Rumors Flying On $20 Billion Microsoft Offer For Yahoo

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.

Sounds like pump-n-dump

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

Re:Sounds like pump-n-dump

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.

Re:Sounds like pump-n-dump

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

Re:

Microsoft doesn't want Yahoo. It wants Yahoo out of the way.

Re:Sounds like pump-n-dump

Microsoft wants Yahoo patent portfolio.

Re:Sounds like pump-n-dump

Correct, Yahoo owns a great deal of Google stock due to the patent dispute around online marketing.

Why Google is not taking care of this is kind of beyond me.

Re:Sounds like pump-n-dump

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?

Re:Sounds like pump-n-dump

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:

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].

Re:Sounds like pump-n-dump

Takeover offers are always, ALWAYS at a large premium to current share prices. This is what entices the shareholders to sell their shares to Microsoft (or whoever).

Hmmm.

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.

Feds won't allow it

They better get their sale concluded before next year.

Hostile takeover

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.

Re:Hostile takeover

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.

Re:Hostile takeover

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.

Re:Hostile takeover

Jerry Yang is the reason Yahoo is in the toilet

Uh, probably not. Over past 12 months Yahoo! is down 60%. But guess what? AMD is down 80%, the Dow is down 40%, Sun is down 85%, MSFT themselves are down 45%, even Apple is down 50%.

Shall we blame Jerry for 12 months of decline across the board?? If you correct for the market downturn, even just the Dow index, then Yahoo! has barely dipped.

(Actually the offer was made around 1 Feb, but the dips since then are about the same.)

Yahoo is not an end-all solution...

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.

Why?

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?

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.

Re:Why?

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!

Re:Why?

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?

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?

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.

Go away, leave us alone

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.

Re:Go away, leave us alone

The bleeding will stop far short of that

Microsoft isn't bleeding. It saw a modest growth in profits in its first quarter of FY 2009. If holiday sales are poor this season. it is far better positioned than most to weather the storm.