiro1 (590732) on Monday February 04, 2008 @12:00AM (#22287364) Homepage Journal
      500 million users. $3.75 billion a year in profit. Market cap of $40 billion.
      • by timmarhy (659436) on Monday February 04, 2008 @12:11AM (#22287416)
        i have to wonder about figures like that. 500 million users might be every account ever created, i bet there's 1/50 of those that are active.

        i have a sneaking suspicion there is another smaller .com bubble forming. especially when yahoo start talking about being under valued at 44 billion.

        • by Telvin_3d (855514) on Monday February 04, 2008 @01:16AM (#22287704)
          Well, I'd agree that many of those accounts are no longer active. On the other hand, I suspect that all that personal information sitting in those dead accounts is worth quite a bit to some people. Page views is not the only way to make money.
        • Re: (Score:3, Informative)

          by OakLEE (91103)

          500 million users might be every account ever created

          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.

          i have a sneaking suspicion there is another smaller .com bubble forming

          Not really, remember the first dot-com bubble was caused by people trying to value c

        • http://www.youtube.com/watch?v=I6IQ_FOCE6I [youtube.com] A sneaking suspicion, eh? You might not be the first person...
        • by Solandri (704621)

          i have to wonder about figures like that. 500 million users might be every account ever created, i bet there's 1/50 of those that are active.
          i have a sneaking suspicion there is another smaller .com bubble forming. especially when yahoo start talking about being under valued at 44 billion.

          Internet use in Western nations centers on search. Internet use in Asia centers on portals, and Yahoo has a pretty strong presence there. So one has to be careful not to generalize one's Western (search-centric) impre

    • But, i'll bite. I like feeding the idiots/trolls.

      12 billion dollars in cash and off US investments.
      close to 7 billion in revenue yearly.

      This doesnt include their assets in the US, buildings, technology, etc. EASILY worth OVER 20-30 billion.

      So, again, do you get why its undervalued?

      Microsoft was willing to pay 80Bill for yahoo in 05/06. Now they feel they are getting the bargain of the century. Yahoo may not be doing as good as golden child google, but its by no mean a slouch.
  • by olddoc (152678) on Sunday February 03, 2008 @11:47PM (#22287272)
    Yahoo is just acting like this in order to get a higher price from MS.
    Google + Yahoo! wouldn't fly with the antitrust regulators.
  • by wannasleep (668379) on Sunday February 03, 2008 @11:50PM (#22287304)
    They are just jacking up the price. The company will be sold. Once a company is in play, it is very hard to take it off the market.
    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.
    • by cookedchicken01 (1232626) on Monday February 04, 2008 @01:15AM (#22287700)

      They are just jacking up the price. The company will be sold. Once a company is in play, it is very hard to take it off the market.

      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.
      I really doubt this. They are not doing this just to jack up the price, I really think they are trying to avoid the takeover and are taking steps to try and defend themselves. This is a classic hostile takeover defense strategy. I'm pretty sure Yahoo! doesn't want to be acquired or merged with Microsoft. This takeover attempt was obviously hostile. Yahoo! has rebuffed Microsoft according to reports for a year. Do you really think a Stanford guy like Yang wants to see his life's work swollowed up by "the borg." There only chance to avoid the takeover is to find a white-knight like Google who can bail them out:

      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.
      • by wannasleep (668379) on Monday February 04, 2008 @02:25AM (#22288166)
        Obviously, what you say is entirely possible. But even with a white knight defense, the acquirer better offer more than MS or it'll be a proxy fight and a gazillion lawsuits. From the point of view of the investor, it doesn't make a difference. Higher offer wins.

        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.
  • by webword (82711) on Sunday February 03, 2008 @11:58PM (#22287348) Homepage
    From the article...

    "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.
  • by kylehase (982334) on Monday February 04, 2008 @12:04AM (#22287382)
    Here in Japan Yahoo is huge. Yahoo is the default portal for many Japanese on their computer and mobile browsers, in fact all Softbank (formerly Vodafone in Japan) phones don't have an Internet button but instead a Y! button. Unlike Americans who favor simplistic websites with lots of space for easy readability, Japanese tend to like cluttered pages with noisy interfaces [yahoo.co.jp]. Perhaps it reminds them of the crowded streets and electronic billboards in Shibuya.

    Yahoo is also an ISP in Japan with a rather large penetration.

    • Re: (Score:2, Funny)

      by Anonymous Coward
      Yahoo is also an ISP in Japan with a rather large penetration

      ahah! their popularity is explained.
    • by erwanl (1209904) on Monday February 04, 2008 @03:19AM (#22288478)
      Yahoo! in Japan is not Yahoo!. It's Softbank paying royalties to Yahoo! to use their brand, logo, and some of their technologies (like IM). That's why they have so many services that Yahoo US doesn't have (ISP, a leading auctions website...) Softbank bought the Japanese branch of Vodaphone (formely J-Phone, before Vodaphone bought it and screw it up). It's not a suprise that Softbank phone have a Y! button: it's the same company! Also, that's why there is no Japanese version of Flickr: because of their contract with Softbank, Yahoo! isn't allowed to release any product in Japanese.
  • Google? No way. (Score:5, Interesting)

    by rudy_wayne (414635) on Monday February 04, 2008 @12:06AM (#22287394)
    Over the past 3 months, Yahoo's stock has been dropping like a rock -- from $33 to $19. It jumped back up to $28 after the Microsoft takeover announcement, but that just means Microsoft will have to kick in another couple billion to get the deal through.

    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.

  • "At $31 a share, Yahoo believes the bid undervalues the company, two sources said."

    Undervalued? Do they really believe that? Or is that just negotiation strategy, because Microsoft offered much more per share than what the stock was going for.

    • Re:Are they kidding? (Score:4, Informative)

      by TubeSteak (669689) on Monday February 04, 2008 @12:20AM (#22287446) Journal

      Undervalued? Do they really believe that? Or is that just negotiation strategy, because Microsoft offered much more per share than what the stock was going for.
      When they say "undervalued" it usually means "the company is worth more than [offer], in assets alone & we could get more money if we chopped Yahoo! up and sold it off piecemeal"
    • 2 dollars less a share than yahoo was very recently, and right now tech stocks are largely deflated (Google and MS are the obvious exceptions, and even MS is only stable(ish), not hot). At the very least, Yahoo! probably feels it deserves the 33 a share, and it could be worth a lot more .

      Especially if Google bites. Yahoo's big problem as a company is keeping costs down and monetizing it's customer base, two things that Google excels at doing. Google potentially gets a fat paycheck for playing consultant,
  • Yahoo Need Microsoft (Score:2, Interesting)

    by hotcalsun (1052190)
    Whether or not Yahoo! knows it -- they need Microsoft. They've been bleeding the last several years with missteps and delays with Panama. Let me see if the DOJ would approve a deal that would give a 90%+ search engine monopoly to Google. Doubt it. Microsoft like it or not is the best option for Yahoo!
    • Re: (Score:3, Insightful)

      by Amorymeltzer (1213818)
      As ars [arstechnica.com] said, "Combining two companies that are losing market share doesn't guarantee that the trend will be reversed." Yahoo needs a better game plan, and a way to generate money from their portal. That they can do all on their own.
    • by 2ms (232331)
      Well, don't forget that the DOJ basically said "MS has a monopoly but we aren't going to do anything about it and will just let them continue about their merry anti-competitive way" only a few years ago. It'd practically be a double standard if they were to stop Google from buying Yahoo in a way, wouldn't it?
  • Timing of the bid (Score:3, Interesting)

    by Fractal Dice (696349) on Monday February 04, 2008 @12:30AM (#22287490) Journal
    This is interesting given the timing of the Microsoft bid and the state of the wireless auction. Could Microsoft have waited until they believed Google had committed its resources to a spectrum bid before making a move to take Yahoo?
    • Re:Timing of the bid (Score:5, Interesting)

      by cookedchicken01 (1232626) on Monday February 04, 2008 @01:04AM (#22287650)
      Did anyone else find it funny that the bid also came the day after the DOJ stopped its oversight over all but one area of Microsoft's business practices? Unfortunately, slashdot and others reported it like the DOJ actually extended some kind of meaningful oversight, but in truth, just the opposite. "The US Department of Justice has extended its anti-trust oversight of Microsoft by two years. This only applies to the requirement that Microsoft make protocol documentation available to competitors, though. All of the other requirements have expired, and Judge Colleen Kollar-Kotelly did not give the states complaining the full five years of oversight they requested."
  • A dose of reality (Score:2, Insightful)

    by wonderdogger (1231610)
    You know - the thing that bugs me most about the tech crowd is when I compare what I hear the real world's opinion of the competitive framework with what users on rags like Slashdot have to say. It is an incredibly huge gulf. It makes the tech community look hopelessly naive and biased.

    I am a postgrad of competition law right now so I know quite a lot about it. Firstly, the real world doesn't believe Microsoft is any more or less evil than any other monopoly - past or present. In fact the opposite is mor
    • by ZombieRoboNinja (905329) on Monday February 04, 2008 @01:13AM (#22287690)
      >>Best way to prevent this inevitable evil? Force the infrastructure to become a shared resource of multiple companies by making it economically less efficient for all of them not to inter-operate.

      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.
    • by Anonymous Coward on Monday February 04, 2008 @01:49AM (#22287882)
      I don't think you understand what Google does. Your post infers that you see it as a technology company (you used the words innovation and openness, then go on to use the term "infrastructural lock-in like..." followed by "inter-operate" in the final paragraph). But in reality, Google is, at the moment, an advertising company that just so happens to specialize in technology... From Wiki:

      "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.
    • Re:A dose of reality (Score:4, Interesting)

      by Spy Hunter (317220) on Monday February 04, 2008 @03:04AM (#22288424) Journal
      The reason tech people don't worry about a Google monopoly is we realize Google is not and can not be a monopoly, because the markets Google operates in have low barriers to entry. Yes, techies trust Google more than they trust Microsoft, but trust in Google is not necessary to realize that Google simply can't acquire monopoly power the way Microsoft did. Without high barriers to entry it is impossible for Google to come anywhere *near* the market share percentages Microsoft continues to enjoy in the OS and office software markets (>90%).

      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.
  • by cookedchicken01 (1232626) on Monday February 04, 2008 @12:56AM (#22287602)
    Check out this blog post by Google's Senior Vice President and Chief Legal Officer, David Drummond on Google's Corporate Blog. Google clearly sees this deal as a direct threat to the future of the Internet. They are not going to let Microsoft walk all over them like Netscape. Microsoft's bid for Yahoo! was a declaration of war:

    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.
  • by Christianfreak (100697) on Monday February 04, 2008 @01:09AM (#22287672) Homepage Journal
    MSN is the default on new computers so the only people that use it are the ones that don't know any better. On the other hand pretty much everyone who uses Yahoo does so because they chose to do so. Microsoft has too much hubris to keep Yahoo's technology, they're going to change it all to Windows and .NET and just like what happened with Hotmail it will suck in then end.

    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
    • Re: (Score:3, Informative)

      by DerekLyons (302214)

      Microsoft has too much hubris to keep Yahoo's technology, they're going to change it all to Windows and .NET and just like what happened with Hotmail it will suck in then end.

      Yeah, Microsoft killed Hotmail so thoroughly that it remains nearly the biggest player in Webmail and has a market share considerably larger than Gmail.

      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 anyw

  • I think there have been a good number of misconceptions about Microsoft's $45 billion offer for Yahoo!, and there are a few points that we ought to make note of.

    Firstly, Microsoft's valuation indicates their valuation of Yahoo! being part of Microsoft. Synergies account for the higher value!

    Secondly, with the offer, Yahoo! is now "in play", and there is a consequent expectation that someone such as Google may come along and make an offer. Since it is in play, people expect an offer that comes at a premium
  • Well, Google obviously has something to say about this offer, but what about IBM?

    Will IBM let a big part of the internet bussiness shift easily to MS's hands? I find-it hard to believe, for my part I do expect an IBM movement from now on.

    Let's wait and see..

  • Yahoo vs MSN vs Google [blogspot.com]

    I hope Google does bail them out of this. I'd hate to see Microsoft ruin a few decent services. Chief among them, Flickr.

    Like I said though, Google stands to gain a ton of users flocking away if MS acquires Yahoo.

  • Bad news (Score:3, Interesting)

    by kbahey (102895) on Monday February 04, 2008 @03:23AM (#22288492) Homepage
    Yahoo is the provisioner of email to Rogers, a very large ISP (and cell phone provider, among other things) here in Canada. Rogers' competitor, Sympatico is allied with MSN. So, there will be some impact here if this goes through.

    The implications of Microsoft bidding $44.6 B for Yahoo [baheyeldin.com] are many, and they are all bad news. Bad for customers, bad for the internet at large, bad for employees, and bad for open source.

    Google acquiring Yahoo is a lesser evil, but still one less competitor to keep the others honest.

    But with an offer on the table, and a possible counter offer/alliance from Google, something is going to happen, and it will have profound implications on many people.
  • by nguy (1207026) on Monday February 04, 2008 @07:34AM (#22289372)
    Microsoft spending $44bn on Yahoo! is such a bad idea for Microsoft that I really hope the deal goes through. I feel a little sad for Yahoo!, but I think they're in trouble anyway, and they are getting plenty of money out of it. And I don't think the deal "undervalues" Yahoo!; I think it's pretty much downhill from here on for Yahoo! no matter what.

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