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Yahoo Ends Talks With Microsoft, Embraces Google Instead

Posted by timothy on Thu Jun 12, 2008 04:56 PM
from the oh-google-you're-so-good-to-me dept.
Yahoo! Google Microsoft The Almighty Buck
snydeq writes with a story from InfoWorld which says that "Yahoo has ended its talks with Microsoft and is instead nearing an agreement with Google. Yahoo's purported reason for breaking off the talks? That Microsoft was only interested in purchasing Yahoo's search business, not all of the company. 'Such a transaction would not be consistent with the company's view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo stockholders,' the company said in a statement. The deal with Google allegedly involves Yahoo's search advertising business. The move likely will draw more ire from Icahn and may in fact remain part of the elaborate poker game between the two companies. Microsoft said this alternative transaction remains on the table and did not confirm that talks between it and Yahoo have concluded." Update: 06/12 23:58 GMT by T : CWmike writes "Just hours after saying it ended talks with Microsoft, Yahoo announced that it will start running advertising from Google alongside Yahoo search results. Yahoo expects the deal, which has a 10-year term, to generate $250 million to $450 million in operating cash flow during the first 12 months."
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[+] Why Yahoo Turned Microsoft Down 161 comments
quarterbuck writes "The NYTimes has up a great blog post that explains a bit of the backstory behind the Yahoo-Microsoft No-deal. While Jerry Yang did not want to sell the company, it is not likely that he could have said No to Microsoft, and explained it to shareholders, without the help of Google. The article gives reasons behind Google's tossing a lifeline to its biggest competitor, and the 'coop-etition' that has been going on between the two companies, which both emerged out of Stanford University."
[+] News: Carl Icahn Takes on Yahoo's Board 279 comments
narramissic and several others have written to point out that Carl Icahn has initiated a proxy battle with Yahoo's board of directors over their rejection of Microsoft's bid for the company in February. Icahn has purchased millions of Yahoo shares over the past week and assembled a group of nine other investors (including Mark Cuban) to persuade the board to resume talks with Microsoft. Yahoo remains unimpressed. Icahn's letter to Yahoo accuses: "It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet."
Firehose:Yahoo Ends Talks With Microsoft -- Embraces Google by snydeq (1272828)
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  • LULZ (Score:5, Funny)

    by Recovering Hater (833107) on Thursday June 12, @04:58PM (#23770275)
    Because that is just want Microsoft wants to hear. Yahoo is teaming with Google. Burn baby burn.

    • Re:LULZ (Score:5, Insightful)

      by WilyCoder (736280) on Thursday June 12, @05:01PM (#23770315)
      Would a Yahoogle monopoly be any better than an MS one?

      I'm not a MS supporter (or troll), that was an honest question...

      • Re:LULZ (Score:5, Funny)

        by Anonymous Coward on Thursday June 12, @05:08PM (#23770427)
        Of course not. But a GOOHOO! monopoly... then we'd need to worry.

      • Look on the bright side (Score:5, Funny)

        by Joce640k (829181) on Thursday June 12, @05:47PM (#23770927) Homepage
        At least there'll only be one toolbar to remove from people's browsers...

      • Re:LULZ (Score:5, Insightful)

        by Chyeld (713439) <chyeld@@@newsguy...com> on Thursday June 12, @05:54PM (#23771013)
        If it allowed Flikr integration with the rest of Google, hell yeah.

        That's about the only Yahoo! service that I still consider superior to Google's offerings.

        Superficial reasoning aside, yes and no.

        On one hand, a Goo-ho! would involve diluting the corporate culture of Google, risking it becoming less of a company that I look up to as an example of how to be successful and ethical. That would be bad. On the other hand, these two companies could actually mesh well when you consider WHAT they provide. The resulting conglomeration would have about the best of most of the 'big' web services that are offered out there.

        A Yah-soft would just be the next interation of Microsoft Live! before it tanked yet again due to poor manaegment and a lack of any discernable goals other than "we need to be out there, doing... something!"

        • Re:LULZ (Score:5, Insightful)

          by tknd (979052) on Thursday June 12, @07:04PM (#23771743)

          I think you missed the main issue that deals with web marketing--a topic that most geeks on slashdot are not familiar with. The problem with Yahoo siding with Google is that it helps establish Google as the king of search and online advertising. All three services (Google, Yahoo, MSN) make a huge chunk if their revenue through online advertising and marketing services. Since Google will now have it's hands toying around with Yahoo, Google could just slowly eat away at Yahoo's margins or eventually buy them out. That would leave the last significant competitor as MSN which isn't even much of a competitor. The end result is basically a Google monopoly on web marketing until the next big disruptive marketing tech comes along.

          Google's online marketing market share is already so significant that most web marketing firms won't even touch Yahoo or MSN networks because the effort is simply not worth the return. But now you say if I go through Google I'll also get a piece of Yahoo? Big win for Google.

          In this situation, I think Yahoo honestly had a choice between two devils with different faces. They may have royally pissed off their shareholders with shrugging off MS, but they may keep their company alive for a little longer.

          As far as my own opinion, I'm split. On one side as a consumer, I think there needs to be more web marketing competitors to compete with Google in order to maintain a healthy market. On the other hand I am a Google shareholder. I suppose in this case I win (and lose) either way.

      • Re:LULZ (Score:5, Interesting)

        by UnknowingFool (672806) on Thursday June 12, @05:32PM (#23770765)
        But does having one target now help MS in any way? They knew Google was their main competition. If they could beat Google, they could beat Yahoo. The problem was that they couldn't beat Google. Maybe as a consolation they could beat Yahoo but going for 2nd place is admitting defeat too.

        • Re:LULZ (Score:5, Insightful)

          by DarkOx (621550) on Thursday June 12, @06:45PM (#23771589)
          I don't think it was about going for second. I really think Microsoft really wanted Yahoo as a way to compete with Google. Yahoo does in fact have lots of interesting tech, like pipes, as well as an entire suite of superior web portal offerings with a decent advertizing and anyalitics business to go with it. MSN is at the bottom of the heap from a tech prespective, but at the top as far as resources its parent company could put into it; that is if they had some direction to go in. Yahoo technology and its brand could have given that to Microsoft, and they might have been real competition for Google in its core spaces had they aquired Yahoo. Yahoo on the other hand does not have the capital or market position to keep on pace with Google and will continue to faulter without something to save them. Sure it could be something amazingly inovative and market shifting; or it could be a large pool of Microsoft Money(pun entended) that would enable them to take what they have and make it substantially better.

          Microsoft tried as they always do to manipulate the market place and get themselves a sweatheart deal rather then playing a more "fair game" as fair as large cap market stock deals get anyway. They ended up souring the deal. I think it was bad business on their part. They should have made a fair offer and done the deal. Sure Yahoo got hurt more then Microsoft did but thats not what it was about. Microsoft really lost an oppertunity they wanted, no matter how the outsiders and small investors see it, the Microhoo fiasco was a failure of Microsoft's.

          I don't know what Google gets outa Yahoo other then sheer mass. I don't think Yahoo represents the top drawer tech when compared with Google. Yes there is some good Yahoo technology that Google can assimilate easily, but its probably not worth what Google has to pay. The brand and portal offerings are of little value to Google becase theirs are already better. To Google's credit though they have gotten quite big and demonstrated from a leadership standpoint they can manage the mass. If you are going to tangle with an 800lb gorrilla like Microsoft, being a 600lb gorilla rather then the 500lb you already are might give you that little bit of extra inertia needed to prevent Microsoft from steam rolling you by tring to take the web proprietary again with dotNet, still more activeX, and silverlight.

  • Not surprising... (Score:5, Insightful)

    by ConceptJunkie (24823) on Thursday June 12, @05:03PM (#23770351) Homepage Journal
    Given that MSN search is horrible, I can see where MS would want to vulch that one piece of Yahoo, and that probably wouldn't run afoul of anti-trust laws. In any event, as a huge fan of Flickr, I'm glad there is no longer a serious threat that my beloved photo service will succumb to Redmondian rapine.

    And of course, it's highly plausible that this whole effort from Microsoft was intended solely to serve their own interests by creating the perception they were going to acquire, and they never intended to go through with it, for whatever arcane market reasons.

    Programming is simple. Business is complicated.
  • Or does this mean that both Google and Microsoft are gathering their own Borg collectives. I am so confused. Someone get me a glass of water, something with a snazzy brand name please....
  • Please, Google, don't incorporate anything from Yahoo. Please. I'm beggin' you.

  • If these were any other two companies... (Score:5, Insightful)

    by Thai-Pan (414112) on Thursday June 12, @05:46PM (#23770925) Journal
    ...would we be seeing the same reaction on Slashdot?

    Seriously, imagine if Apple were trying to acquire, for instance Transmeta, (purely hypothetical) and offering a 45%+ premium. And Transmeta in response turned it down and set up internal policies to make generous severence payments to employees who chose to leave after the acquisition.

    What do you call that? I call it gross breach of fiduciary duty to your stockholders. I am fortunately not a Yahoo stockholder, but if I was, I'd be pretty pissed about this.

    • Re:If these were any other two companies... (Score:5, Insightful)

      by myowntrueself (607117) on Thursday June 12, @07:30PM (#23772043)
      I think that stockholders are only interested in one thing; making great steaming gobs of cash as fast as possible.

      They take no pride in the company in which they have stock.
      They don't care about employees or customers.
      They have huge great dollar signs in their eyes and cannot see past them.

      They would gladly fuck it to death for all the money they can and then dispose of the corpse.

      That, my friend, is 'fiduciary duty'. Fuck 'em to death, wring the cash out then wash your hands and move to the next target to suck the life out of.

    • Re:What Yahoo Wants? (Score:5, Insightful)

      by pak9rabid (1011935) on Thursday June 12, @05:14PM (#23770501)

      So first Yahoo doesn't want MS to buy them out. Next they don't like the fact that Microsoft only want part of the assets(instead of the entire company). Really, what does Yahoo wants?
      Sounds like to me the CEO of Yahoo doesn't want to sell out to Microsoft, but also doesn't want to be crucified by the board for not selling out to someone. Google seems like an attractive option for him, if that's the case.

    • Re:Here's an idea (Score:5, Insightful)

      by ArhcAngel (247594) on Thursday June 12, @06:00PM (#23771075)
      Why doesn't Microsoft just use their huge amounts of money and work for it, where is their internal drive and passion?

      QDOS -> MSDOS
      MAC OS -> Windows
      Spyglass -> IE
      BSD TCPIP stack -> Spider stack -> Windows NT stack
      JAVA -> J+ -> J#
      Flash -> Silverlight

      You must be REALLY new here!

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