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Microsoft Sets Three Week Deadline for Yahoo! In Public Letter 175

Posted by Zonk
from the little-note-from-me-to-you dept.
An anonymous reader writes "In a letter sent today, Microsoft writes to Yahoo's board of directors to tell them that they would like to 'negotiate a definitive agreement on a combination of our companies.' Their message is a combination of friend and foe: 'If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders.'"
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Microsoft Sets Three Week Deadline for Yahoo! In Public Letter

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  • by HerculesMO (693085) on Saturday April 05, 2008 @04:22PM (#22974836)
    Which means frankly, that MS is going to own Yahoo.

    I don't know if this is good or bad, but time will tell... The shareholders hear only the sounds that money makes, and they are going to sell out quickly, especially in the midst of this recession.
    • by mkiwi (585287) on Saturday April 05, 2008 @04:32PM (#22974900)
      Personally I think it would be funny if Google and Yahoo got some sort of deal together like TFA suggests might happen. If you can imagine how mad Balmer would get after a top programmer leaves, just imagine what would happen if Yahoo tied itself to Google. He'd be freakin foaming at the mouth and no chair in the Seattle area would be safe from him.
    • by AHumbleOpinion (546848) on Saturday April 05, 2008 @04:53PM (#22975024) Homepage
      The shareholders hear only the sounds that money makes, and they are going to sell out quickly, ...

      Shareholders are supposed to sell when they receive an advantageous offer. Advantageous being a return that is more likely greater than holding the stock. What do you think shareholders are, some sort of fanboys? More importantly, why do think the founders of the company went public and brought in shareholders, it was so that the founders could pocket a lot of money. So now the story that the founders sold to the shareholders turns out not to be true, and the shareholders are looking for their best option. This is the way public financing works.

      ... especially in the midst of this recession.

      The motivation to sell in this specific case is not the recession but a failed business model.

      FWIW, the midst of a recession is usually the time to buy. The onset of a recession is usually the time to sell.
      • Although I do frequently have to point out to people how the whole concept of publicly traded companies works, I must disagree with you on this point; Shareholders are not supposed to do anything. Shareholders are of course free to do whatever they want (with obvious illegalities like insider trading aside), but there is no "thou shalt" commandments list for shareholders.

        Personally, more shareholders should behave as what they are -- partial owners of the company, and therefore do what they believe is right for the company, the public, the environment, as they see fit, not just the bottom line, but they can buy or sell the stock whenever they like if they feel like doing so and have a seller/buyer available to do so.

        Basically, if most of your shareholders don't want the company sold because they think its a bad idea even if it IS financially advantageous, then good for them, and it won't sell.
        • Re: (Score:3, Insightful)

          by saleenS281 (859657)
          BWAHAHAH, you had me for a minute there!!! Oh... you were serious :( Welcome to the *free market* where the quick dollar is the mighty sword.
        • by westlake (615356)
          more shareholders should behave as what they are -- partial owners of the company

          who else has but a stockholder shares ownership of a corporation?

        • Shareholders are not supposed to do anything.

          I used "supposed to" not in a literal sense, rather in a "rational behavior indicates" sense.
        • Re: (Score:3, Informative)

          by rtb61 (674572)
          Now for the reality of a M$ deep pockets take over. If M$ wanted they could have simply announced the takeover bid and simply started buying shares. The big catch with that is, as it works in the current market, share price is a supply and demand, M$ in the buyout attempt creates an artificially high demand, how high will they go double, triple current values.

          So a lot of investor start buying Yahoo stock in competition to M$ in hopes of selling to M$ at an even higher price. The more M$ invest, the more p

        • I think you misunderstood GP. "Supposed to" did not mean legally obligated to. It meant rational shareholders would do so, i.e. in a rational world (which is the only kind where most economics arguments make sense), they're expected to.
          • That's precisely what I disagree with.

            There are many rational reasons to sell or buy stock besides short term financial gain (or even long term).

            You may invest in your friend's business because he's your friend. You may then decide not to sell your shares to his ex-wife for twice their value because you want him still to be your friend.

            People have forgotten why we have a public market in the first place -- so we can do the above on a huge scale. There's no reasonable difference between buying a chunk of y
        • Shareholders by law can not make business decisions. They can only elect board of directors who pick the CEO to run the company for them.

          The shareholders are just guys with clipboards who have a BA degree and own stocks in hundreds of companies. Their performance is being evaluated on how much many they make each quarter and will be fired if they can't get huge profits.

          So basically business degree accountants with clipboards arm twist the professionals with MBA's who know how to run the company.

          MS knowing t
      • by stoicfaux (466273)

        Shareholders are supposed to sell when they receive an advantageous offer. Advantageous being a return that is more likely greater than holding the stock. What do you think shareholders are, some sort of fanboys?
        Er.. I think you mean that the officers of the corporation are supposed to act in the best interests of the shareholders.

        The shareholders can be as rational or emotional with their shares as they want.

      • Shareholders are supposed to sell when they receive an advantageous offer.

        The motivation to sell in this specific case is not the recession but a failed business model.


        Is it really advantageous? A swap of Yahoo stock to Microsoft stock doesn't make much sense to me. Microsoft has been buying out a lot of businesses, and most of them don't seem to pay back their initial investment, they're lucky that their OS and Office business keeps them profitable despite throwing all this money around. Yahoo has made
      • The problem is Yahoo is projected to increase its networth many times over in the following 5 years. They are investing alot in R&D in long term growth projects to outdue google.

        MS is offering money for what its worth now and not counting on their planned offerings for the future. The issue is shareholders dont care about what its going to be worth 5 to 8 years and want a get rich instant return!

        Gillette faced a similar dilemma back in the 80's before the mach 3 and sensor products. A hostile takeover w
      • by MikeFM (12491)
        What is the benefit to shareholders of a tech company when the company gets bought by another company because it couldn't make it's own products a success? Yahoo is already a last-gen company but how will it help it to be bought by a company that hasn't had a really successful product in the last-gen space let alone the current generation?

        If Microsoft buys Yahoo I'll wait until I see the spike where all the stupid people buy in and then sell. Microsoft can't make their own stuff work so they're going to use
    • The shareholders hear only the sounds that money makes...

      So if Microsoft were offering money (instead of MS shares), they'd surely listen?

      • by jorghis (1000092)
        $X worth of MS shares is just as good as $X. If you dont want to hold MS shares you can just sell them the instant you get them, MS shares are highly liquid like most large cap stocks. Really the better question would be "Is yahoo worth $X?". Indicators are that most people who currently hold yahoo stock seem to think thats a good price to sell for, but we will find out for certain if it goes to a proxy battle.
        • Re: (Score:3, Insightful)

          by AJWM (19027)
          $X worth of MS shares is just as good as $X.

          No, it ain't, because the value of MS shares varies according to the whim of the market. Now, that could mean that $X worth (nominal, at the instantaneous market price) could be even better than $X, or it could be worse. Certainly if a lot of people thought that "you can just sell them the instant you get them", they'd be worse than cash because the sudden dump of shares for sale on the market would drag the price down. (You've also got to figure in broker fees
          • by Z34107 (925136)

            You're assuming that one is not free to sell $X worth of Microsoft shares for $X (minus brokerage fees and capital gains tax.) If you're given Microsoft shares in exchange for your Yahoo ones, nobody's forcing you to keep them after the company's sold.

            However, if you hold on to the Microsoft shares, you are someone correct. The price of a stock does vary with the "whim" of the market, but if you'd rather have $X, sell the shares.

            (But, presumably, if you were already holding Yahoo! shares instead of ca

            • by AJWM (19027)
              You're assuming that one is not free to sell $X worth of Microsoft shares for $X.
              they
              Not at all. One is always free to offer to sell shares for whatever one can get -- but if some major former Yahoo shareholders decided to try to sell off their newly-acquired $X worth of Microsoft shares, the market would respond to the increased supply by lowering the bid price. Supply and demand.
              • by Z34107 (925136)

                True - but then it wouldn't really be "$x" dollars worth.

                Yahoo shareholders seem to be cheering the buyout - their share prices jumped up quite a bit the first time Microsoft announced this. So, I doubt that everyone with Microsoft stock is going to sell it all at once, in volumes large enough to affect the going price, especially since most people seem to like this deal.

    • Re: (Score:3, Insightful)

      by tyrione (134248)

      Which means frankly, that MS is going to own Yahoo. I don't know if this is good or bad, but time will tell... The shareholders hear only the sounds that money makes, and they are going to sell out quickly, especially in the midst of this recession.

      Fortunately, for Yahoo shareholders Microsoft's stock is so diluted and volumetrically reached a point of saturation [they really should have taken Jackson's ruling and split into 4 separate corporations] that the upside of stock price potential is virtually within +/- 10 ticker points.

      If Yahoo shareholders are looking for a solid Dividend Stock they'd already own Microsoft. They are looking for a ROI that has a large upside and Yahoo has that leverage.

      • If Yahoo shareholders are looking for a solid Dividend Stock they'd already own Microsoft.

        In the past couple of years, Microsoft's gone through half it's cash reserves buying back stock and issuing dividends to prop up their share price.

        That's not sustainable, and many shareholders might feel more comfortable with Yahoo in the long term.

    • Are they trying to drive the share price down? Is it against the law to put a company in uncertainty and controversy just for your own ends?
    • by Ilgaz (86384) *
      It is very basic for me, the day the agreement voted "Yes", I will cancel/purge my account at Yahoo which I created when MS acquired Hotmail.

      I know what will happen and I invite everyone to look for other options. It doesn't have to be Google. It won't be Google for me for example.

      There are a huge amount of people like me, even completely non technical Yahoo mail "Plus" owners. They have chosen Yahoo not because they know FreeBSD or PHP, they have chosen because it is not Microsoft. For 10 years, I have see
      • by sconeu (64226)
        I guess it's time to switch to Time-Warner or Verizon for my broadband. I've had AT&T/Yahoo from before the Yahoo days -- back when it was PacBell DSL. If MS buys them, it's definitely time to switch :(

    • The price of yahoo has already adjusted for the possible buyout. If there is any more adjustment to be made, it will made Monday morning - not when the actual buyout occurs.

      This news will probably cause a price spike Monday morning. Smart traders may sell on the spike up - that way, they win either way.

      Everybody on Wall street knows that you buy on the rumor, and sell on the news. The *rumor* of this merger is helpful is helpful to traders, but long term, the actual merger may not be helpful at all.
  • Galactica? (Score:5, Funny)

    by tjstork (137384) <todd.bandrowsky@NOSpAM.gmail.com> on Saturday April 05, 2008 @04:30PM (#22974882) Homepage Journal
    Microsoft trying to take over Yahoo is old news. Microsoft threatening someone is old news. Techies should be rejoicing over the return of Galactica, and yet, what do we get here? Sadly, silence. Some geeks these days!

    To paraphrase Captain Kirk: "I mock your superior intellect."

    And Spock. "He is very intelligent, but his thinking is two dimensional."
  • by dpaluszek (974028) on Saturday April 05, 2008 @04:32PM (#22974898)
    Come on, Yahoo. I think Microsoft is being reasonable here, plus offering quite a bit. Even though I'm not a huge Microsoft fan, there is a thing called common courtesy.
    • by borgheron (172546) on Saturday April 05, 2008 @04:48PM (#22974990) Homepage Journal
      Sitting on the sidelines and saying what someone should do with a company they've built up from the ashes is very easy for you, but you have to consider what they're thinking. The people who founded Yahoo are free thinkers.

      Yahoo is thought of (or was, during the boom) almost like Google is today. It's hard to build something from nothing and then have someone threaten to take it away like this. MS is strong arming them. They're basically saying "Sell or we'll take you over by rousing your stock holders" which is just business... but you have to really consider it from the perspective of the people who have created and grown with the company from the beginning.

      If I were the yahoo management, I would be fighting MS with everything I have and looking for an alternate deal to screw them.
      • Re: (Score:3, Insightful)

        by digital19 (1195625)
        I think that's exactly it. People want to frame this as 'it's a good deal now that we're in a recession'... as if economics was the only motivational factor behind anyones' existence.

        I would imagine Jerry Yang finds himself opposed to many of Microsoft's core operating principles.

        Undoubtedly, he will cringe when he types yahoo.com into his browser a few years from now.

        • Re: (Score:3, Funny)

          No problem, he must be already used to type google.com when he wants to do a search. After all, who would search in yahoo?
      • by jorghis (1000092) on Saturday April 05, 2008 @05:23PM (#22975194)
        The founders and management of Yahoo dont own the company, it isnt their decision nor should it be. The founders made the decision that they wanted to go public and basically sell the company to others. Sure, they built it from ashes, but they made the decision to sell it. (for quite a bit of money too)

        What is becoming apparant now is that they really just wanted all the money they got from selling the company to the general public, they didnt actually want other people to be the real owners of the company. You cant have your cake and eat it too, if you sell controlling shares of your company you have to accept that you cant just do whatever you want to with it, you have an obligation to act in the best interests of the shareholders. (the real owners of the company) If the founder of a company cant accept that he should just keep his company private.
        • by ignavus (213578)
          Why don't the Yahoo board just go over Microsoft's head and offer the shareholders of Microsoft a deal and buy out Microsoft ("Yahoo Windows")? They say attack is the best form of defence.

          Oh, wait, Ballmer and Gates ARE the shareholders of Microsoft....

        • by linguizic (806996)
          I'm not so sure that's the case. I think what's going on is that for the founders, Yahoo is worth an awful lot more as it's been them putting elbow grease into it. Sure, they might be over-valuing the company, but they're not in the best position to judge it's value. Imagine you've built a house yourself, your own sense of it's value would be inflated from what the market will pay for it. When it's you hard work, your sense of a thing's value is higher than otherwise. I know I'm always getting underpai
      • by pclminion (145572) on Saturday April 05, 2008 @05:25PM (#22975212)

        They're basically saying "Sell or we'll take you over by rousing your stock holders" which is just business... but you have to really consider it from the perspective of the people who have created and grown with the company from the beginning.

        Boo-hoo. Those poor, poor billionaires. Their lives will have been meaningless.

        Don't want to be subject to hostile takeovers? Don't go public. And good luck making a few billion.

        • Re: (Score:3, Insightful)

          by Atario (673917)

          Don't want to be subject to hostile takeovers? Don't go public. And good luck making a few billion.
          More specifically, don't sell a majority interest of your company -- retain that 51% for yourself. Can still make billions, but don't risk getting strong-armed out of your own company.
          • by pclminion (145572)
            The problem is, retaining 51% means that you can only raise an additional 49% in capital. If you need millions and you need them now, there's no way you're walking away with a majority stake in "your" company.
    • poster saith:

      Come on, Yahoo. I think Microsoft is being reasonable here, plus offering quite a bit. Even though I'm not a huge Microsoft fan, there is a thing called common courtesy.

      "If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders.'"

      Maybe Apple and Yahoo! should offer to buy Microsoft - and make the same "swim with the fishes" offer.

  • by no-body (127863) on Saturday April 05, 2008 @04:34PM (#22974910)
    and making a lot more friends on the way.

    Seems to become a staff/owner aging issue or they are getting desparate.
    • by rolfwind (528248)
      I have to agree. I don't think Yahoo is all that great of a buy especially at $45-50. Don't get me wrong, it may be worth a significant fraction of that but that fraction will just be fucked by MS as well.

      I can't help but think that amount of money would better serve their shareholders in the form of dividends rather than flailing about looking to buy a ready-made solution to their increasing internet irrevelancy. It's too bad, MS can make pretty nice things when they try and it's the engineers that desi
  • "If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors," Ballmer wrote.

    Isn't that basically what they just got done doing with ISO? Buy the votes to get their way "by-the-rules"?
    • Yeah, but this time it is legal.
      • by rbanffy (584143)
        As immoral as it may be, it's not illegal to buy votes at the NBs that vote on ISO standards...
    • not really.

      The shareholders are the owners of the company. They are the ones who are ultimiately in charge.

      For a shareholder who bought yahoo just as an investment the MS deal is a very good one. The value of thier investment will more than double overnight. If they don't want to hold MS stock they will be able to easilly sell it off.

      A shareholder who actually cares about the company and thier products would probablly want them to remain independent.

      The former category probablly make up the majority of sha
  • If yahoo wants to be on the windows desktop by default, this could be the way to do it.
    • Re: (Score:3, Informative)

      by Ilgaz (86384) *
      Putting icons to users desktop and tricking users by Start menu didn't work well for MSN. Yahoo won because people have chosen it, not by a trap, by actually going to www.yahoo.com or getting their toolbar (as opt-in) from toolbar.yahoo.com . They have chosen Yahoo because it promises a minimal configuration need which definitely won't "punish" you for not using Windows OS.

      AOL purchased Netscape just for home.netscape.com start page for $5 billion. What happened when they made Browser irrelevant? People bas
  • by rastoboy29 (807168) on Saturday April 05, 2008 @05:03PM (#22975078) Homepage
    "We're determined to destroy both our companies, so hurry up and help us!"
  • by garett_spencley (193892) on Saturday April 05, 2008 @05:09PM (#22975110) Journal
    ... that we'll be dressing up the Yahoo! logo as a borg ?

    That'd actually be pretty sweet.

    You know, despite being a Yahoo! mail user since the 90's who hates Microsoft as much as the next slashdotter, I actually hope they do merge now just so I can see that.
  • Antitrust someone? (Score:2, Interesting)

    by Anonymous Coward
    Doesn't this sound like a case for antitrust? I don't think EU would approve it.
    • Re: (Score:2, Insightful)

      by Kalriath (849904) *
      No, because there is still large competition in the field (Google, AOL)
    • by PPH (736903)

      Probably not. Yahoo doesn't have a large desktop/server s/w market and Microsoft can't deploy web services to save its life.

      There's not much overlap.

  • Gee, that's a nice company you have there. It would be a shame if the stockholders lose faith in you ...
  • The more money MS blows on purchasing Yahoo!, the less they have to go do mischief elsewhere [slashdot.org].... So that is sort of good news.

    And if the Yahoo! stockholders can't learn from history what MS does to companies they "embrace"..oh well...tough beans, and more good news, because our economy as a whole is suffering from short term profits "investors" mindsets..so.. if they approve it and wind up taking a bath eventually..who cares really? And if *MS* stockholders think blowing billions on this is a good i
  • Microsoft wants yahoo for it's user base and technology. Which is moot. The moment such a take over is completed, yahoo user base crumbles as people leave.

    For example,

    Flickr usage will drop dramatically. Some might remain, millions leave.
    Yahoo! Groups groups will be deleted in the thousands.
    And Yahoo! Mail usage will end since it just migrate to Hotmail, which no one will use or uses now.
    myYahoo! portal users to 0 since no one wants to use Live.com because it is a shitty portal
    In the end, Takeove
    • by pclminion (145572)

      Microsoft wants yahoo for it's user base and technology. Which is moot. The moment such a take over is completed, yahoo user base crumbles as people leave.

      Why, exactly, do you think that would happen? Do you think the millions of users have some kind of ideological vendetta against Microsoft? Wake up. If MS has half a brain cell, they will keep the services and web sites exactly the same, at least for several months as they figure out a plan to ease into things. YOU might leave, but Microsoft doesn't ca

  • I can see this now. Microsoft's idea of taking the buyout issue straight to the Yahoo shareholders is really saying; "we're sending Guido, Marko, and Tony "Bullets" Kelly out to each of the residences of the shareholders and forcing them to sign agreements releasing their shares to Microsoft... or else!

    Next thing you know, Microsoft will have advertising like; "Yahoo mail. We; at Microsoft invented Internet mail much like the rest of the Interet! Now we can improve Yahoo mail!"

    I'll be shuttin' down my Yahoo
  • Panic? (Score:3, Informative)

    by icsx (1107185) on Sunday April 06, 2008 @08:09AM (#22979022)
    Microsoft must be real desperate for getting Yahoo to theirselves. Funny thing is that there is no one to stop them if the stockholders will sell.

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