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Rumors Flying On $20 Billion Microsoft Offer For Yahoo 112

Posted by ScuttleMonkey
from the wishful-thinking dept.
gadgetopia is one of many who wrote to tell us about the many rumors flying around that Microsoft may be aiming another deal at Yahoo, this time for $20 billion. The story was apparently originally broken by the UK-based site Times Online, and contained lots of details about the supposed deal. Since then, Ross Levinsohn, reported to be part of the new management team, has denied there is any truth to these rumors, leading to questions about where all of this supposed information came from. Yahoo has declined to comment officially.
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Rumors Flying On $20 Billion Microsoft Offer For Yahoo

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  • by dsanfte (443781) on Monday December 01, 2008 @07:16PM (#25952907) Journal

    In this climate I don't see Microsoft buying -anything- for a $20B outlay unless it were the next Google. And Yahoo isn't.

    • by Freaky Spook (811861) on Monday December 01, 2008 @07:38PM (#25953131)

      I agree, Yahoo's revenue streams have been dropping and their annual profit's have not been good. MS would have to have a compelling reason to buy Yahoo as the acquisition would probably not give them a competitive advantage over Google.

      With all this talk of Windows in the cloud, and seeing what Microsoft have just done by adding Netflix to the Xbox 360, it appears like they are looking seriously to selling appliances/subscription services. If they could convert even a fraction of their OEM market into hosted services, it could be as lucrative as their Office and Server licensing streams.

      • by cheater512 (783349) <nick@nickstallman.net> on Monday December 01, 2008 @08:00PM (#25953339) Homepage

        Microsoft doesnt want Yahoo to make money, they want Yahoo for the hits and content.

      • by hendridm (302246)

        I'm not sure why they would spend $20 billion to serve ads on Yahoo's search. What would make more sense to me to to buy everything *except* Yahoo's search (mail, flickr, etc). Yahoo has some sweet web apps, and I think that would better compete with Google. MS already has search.

      • by jimmypw (895344)

        Yahoo has a revenue stream? you mean people still use them despite their over cluttered pages and inferior services.

        • by Zarf (5735)

          I do believe they have a revenue stream and an "Exchange Killer [zimbra.com]" (at least a competitor) and they are definitely one of the top five search engines. I think search engine ranks right now must be... 1) Google, 2) Google, 3) Google, 4) Yahoo, and 5) Google. So a second MS acquisition attempt is very plausible.

    • ...leading to questions about where all of this supposed information came from.

      A better question would be, why is gmail trying to suppress that information? Check your spam folder, and click on 'Display images below' (otherwise, you won't see it).

    • by westlake (615356) on Monday December 01, 2008 @07:48PM (#25953225)
      I don't see Microsoft buying -anything- for a $20B outlay unless it were the next Google

      Microsoft has money to spend and AAA corporate credit. Exxon-Mobil grade credit. Why shouldn't it be out shopping for bargains?

      • Microsoft has money to spend and AAA corporate credit. Exxon-Mobil grade credit. Why shouldn't it be out shopping for bargains?

        No kidding. This is the perfect time for a shopping spree. Guys like Yahoo's shareholders will be screaming for this sort of a buyout to save them from losing their shirts.

        Microsoft has more cash than Jesus right now. They have nothing to worry about.

        • by morgan_greywolf (835522) on Monday December 01, 2008 @08:15PM (#25953461) Homepage Journal

          Microsoft has more cash than Jesus right now. They have nothing to worry about.

          Not likely. According to this website [slashdot.org], in the year 2000 alone, American evangelical Christians raked in $2.66T (yes, that's trillion, no, that's not a typo.) If, according the site, 9% of these 'born-again' Christians tithed -- contributed 10% of their income -- then that should be about $23.94B in 2000 alone. If we count all 9 years between 2000 and 2008, and people are giving to Jesus at the same rates, I figure since 2000, Jesus must've raked in at least $200 billion or so, probably more. Let's be conservative and say the number is closer $300 billion.

          That makes Microsoft's $30 billion or so in current cash (according to Google Finance) seem a bit puny in comparison, huh?

          • Re: (Score:2, Funny)

            by Whiternoise (1408981)
            So why can't the church solve the credit crisis =P
            It's not like God needs it?
            • If God doesn't need money then why does he insist on sending his minnions to my front door to beg for it, is it some kind of test?
      • by seroph (414622)

        This purchase rumor was proven false on the 30th of November The same day it was announced. http://www.reuters.com/article/newsOne/idUSTRE4AT1AO20081130 [reuters.com]

    • Re: (Score:3, Informative)

      by jcnnghm (538570)

      They'd definitely buy, this is a great buyers market after all. The trouble is that this story was pretty thoroughly debunked yesterday [techcrunch.com].

    • Yahoo is one of the few companies that's positioned anywhere near a place where they could grab a share of what Google's doing.

      They have some of the web's most trafficked destinations -- I think they're still #1 in traffic even with the rise of the social networking sites. Part of it's mindshare and brand recognition, part of it is the sheer variety the apps in their portal portfolio (flickr, delicious, groups...).

      Microsoft right now is in a position where they are losing control of the web as a platform. E

    • by alcmaeon (684971)

      Yahoo's market capitalization is only $14,904,080,000.00 as of today, so why would MS offer to buy Yahoo for 33% more than the market value of the company?

      I'm not saying it's impossible, but I am saying it's stupid.

    • history lesson: Yahoo were the previous Google, back in the mid 90s.
  • Hmmm. (Score:5, Funny)

    by Adambomb (118938) on Monday December 01, 2008 @07:25PM (#25953013) Journal

    44 billion to 20 billion.

    Are they trying to actually buy the company or do they just happen to have cameras in place at the Yahoo Shareholders Meetings. Maybe Ballmer just wants to have some footage of some other hypertensive sweaty jumping exec to replace his favorite internet memes.

    • by Eskarel (565631)
      Well given that even 20 billion is more than the shares are currently worth, I'd say the drop is pretty understandable.

      Realistically, if Microsoft don't buy yahoo, they're probably going to go under anyway. About the only thing they've got left is selling API's so people can data mine anything you've got in Yahoo.
      • by Zarf (5735)

        Well given that even 20 billion is more than the shares are currently worth, I'd say the drop is pretty understandable.

        Realistically, if Microsoft don't buy yahoo, they're probably going to go under anyway. About the only thing they've got left is selling API's so people can data mine anything you've got in Yahoo.

        If that's true then Google really is an unstoppable behemoth now. Honestly, there isn't enough room on the internet for Yahoo to make a living too? I don't get it. But, I suppose that's why I'm a geek and not a suit.

        Surely there's a way for a Yahoo to shed 50% of its mass and use its name recognition to drive some kind of revenue stream. Even if it is just selling tee-shirts or something dumb like that. It worked for /. and thinkGeek (sort of I guess).

        Going under? I don't know. I certainly agree that they a

        • by Eskarel (565631)

          There's plenty of internet left for everyone and a whole lot of others.

          What there isn't is a lot of space left for old style search engines and content aggregators like Yahoo.

          For better or worse, google has that sector pretty well locked up tight.

          That doesn't mean that yahoo can't pull a rabbit out of their hat, that's always possible. If the economy hadn't tanked I'd even say it was likely, but they, like a whole host of IT(and other) companies which have fairly good long term prospects, but serious short

  • by nwf (25607)

    That couldn't possibly be true. Surely, Yahoo is holding out for $10B, given their track record.

    Perhaps they are waiting for a government bailout?

  • by QuantumG (50515) * <qg@biodome.org> on Monday December 01, 2008 @07:33PM (#25953079) Homepage Journal

    They better get their sale concluded before next year.

  • Hostile takeover (Score:5, Interesting)

    by PenguinX (18932) on Monday December 01, 2008 @07:36PM (#25953111) Homepage

    I recall reading an article a while back that Microsoft wasn't able to pursue unless Jerry Yang was ousted.

    Well, from now to then:

    * Ichann was elected to the board
    * Yang received severe criticism from the FUD machine
    * The project management of Yahoo services just went plain crazy (like deleting all of your user information in an 'upgrade')
    * <<insert more stupid crap here>>
    * Yang "stepped down"
    * And now report are that the 44.6 billion dollar deal is a mere 20 billion.

    Say what you will, but this isn't mere chance. Yahoo was one of the companies that helped to make the internet what it is today, and I am very suspicious about most nearly everything on the list above.

    Think what you will, but the only sane one in this deal was Jerry Yang from the start. Microsoft is ruthless - and this shows just how ruthless they are.

    • by Ron_Fitzgerald (1101005) on Monday December 01, 2008 @07:51PM (#25953253)

      Think what you will, but the only sane one in this deal was Jerry Yang from the start. Microsoft is ruthless - and this shows just how ruthless they are.

      How could you blame Microsoft on this? They offered the 44.6B and were turned down by Jerry Yang. Let me repeat that last part....Jerry Yang, the sane one, turned down the deal. His decisions resulted in a lesser valued company and now according to this article Microsoft is making another offer. How this leads to M$=EVIL I don't know.

      • The statement "M$=EVIL" is a tautology 'round these parts.
      • by cyberjessy (444290) on Monday December 01, 2008 @10:12PM (#25954357) Homepage

        At his sister's wedding, Michael Corleone tells his then girlfriend Kay Adams the story of how Don Corleone helped his godson Johnny Fontane. Michael explains that his father went to convince Les Halley, the bandleader, to release Johnny from a personal service contract that was holding back Johnny's singing career. Halley refused both the initial offer of $20,000 and the following offer of $10,000, completely missing the significance of that lower offer.

        You know what happened then.

      • by enigma9 (812497)
        MS is evil (or at least Ballmer is) because he can raise and crash stock prices based on small comments that get reported, and he knows this. MS was ranked third behind Google and Yahoo, and now with just rumors is able to knock Yahoo down quite a bit. I would not call Yang crazy for turning down MS; would you turn your baby over to Ballmer?
        • a) Microsoft raised stock prices based on these small comments, but I don't see how they can lower them, other than restoring them to where they were before they made these comments by denying any further interest. I don't know what makes you think MS is even behind this rumour. If you wanted to buy Yahoo, you would suppress rumours that you were about to buy them to keep the share price low. If you didn't want to buy Yahoo, you wouldn't do shit to make Yahoo's price go up anyway.

          b) Yahoo isn't a baby,

      • How could you blame Microsoft on this?

        The question is what would the stock have done if Microsoft hadn't gotten involved.

    • Re: (Score:3, Insightful)

      by Mex (191941)

      Think what you will, but the only sane one in this deal was Jerry Yang from the start. Microsoft is ruthless - and this shows just how ruthless they are.

      Man I agree MS is ruthless and I respect Jerry Yang but I just can't blame Microsoft here. They gave Jerry a 44 BILLION offer, and a few weeks later, the company loses almost 25 billion in value directly because of his refusal to sell.

      You mention some mistakes that Yahoo made but how is all that not his fault?

      • They gave Jerry a 44 BILLION offer, and a few weeks later, the company loses almost 25 billion in value...

        This is interesting. What caused that drop in value?
        How does the Yahoo! before the offer differ from the Yahoo! after the offer? Did someone important leave? Did Yahoo! stop offering some critical service? If not, then what? A loss of ~50% of a company's value is kinda huge, no? Where did all that money go? Did it get lost in a sock drawer?

  • ballmer is not doing it. yang can't broker it. nobody's got $20 billion in cash that isn't piled under the mattress and has some curious brown stains on top of the bag.

    not going to happen.

  • by Khopesh (112447) on Monday December 01, 2008 @07:44PM (#25953185) Homepage Journal

    Yahoo represents the "old web" that Google is beating the pants off of. I wouldn't be surprised if Microsoft/MSN's own resources are as good or better. What Microsoft is trying to do is get a leg up on Google, and purchasing Yahoo just won't do that.

    Microsoft is better off buying something smaller, perhaps InterActiveCorp (IAC), owners of Ask.com and Excite, Evite, and Match.com, but even then it's only accomplishing the same thing. Whatever base they draw from, be it Yahoo, IAC, or MSN itself, they're going to have to do some radical building of new technology to go anywhere.

    They are going to have to invest in actual development firm(s), and buy some up-and-coming companies like 37signals to get some real innovation. However, Google has already been doing this, so MS is getting sloppy seconds, and when you add that to the fact that Microsoft is horrible at the this concept (it's more typical that MS buys a company, takes its most salable product and integrates it into the MS product, then shelves the rest of the company and fires the staff).

    ASP.NET is going to need some serious help gaining AJAX support if it wants to be a contender (or is this Silverlight's aspiration? *shudder* ... Silverlight should contend with Flash. None of the big web2.0 apps use Flash). This absolutely must be key to their web services plan if they want to stay a "leader" in the PL field. Remember when Hotmail went offline because they couldn't successfully port it from BSD to Windows? They still managed to do it eventually (or does it just run though a proxy?) ... porting languages is MUCH harder.

    • by The Bungi (221687)

      I think Yahoo has been slowly reinventing themselves in the past two years. To call them "the old web" is rather shortsighted.

      Maybe they're not moving as quickly as many people would like, but that's a different institutional issue. Also, consider that Yahoo has a crapload of "old web" customers and users who in many cases are simply averse to change. You can't just one day drop them in a super slick Ajax interface that ties into nine different social sites and expect them to be thankful - because they just

    • ASP.NET is going to need some serious help gaining AJAX support if it wants to be a contender

      Recall that story not long ago about official jQuery support in Visual Studio?

      • by Khopesh (112447)
        Yeah, looks like I missed that one. You and two ACs pointed that out ... oops. I'm not really exposed to MS server stuff outside the Active Directory realm these days, and my social networking seems to have stagnated in the MS world; I used to have a number of friends who were in the ASP.NET camp, but most of them converted to other things (rails, j2ee, cakePHP, and non-web development with C#) and I lost track of some of them, too.
  • It has been obvious that this was going to happen ever since Icahn bought his board seat, and especially since he then got Yang fired.

    Ballmer's misspeak a few weeks ago was another big clue.

    Move along, nothing to see here.
  • Why? (Score:5, Insightful)

    by Darkness404 (1287218) on Monday December 01, 2008 @07:45PM (#25953203)
    Honestly, why is MS trying to get Yahoo? Yahoo is everything you would find in a dying company, a loss of public interest and a loss of revenue. Sure, MS could say that they owned a large portion of the search market, but what does that get them? Just about everyone is heading to Google and no doubt MS would manage to mess up Yahoo enough to make their few loyal searchers go elsewhere.
    • Re:Why? (Score:5, Funny)

      by justinlee37 (993373) on Monday December 01, 2008 @07:51PM (#25953251)

      There's something you're overlooking -- neither Youtube.com nor Google Video allow the posting of porn. Yahoo! does, making it one of the few mainstream providers who do. After that you have specialty niche sites like redtube.com and pornhub.com.

      Maybe Microsoft wants to get into cataloging porn? lulz.

      • by 8ball629 (963244)

        Maybe Microsoft wants to get into cataloging porn?

        Well... Bill Gates does have a lot of time on his hands now...

      • by Adambomb (118938)

        Maybe Microsoft wants to get into cataloging porn? lulz.

        If so, i hope that the companies involved realize that Embrace, Extend, Extinguish does NOT only apply to the wacky snuff fetishists.

      • Re:Why? (Score:5, Funny)

        by mcpkaaos (449561) on Monday December 01, 2008 @08:51PM (#25953787)

        After that you have specialty niche sites like redtube.com and pornhub.com.

        This, my friends, is why I love Slashdot. I learn something new every day!

      • by pilgrim23 (716938)
        porn and blue screen....hummm you may have something there...
      • There's something you're overlooking -- neither Youtube.com nor Google Video allow the posting of porn. Yahoo! does, making it one of the few mainstream providers who do.

        Not to mention Yahoo Groups. If you ever wanted to read something like some hot Severus/Frodo NC-17 BDSM fanfic crossover with furry pics, that's the first place to look ;)

    • Re:Why? (Score:4, Informative)

      by blind biker (1066130) on Monday December 01, 2008 @08:02PM (#25953353) Journal

      and a loss of revenue

      I bet this is going to get modded down or thoroughly ignored by everyone in this thread, but I like to remind tha Yahoo is profitable to the tune of several hundreds of million USD per quarter. That's not money one would spit on, not in this climate or in any financial climate!

      If that didn't quite sink in: Yahoo puts in the bank several $100.000.000/quarter.

      • Re:Why? (Score:4, Informative)

        by Darkness404 (1287218) on Monday December 01, 2008 @08:15PM (#25953457)
        Profitable as in financial profitability currently, but might I remind you that Yahoo had to lay off 7% of their employees recently. That isn't a mark of a profitable company, or one that will be profitable a year or two into the future.
      • Re:Why? (Score:4, Informative)

        by DragonWriter (970822) on Monday December 01, 2008 @08:30PM (#25953595)

        If that didn't quite sink in: Yahoo puts in the bank several $100.000.000/quarter.

        Which certainly doesn't make it worth even $20,000,000,000, especially if there is no indication that that profitably is increasing.

        Yahoo! is a mature company, not an up-and-coming star. Unless you've got some real synergies to realize by acquiring it, that means that its current profitability has to justify the cost of the acquisition. Even if it was making $1 billion per year in profit and showing signs of doing that indefinitely into the future, that would only be a 5% annual return on a $20 billion investment, which is decent, but not stellar; but its not doing that much, and its not showing a lot of promise of keeping up what profitability it has, either.

        • So, we have a profitable company here that rakes in hundreds of millions of dollars per quarter? After paying the employees? After taxes? You mean, pure profit?
          Why in fucking hell are they so eager to sell it then? How greedy can you even get? If this kinda attitude is the norm nowadays then I can only shake my head in disgust and say: everyone involved probably deserves what they'll get.

          On a more productive note: If you're so worried that all your products are crap and that your profit *may* decline in

          • by gtall (79522)

            One name: Carl Icahn. The man doesn't know the meaning of the term 'innovation'.

            Gerry

          • I approve of the general sentiment of your post :o)

            I wish you good luck with your startup!!

        • Which certainly doesn't make it worth even $20,000,000,000, especially if there is no indication that that profitably is increasing.

          I agree. I hope you realize that in my post I did not imply that Yahoo was worth that kind of money. All I was saying is that Yahoo is a viable company. The fact that it's not appetizing to Microsoft is a good thing from my personal point of view, because I like Yahoo the way it is, and I think a Microsoft ownership would change their services to the worse.

    • They're buying a big portion of the search market. Believe it or not some people still use Yahoo for search.

      Google owns around 70% of the searches on the 'net and climbing.

      Yahoo is a very distant 2nd at ~17%.

      MSN is around 8%.

      These figures are around a year old.

      If they have any hope of catching Google they'll need to combine forces, jettison some overhead and then still work like crazy to gain every percent.

      Man I still remember when Alta Vista owned Search. Those guys really blew it.

    • Microsoft buying Yahoo is kinda like Sears merging with K-Mart. Who cares? They're tired companies with tired, old business models. Microsoft's only good products are Word and Excel, and it has the industry chained to its Windows platform, so Microsoft will continue to make enough revenue to act like a hedge fund and buy up other companies. Yahoo is the Google that never evolved. K-Mart is Wal-Mart without the efficiency. And Sears is that great American company that is no longer really American (they imp
    • by hairyfeet (841228)

      You seem to be forgetting the two things that I personally believe is the real target for MSFT, and that is webmail and the patents that Yahoo holds. Yahoo still has the #1 webmail in terms of clients last I checked, and together with Hotmail would give MSFT not only a lot of eyeballs but a ton of data to mine and put them far ahead of Google in the webmail arena.

      And then there are of course the patents that Yahoo holds, sorry I can't remember the specific number offhand but there is one that will make G

  • by onescomplement (998675) on Monday December 01, 2008 @08:47PM (#25953755)
    It is Microsoft's board goodbye to Ballmer. He could not exist outside of Microsoft so giving him half of their cash to watch him go down in a self-involved ball of flames is reasonable. The bleeding will stop far short of that. His ego will not let him do something else. After all, he never dated. He married an employee. He is a weak thinker and undisciplined, at best. I keep remembering the desparate "I need a boot loader" email I got from his sorry ass via UUCP. I contributed one out of common grace. And in that he fucked me. At that point I came to realize the poor quality of many people in our business and Ballmer in particular. My butt still hurts. It is time for you to go, Ballmer. You are not interesting, you were never interesting, you are a clown that makes development at Microsoft incredibly difficult if for no other reason than you are an incompetent developer.
  • but could one explain to me how a convicted monopolist would be allowed to do this? Or maybe I'm way off base here

    • by Eskarel (565631)
      It doesn't work that way. Microsoft are not a "convicted monopolist". They were found guilty of ceertain anti-competetive practices in regards specifically to using their position as the market leader in Operating Systems to push Internet Explorer(along with some other things.)

      That conviction was mostly fluff because even the people who brought the suit in the first place don't have any actual resolution to the underlying problem short of "make Microsoft stop making Operating Systems so we can be a monopol
  • Aren't they just asset-stripping Yahoo!'s search business and throwing the rest back to die like a finless shark?

    (Though does anyone use Yahoo! Search? Come to think of it, does anyone use any Yahoo! properties other than Flickr and del.icio.us these days?)

    Still, at least then, Flickr won't be "upgraded" to an all-Silverlight/Windows Media service that integrates tightly with the Windows 7 desktop or something.

    • by JSBiff (87824)

      "(Though does anyone use Yahoo! Search? Come to think of it, does anyone use any Yahoo! properties other than Flickr and del.icio.us these days?)"

      I think a lot of people still use Yahoo! Mail, and finance.yahoo.com (their financial info website; the finance site is really well done, as far as I can tell, and I don't think Google has anything that quite compares to finance.yahoo.com).

      I mostly stopped using Yahoo search a long time ago, though occasionally I'll try it to see if it gives me different results t

  • as microsoft is, your only method of competition is cash and discomfort. The internet has always, and will always be something just out of reach for them.
    for the love of god, dont develop additions to something youve ignored and tried to buy for the last 10 years, it will only fail. Silverlight will never have the dominance flash has, Live search will always suck by comparison to google, and for gods sake MSNs page does everything newscorps fox.com does short of hurl dickpills and ab workouts at me (but t

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