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Businesses The Internet Yahoo! Technology

Shareholder Backs Yahoo!, Supports Independence 149

Posted by Zonk from the settle-back-folks-going-to-take-a-while dept.
mikkl666 writes "In a follow-up to yesterday's story about the struggle between Microsoft and Yahoo!, major Yahoo! shareholder Legg Mason has announced that they are ready to back the company in their effort to keep out of Microsoft's grip. According to portfolio manager Bill Miller, 'the problem is Microsoft blundered with the letter this weekend. Telling the shareholders you're going to take something away from them is not a way to get their support'. Nevertheless, he believes Microsoft will end up paying what it takes to own Yahoo."
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Shareholder Backs Yahoo!, Supports Independence More

Shareholder Backs Yahoo!, Supports Independence

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  • Bummer (Score:5, Funny)

    by garett_spencley ( 193892 ) on Wednesday April 09, 2008 @01:35PM (#23015620) Journal
    So no Yahoo! logo dressed up as a borg then ? :(

  • What is MS hoping to gain exactly? (Score:4, Insightful)

    by jfbilodeau ( 931293 ) on Wednesday April 09, 2008 @01:42PM (#23015700) Homepage
    Is it just me, or is there only chaos and mayhem in store if MS tries to merge with Yahoo? They are two incompatible business and I can't see what MS would gain from their multi-billion dollars 'investment'. Why does IBM & Lotus come to mind right now?

    • Re: (Score:3, Insightful)

      by Amouth ( 879122 )
      i doubt i would consider it a "merge" of the compaines.. i doubht MS would ever really merge.. they would buy and then partion it out and let it rot..

      unless MS is don't noting but tasking a couple of spare MS people to throw out crazy offers at yahoo to cause PR and basicly make yahoo lose concentration as a company on what it is they should be doing..

      trust me when you work for a large company and there is a rummor of a buyout no one gets anything done really..

      i could see MS doing this.. why i don't know..

    • Re:What is MS hoping to gain exactly? (Score:5, Interesting)

      by explosivejared ( 1186049 ) <hagan.jaredNO@SPAMgmail.com> on Wednesday April 09, 2008 @01:47PM (#23015742)
      Is it just me, or is there only chaos and mayhem in store if MS tries to merge with Yahoo?

      Well that's what everyone around here is hoping. As for the other part of your post, this has nothing to do with technology. It has to do with market positioning and mind share. Microsoft wants to consolidate the online Yahoo! brand, which has a big following, with the MSN brand, which has had mixed results. This consolidation, in Microsoft's mind, will prime them for competition with Google.

      If Microsoft aquires yahoo, then you can be sure that all of yahoo's open source stuff will be buried unceremoniously. So from a technical standpoint, it probably is a nightmare for yahoo, but, again, this isn't about technology. It's all about marketing.

      • Re: (Score:2)

        by devjj ( 956776 )
        I would go one further and say it isn't about technology or marketing, but rather established mindshare. If it were solely about marketing it would be Microsoft trying to get Yahoo! in order to attract more people. What it's really about is Microsoft buying customers. They don't have to win anyone over if they buy the thing lock, stock, and barrell. What Microsoft isn't taking into account is the number of people who will jump ship when that happens. Many people will live on principle alone.
        • Many people will live on principle alone.

          That sure is some good crack you're smoking. I would have accepted some, but many? Many is the amount of people who won't even notice when MS buys out Yahoo.
          • the amount of people who won't even notice when MS buys out Yahoo.

            That number of people is steadily shrinking as Yahoo fights for independence. i think they should have a marketing campaign boasting about their fight against a MS buyout. They will automatically be the good guy because everyone knows that a corporate takeover, lots of people loose their jobs, and the job market is already so shaky that MS can't help but look like greedy evil bastards in the public eye.

          • Re: (Score:2)

            by devjj ( 956776 )
            Tell that to the people who use flickr.

        • What it's really about is Microsoft buying customers. They don't have to win anyone over if they buy the thing lock, stock, and barrell. What Microsoft isn't taking into account is the number of people who will jump ship when that happens.

          Yea, I use Yahoo! mail and am a member of some groups on Yahoo! I, like others I've heard from, will simply switch to other websites if MS ends up buying Yahoo!. Also Yahoo! is a supporter of some Open Source projects, like Zimbra [brianmcnitt.com] the open source app that replaces MS

      • Re: (Score:3, Interesting)

        by peragrin ( 659227 )
        That's the point actually MSFT has a horrible track record when it comes to actually using purchases. MSFT will abuse Yahoo until it no longer exists, change it, mold it until it looks like Windows Live and Hotmail.

        The only thing Yahoo has that MSFT wants is customers for their online services. If MSFT wants customers it should try competing for them in an open market place instead of just trying to buy them.
        • Well, Yahoo has a market position that could allow MS to push it's products along. Take Yahoo games for instance, most of them can be played on winXP win2000 as well as Vista. So what if an update only allow them to be played on Vista? Lets say it isn't all of them at once but 20% of the popular ones a quart with all of them moving after 1.5 years of so.

          This would present a situation where XP doesn't do everything the customer wants it to do and will cause either an upgrade or purchase of a new computer pre

          • Well, Yahoo has a market position that could allow MS to push it's products along. Take Yahoo games for instance, most of them can be played on winXP win2000 as well as Vista. So what if an update only allow them to be played on Vista? Lets say it isn't all of them at once but 20% of the popular ones a quart with all of them moving after 1.5 years of so.

            Because it's so easy for an online gamer to switch websites MS would lose more by requiring Vista than it'd gain in people buying the OS. No, I think MS

            • Don't underestimate the power of the 1200 dollar deck of cards. I think it was Jeff Foxworthy who said he purchased a computer because it was all the rage and discovered after a year or so, that he had a $1200 deck of cards.

              What this means is that a lot of people primarily use their computer for specific tasks that could be easily replaced with a deck of cards or a board game. A lot of these people get hooked to a specific game and play with specific people and are used to the table chat from them for lets

              • Don't underestimate the power of the 1200 dollar deck of cards. I think it was Jeff Foxworthy who said he purchased a computer because it was all the rage and discovered after a year or so, that he had a $1200 deck of cards.

                While many may not switch some will. I'm a member of some Yahoo! groups and back when MS first made it's offer to Yahoo! I said I would as well as heard others say they would switch. Apple's growing market share has shown people will switch. After using MS products for about 10 yea

      • but Yahoo's value is in all that stuff. In some ways they are ahead of Google in that they have more people signed up and USING their services. Every Microsoft service I've tried that's been acquired has been dropped for lack of interest. When Microsoft started dropping accounts after a few weeks of inactivity I stopped trying. Please don't do that to Yahoo.

        Yahoo has problems integrating what they've assembled into something slick where Google does a very good job at making services work well together.
    • I think that since Microsoft has failed so miserably to enter into the "Internet Market Place" with MSN, they would like to try again by buying an established, more successful entity.

      What Yahoo! and most people who actually like Yahoo! fear is that Microsoft will buy Yahoo! then screw it up the way it has done with so many other endeavors such as Hotmail.com. And let's face it, for those who pay attention to Microsoft's reputation for success in new markets, it's an almost certainty that Microsoft will fai

      • Microsoft has lost billions of dollars on the XBox, and losses continue to mount. Worse, the original XBox played a distant second to the PS2 and it appears that the XBox360 will be upstaged by the Wii. Microsoft's investors don't think that the XBox is a success.

        • What drugs are you smoking? Yes MS has invested quite a bit in XBox. But in 2007 XBox was profitable!

          • What drugs are you smoking? Yes MS has invested quite a bit in XBox. But in 2007 XBox was profitable!

            That's an interesting statement. Where did you get your information? Microsoft's financial statements say that the Entertainment and Devices Division lost over $1.89 billion in 2007. $1.06 billion of which was a charge recognized for faulty XBox 360s, but that still leaves nearly a billion in losses.

            Now, for the first two quarters of 2008 the Entertainment and Devices Division has shown positive income of about $500 million (total). Even so Microsoft has lost over $4 billion on the Entertainment and

    • Re: (Score:3, Interesting)

      by ColdWetDog ( 752185 ) *
      What MS is hoping to gain has been extensively reported. Mostly it's an attempt to compete with Ballmer's Worst Nightmare - Google. What I find interesting is that a major stock holder who is presumably emotionally unattached from all the yapping and barking doesn't think it's such a good idea.

      (Legg Mason is a large Asset Management Firm [wikipedia.org]).

      Methinks the world in general would be better served if Mr. Ballmer upped his medication dose.

    • Re:What is MS hoping to gain exactly? (Score:4, Insightful)

      by UnknowingFool ( 672806 ) on Wednesday April 09, 2008 @02:17PM (#23016074)
      Yes there will be chaos. Many people like myself can see major problems in the merger.

      The first being the technologies. Yahoo tries to be platform agnostic. They use whatever works best and is cheapest. Right now they support a lot of BSD projects. Microsoft mandates Windows. The conversion of hotmail years back was a major hassle for MS. That was just one system. Yahoo is much larger than that. That conversion will take lots of time and effort.

      The second issue is the cultures. I offer no opinion on which culture is "better", but they are different. Now MS is coming in as a hostile takeover. That is not going to sit well with Yahoo employees. On the other side, MS people may not want to bring in Yahoo people.

      Third, large scale mergers like this almost never work. AOL-Time Warner. Daimer-Chrylser. Recent history has shown that failure happens more often than naught. And those mergers were approved by both companies involved.

      • Re: (Score:3, Interesting)

        by Captain Nitpick ( 16515 )

        Third, large scale mergers like this almost never work. AOL-Time Warner. Daimer-Chrylser. Recent history has shown that failure happens more often than naught. And those mergers were approved by both companies involved.

        Counterexample: ExxonMobil. Although the old Mobil employees still complain about the Exxon corporate culture.

    • Control of Yahoo's board, *without* buying them??? (Score:4, Interesting)

      by RexDevious ( 321791 ) on Wednesday April 09, 2008 @02:43PM (#23016350) Homepage Journal
      There's good argument that MS is only after market share, primarily in email where the acquisition would give them a monopoly - less so in search and web properties where it would only slow their loss. And there's no argument that MS is after technology - as Yahoo's stuff is run on open source platforms MS could leave in place for awhile; but certainly not publicly develop further.

      However... consider this scenario:

      1. Microsoft makes a huge bid for Yahoo that, while not clearly being in it's own best interests, clearly *is* in the best interest of Yahoo shareholders, and is far too large to be matched by anyone.
      2. Yahoo predictably resists the offer, to the point where it's arguably *not* acting in the best interests of it's shareholders.
      3. Microsoft uses this behaviour to wage a proxy fight to get Yahoo's whole board of directors fired and replaced with people it favours.
      4. Microsoft now essentially controls the board of a competitor, without ever having actually bought them.

      Now... however you feel about an actual acquisition of Yahoo by Microsoft - can we all agree it would make perfect sense for Microsoft to wrest control of Yahoo's board of directors - even if they had no intention of buying them?

      Can anyone shed any light on whether it would be possible for Microsoft to win a proxy fight without an iron-clad guarantee they'd buy Yahoo under the terms of their current offer; or if Yahoo could do something that would force them to should the offer be a whole or partial bluff to win a proxy fight?

      • I dont think you can include iron-clad garantees into a proxy vote.

        I mean its just an election, the party (in this case MSFT) tells you his candidates are better than the other's. What they do once they control the board is something else.

        Off course if Microsoft gain control of the board and then screw over those Yahoo shareholder than voted for them, they might be able to sue them, but that takes time and resources. Also I guess the SEC or the government might intervene if it gets really ugly.

        Also even if
      • The would probably win a proxy fight because those investors who have shares in Yahoo have more shares in MSFT. Thus for them it would be beneficial for MSFT to win.

        If MSFT does not win then this latest move by Yahoo to work with Google is pure boneheadedness. If Yahoo does not get taken over watch their share price collapse... And not just a little collapse, but whole honken collapse.
        • Why? Yahoo still has all of its international operations; the US market isn't the make-or-break. Heck, there's got to be somewhere where Yahoo is number 1 in marketshare.

        • The would probably win a proxy fight because those investors who have shares in Yahoo have more shares in MSFT.

          Except some of Yahoo!'s largest shareholders want Microsoft to raise it's offer before they will approve it: "Yahoo's second-largest shareholder says Microsoft will need to up ante [news.com]". "Legg Mason Offers Yahoo Some Support [webpronews.com]".

          Falcon

        • A Yahoo -Google merger could be cool. Google has great geek stuff, but their forward facing stuff is very dull and boring, YouTube is the only "hot" property, the rest is mostly geek toys branching off the search base.

            Yahoo has a great front end presence. Their page is fun for NORMAL people to go to. Lots of games, Flicker, groups are out front, things to do, etc. In a lot of ways they're ahead of Google but don't know what to DO with it because they have so much going on.

      • 2. Yahoo predictably resists the offer, to the point where it's arguably *not* acting in the best interests of it's shareholders.

        Except some of Yahoo!'s largest shareholders want Microsoft to raise it's bid: "Yahoo's second-largest shareholder says Microsoft will need to up ante" [news.com]. Legg Mason Offers Yahoo Some Support [webpronews.com].

        Falcon

    • Re: (Score:2)

      by Alioth ( 221270 )
      Microsoft isn't trying to merge with Yahoo, they are trying to take Yahoo over. A bit like Boeing did to McDonnell Douglas - buy them out and then shut them down. The value in buying Yahoo is to eliminate a competitor in the search arena, eat their marketshare, and go after their holy grail which is to next destroy Google.
    • They would not merge, I think this is just a tactic to destroy Yahoo. On another thread I was reading that yahoo is a headhunter's paradise right now, almost all of the top developers have already left, it's just the grunts that are left.

    • Is it just me, or is there only chaos and mayhem in store if MS tries to merge with Yahoo? They are two incompatible business and I can't see what MS would gain from their multi-billion dollars 'investment'.

      Microsoft is trying to get into net, online, advertising and by buying Yahoo! they'll become #2 in ads, behind Google.

      Falcon

  • I'm confused... (Score:2, Funny)

    by Anonymous Coward
    Does Yahoo have really aerodynamic chairs or something?

    • Re: (Score:2, Funny)

      by BrentH ( 1154987 )
      The real question is whether Yahoo has lavadynamic chairs. Ballmer is Satan after all, and I suspect most of Microsofts chairs have turned to ashes in the lava surrounding Ballmers Altar. And the helperdevils apprently havn't come up with a good solid chair that can stand the heat yet, and I think the reasoning is that, because of all the red in Yahoos brandname, Yahoos chairs may be more resilient to the lava. Thus it makes real good business sense to take over Yahoo, because, you know, then you get all

  • For god's sake, think of the games (Score:5, Funny)

    by peipas ( 809350 ) on Wednesday April 09, 2008 @01:43PM (#23015704)
    I've said it before, if Microsoft eliminates Yahoo Cribbage I will kill myself.

    Do you want that blood on your hands, Microsoft?
    • Yahoo! is currently the king of fantasy sports games (hey, fantasy sports = fantasy rpg in coolness) and it would be atrocious to see those disappear. Beautiful interface, quality, accuracy. These aren't generally MS stregnths.

    • Re: (Score:3, Funny)

      by explosivejared ( 1186049 )
      You clearly aren't familiar with the Great Netscape Mass Suicide Event. 100,000 dead in minutes. I hear Ballmer watches it every Christmas.
    • Yes. We are bloodsuckers and we want your blood.

      Signed: Microsoft.

  • Microsoft gains nothing except reduced competition (Score:3, Insightful)

    by Bryansix ( 761547 ) on Wednesday April 09, 2008 @01:48PM (#23015754) Homepage
    Microsoft will gain no synergy from this acquisition. If anything they are just gaining redundancies. This is just the extinguish part of their business.
    • Eh. Google gained nothing but redundancies by buying YouTube, but I'm not quite ready to call that a bad move.

      Microsoft does make some pretty boneheaded business decisions, but this one is too soon to call definitively.

      • Re: (Score:3, Insightful)

        by hkgroove ( 791170 )
        I don't think so. Google consolidated redundancies if anything (even with keeping Google Video) and possibly created a better bargaining chip for the future of the video market when dealing with networks and the like.

        Whether or not it worked for the better is a different matter altogether.
    • Actually, they would gain flickr (I mentioned this in the flickr discussion [slashdot.org] as well... and probably better suited here...). Granted that's only a part of yahoo, it's probably a good stream of revenue for Yahoo and one of the few that people will actually pay to use; getting away from the advertising business model.

      There is also a lot of data (personal and otherwise) on flickr. flickr can almost be a myspace / facebook, but without the idiots as it has one purpose (photography) and not spread thin over
  • The more you tighten your grip, Tarkin....

  • Typical MS Arrogance (Score:5, Informative)

    by amplt1337 ( 707922 ) on Wednesday April 09, 2008 @01:55PM (#23015838) Journal
    They're approaching a Yahoo! acquisition with all the grace of the Mongols taking over a medieval village -- "If you let us in, you'll get a rough deal; if you resist, you'll get an even rougher one."

    All it takes is for a couple more major shareholders to insist that Yahoo! is worth more than MS wants to pay, and the bluff will be very effectively called; you can't do a hostile takeover [wikipedia.org] if you can't find shareholders willing to sell a controlling interest, and the shareholders are ultimately the ones who would suffer from an overly low valuation. Sure, maybe the Board is holding out for an unduly high valuation, but more likely MS is mis-valuing Yahoo! -- though I'm sure Yahoo!'s value would drop to whatever MS paid for it pretty quickly, if Ballmer really wants to get this far out of the company's core business.

    All the more reason for major shareholders to turn their noses to the deal.
    • "You've got two choices. We can do this the hard way, or we can do this the REAL hard way."

    • Yes.... (Score:2)

      by jd ( 1658 )
      But all Microsoft has to do is find a senior manager or two who have significant stock and are disgruntled. Bound to be plenty of those. Microsoft then makes them a job offer with much better pay. Cheaper than buying the stocks directly. Not sure if they can buy stocks directly, but if they can, again, that would be cheaper than buying all the stock. A third option is for Microsoft to act in ways that deliberately drive Yahoo's stock value down and use the threat of financial loss to intimidate shareholders
    • For the village.

      At the end of the day, most shareholders don't have sentimental attachments to their stock (that's the first deadly sin of playing the market). If they get a good price they'll take it.

      • Except they're not. [infoworld.com]

        MSFT was hoping to buy at the equivalent of $31/share, though they're offering less as their stock slips; YHOO is currently trading at (conservatively) $27.50, and if you think Microsoft can dump several billion dollars' worth of demand into the common market without spurring that trading price up at least $3.50 per share, you're overly optimistic.

        Microsoft is simply going to have to pay more, despite their threats to the contrary. Admittedly the Yahoo! stock may be trending up because o
        • Actually you are wrong here. Microsoft does not need to pay more. Wait until Microsoft pulls out. You will hear that great big hissing noise calling Yahoo collapsing... And the worst part is that there will be shorts from all of the wood work coming out.

          This is s short opportunity where you could get an instant 50% return. That will make anybody salivate...
    • No I think you will see that shareholders will like MS value. This Legg Mason is crying sour grapes because he has more shares of Yahoo than Microsoft.

      Seriously if you look at the shareholders you can see that those in favor have more Microsoft shares, and those not in favor have more Yahoo shares.
  • If you're like me, you don't want MS to get ahold of your ancient Yahoo mail account.  Not that I trust Yahoo implicitly, but I don't trust MS at all.

    So I plan on springing for the $20 for POP access to the account, so that I can retrieve/delete the decade's worth of email I have in there.

  • Go for it Bill! (Score:5, Insightful)

    by pegr ( 46683 ) * on Wednesday April 09, 2008 @01:59PM (#23015876) Homepage Journal
    While I would hate to see Yahoo! bite the dust (more for historical reasons), it would be great for MS to flush a stack of cash, as I can see MS doing nothing but destroying what little is left of them.

    Yes, MS, cash out everyone still hanging on to that sinking tub! The faster MS runs out of cash, the sooner we get to enjoy a world without them.

    As for Yahoo!, I remember when you all didn't suck. Yep, you and HP...

    • The faster MS runs out of cash, the sooner we get to enjoy a world without them.

      You haven't seen the SCO trial, have you? An organization can go for YEARS without any money as long as the a-holes running it have enough personal wealth to pilot their sinking ship.

    • Re: (Score:2, Informative)

      by maxume ( 22995 )
      Microsoft is awash in not just cash, but income:

      http://finance.yahoo.com/q/is?s=MSFT [yahoo.com]

      The make a net income in excess of $1 billion a month. They would recover from a disastrous deal in less than two years(because they have $19 billion in cash; 19+24=43, close enough to the offer of $45 billion)

      They are trying to acquire Yahoo because they think it is a cheap way to gain revenue and they think they can operate Yahoo more effectively than Yahoo is currently operating Yahoo. Maybe they can't improve Yahoo all t

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      What little is left of them?? A world without them? Are you kidding? If you're expecting this deal to cripple them AND you're arguing that this would be a Good Thing, you're wrong on both counts.

      A quick perusal of their investor relations site ( e.g. http://www.microsoft.com/msft/earnings/FY08/earn_rel_q1_08.mspx [microsoft.com] ) would tell you that they're experiencing phenomenal growth and that they have a profit margin enjoyed by very few large companies. To argue that MS is somehow on it's last legs is ridiculous.

  • What is Yahoo Worth? (Score:5, Interesting)

    by RobBebop ( 947356 ) on Wednesday April 09, 2008 @01:59PM (#23015880) Homepage Journal

    Yahoo! [yahoo.com] is currently maintaining a $36 Billion dollar market cap. It goes without saying that deciding what an internet company is worth is somewhat shaky ground, but they are profitable by $0.47 per share in the last year and they have a set of managers who are clamoring that they have a lot of new revenue streams that are going to materialize in the next year or two.

    So, what is Yahoo! actually worth if Microsoft's offer isn't good enough? $40 Billion? $50 Billion? $60 Billion? $100 Billion?

    Can anybody defend their valuation with some finite analysis that goes beyond pulling numbers out of thin air? Furthermore, can somebody figure out how much Microsoft would be willing to pay based on the benefits that merging Yahoo's customers and properties into their own would produce?

    If you look at the 5-year chart for MSFT [yahoo.com], it is pretty clear that they have done a good job of maintaining the status quo... while the only real marketable success that they have enjoyed during that time has been the introduction of a competitive video game system.

    On the other hand, the 6 month chart for Google [yahoo.com] is suggestive that the future value of internet based ad revenue isn't worth nearly as much as it used to be.

    So, what gives?

    • while the only real marketable success that they have enjoyed during that time has been the introduction of a competitive video game system.
      depends on how you define competitive. IIRC, they're selling the console at a good bit below cost. then again, i'm fairly sure sony is selling the ps3 below cost also, though i believe nintendo is making a profit on each wii system.
      • The xbox division is actually turning a profit these days.

      • Re: (Score:2)

        by p0tat03 ( 985078 )
        Actually, I do believe that the Xbox production costs are down far enough that MS is turning a (slight) profit on each unit. Not to mention that the attach rates for the console (games sold per console) are better than expected, which drives 3rd party support, and gives MS a healthy chunk of the pie. The Xbox division, profitable or not, is looking pretty healthy.

    • Re: (Score:2)

      by Fastball ( 91927 )
      I don't think you can draw the conclusion that internet based ad revenue is less valuable by looking at the charts. Google's problem is their burgeoning expenses and the fact that it is hard for any company to grow 30% in perpetuity.

      Online advertising is set to grow 23% this year [google.com]. Better still, it is expected to double in just four years to about $40 billion. Better than a sharp stick in the eye.

      MSFT has held serve because of their massive cash flow from sales of Windows. However, that cash cow is diminishi

      • Re: (Score:3, Interesting)

        by RobBebop ( 947356 )

        Better still, it is expected to double in just four years to about $40 billion. Better than a sharp stick in the eye.

        So they think they can capture 50% of the $40 Billion revenue per year in 2012 (assuming they can split it with the other major competitor), instead of 20% (if they are fighting against both Google and an independent Yahoo!).

        I like it. Your reason gets a gold star. Yahoo! will help MSFT capture revenues of $20 Billion per year of internet advertising revenues instead of $8 Billion per year in only a matter of several years. Subtract out the costs, and owning Yahoo! might generate an extra $30 Billion

    • Re: (Score:2)

      by rtechie ( 244489 )
      The short answer is that Legg Mason is just angling for more money.

      Senior management at Yahoo! obviously doesn't like or want the Microsoft buyout because they know that most of them will be fired by MS due to their poor financial management of the company. They're supposedly trying to fight the deal. In reality, they've already given up and are trying to stall long enough to gut the company by pissing away money and offering absurdly generous severance packages to employees (2 years pay with benefits and n

  • It's a start (Score:2, Insightful)

    by value_added ( 719364 )
    From the fine article:

    A major Yahoo Inc shareholder, Legg Mason, is ready to back Yahoo's effort to stay independent if Microsoft Corp lowers its buyout offer, the Wall Street Journal said, citing an interview with portfolio manager Bill Miller.

    Seems to me that adds up to vote count of 1 against, and an undetermined number in favour of the buyout.

    I have no idea who Legg Mason is, or what influence he has, but it is possible he's a Carl Icahn type and his actions may be an important factor. That said, my gu

    • Re:It's a start (Score:5, Informative)

      by RobBebop ( 947356 ) on Wednesday April 09, 2008 @02:08PM (#23015970) Homepage Journal

      I have no idea who Legg Mason is, or what influence he has

      Legg Mason is an investment firm that owns a 6% stake [yahoo.com] of Yahoo.

      This is actually 83,843,501 votes AGAINST the current MSFT offer.

      • "This is actually 83,843,501 votes AGAINST the current MSFT offer."

        Uhm, no. it's 1 vote. 1 vote which happens to have a 6% share of the total, or 83,843,501 shares. That doesn't make it 83,843,501 votes.

        As much fun as movies make it to say that somebody has 1 million reasons (dollars) to kill somebody, you shouldn't apply that to general life. If nothing else, the U.S. electoral college should have taught you that.

        • A 6% stake of the votes is fairly powerful, especially if a certain percentage of the shareholders don't even bother voting.

          I do not, however, understand the subtlety that you are trying to suggest that makes this parallel to the electoral college. The popular vote versus the votes cast by the representatives of the state do not (to me) seem to be correlated to the votes cast during shareholders during a hostile takeover.

        • Re: (Score:2)

          by jsight ( 8987 )

          "This is actually 83,843,501 votes AGAINST the current MSFT offer."

          Uhm, no. it's 1 vote. 1 vote which happens to have a 6% share of the total, or 83,843,501 shares. That doesn't make it 83,843,501 votes.

          As much fun as movies make it to say that somebody has 1 million reasons (dollars) to kill somebody, you shouldn't apply that to general life. If nothing else, the U.S. electoral college should have taught you that.

          This is the weirdest argument that I have seen on the internet in a while, and that's a diffic

        • So if I owned 1% of Yahoo, I'd get one vote, too? So we'd each have one vote, and if our votes differed (and everyone else abstained), it'd be a tie? Even though his one vote is six times the size of mine?

          Math. Get you some.

          • Even better... If their 6 is equal to your 1, then 6=1.
            From there, all numbers become equivalent... and the only observable differences between atoms are the numbers if their constituent parts and how they're arranged (angles and such)... everything becomes equal.

            The sun is then made of peanut butter! yum
        • I'll just reply to myself seeing as you can't reply to 4 people at once.

          Get some math me - thanks, will do. Oh wait, math doesn't have anything to do with what I said.

          Electoral College - 'll demonstrate, and point out why I'm not comparing it directly to shareholder stakes but to the general concept.

          Here's the deal... I know that in shares, people with more shares have more swing. I'm certainly not disputing.

          I'm also guessing that for whatever reason, they decided to say that each share would be termed to
          • I still don't think you're saying what you think you're saying.

            The more equivalent transaction would be 4 of us pitch in for the movies, and decide before hand that the decision is made based on the majority rule based on the money involved.

            Assume 3 folks pay $6, and I pay $15. (ignore rounding errors)

            You can describe that as I get a 45% share of the single outcome, compared to their 55% of the single outcome. We each got one vote, they were just weighed differently.
            You can equivalently say there were 100
      • Legg Mason also likely has a board member with a 6% share. Yahoo's board is elected from scratch every year, so all Microsoft has to do is win just one proxy election to seize majority control of Yahoo.

        More likely Legg Mason is worried that Microsoft may actually conduct a hostile takeover for a lower price than the friendly price. (Microsoft's lower price would actually makes sense; Yahoo would probably be worth less after a hostile takeover.) Legg Mason probably doesn't care on the face of things wheth

  • Integration = death march for MSFT (Score:3, Interesting)

    by Fastball ( 91927 ) on Wednesday April 09, 2008 @02:02PM (#23015902) Journal
    Two very divergent cultures. I think it is a lose-lose for MSFT. Get the deal done, and they become mired in a prolonged integration while adding significant debt to their balance sheet. The deal falls through and they are still left with an eroding cash flow (Windows) and problems with execution in virtually everything else they are in.

    It is fascinating. You have two dinosaurs from two different periods. The Windows OS boom during the late 80s to mid 90s for MSFT and the internet boom during the mid 90s to early 00s.

    I'm not expecting the best of times for either company, but unlike most folks, I'd bet on Yahoo for an appreciation 5-10 years out from now. MSFT is almost like a energy MLP. Everyone gets paid...until the resource runs out.
  • If I despise both companies should I be for or against a merger?
  • If the shareholders are behind the board on this one then perhaps now would be a good time to enact a poison pill [wikipedia.org] to make any hostile takeover a very bitter pill indeed for Microsoft to swallow.
  • It's really not a resounding no to the merger, the basicly said we won't support any sort of deal if MSFT lowers the offer. They also said if you pay an extra $1 a share we'll support your takeover 100%.
  • They've realized their future in the Operating System market is pale at best.
    Remember the EU court's decision about Microsoft being a monopoly? Well this was on Sep 2007. Is it a coincidence that less than 5 months later Microsoft offered to buy Yahoo!? I think not.

    Sooner or later Microsoft would have to lift the veil [boston.com] on the APIs for their most popular products, and *anyone* (including GPL software developers) can read them. Microsoft knew this day would come, and their desktop market dominance will be dest

  • Could spell trouble... (Score:3, Insightful)

    by imstanny ( 722685 ) on Wednesday April 09, 2008 @02:37PM (#23016270)
    The same thing happened to Cablivision, when the Dolan family wanted to buy them out for $36/share. Some major shareholders like ClearBridge Advisors, who owned 31.4 million shares at the time, or 13.6 percent of Cablevision voted against the buyout. When the buyout didn't go through, price fell to $30, and is now ~$23/share.

    Remember, Yahoo was trading at ~$19/share, before Microsoft's offer inflated the price to ~$31. Microsoft, essentially, bid up the price. If the merger is voted against, the price will likely fall back toward $19 (I say this because aside from Microsoft's offer, nothing materially changed with Yahoo. In fact, they are projected to miss their quarter numbers which they will be reporting in a couple of weeks).

    Also, Microsoft can start buying up Yahoo shares on the open market in a hostile bid (from Shareholders willing to sell their shares), which are currently trading below $31/share. So I wouldn't be surprised if Microsoft will get Yahoo below their current offer...

    • Remember, Yahoo was trading at ~$19/share, before Microsoft's offer inflated the price to ~$31. Microsoft, essentially, bid up the price. If the merger is voted against, the price will likely fall back toward $19

      The buyout, buyout not merger, was voted against yet Yahoo! shares closed at $27.77 [google.com] today.

      Also, Microsoft can start buying up Yahoo shares on the open market in a hostile bid (from Shareholders willing to sell their shares), which are currently trading below $31/share. So I wouldn't be surprise

  • Not to be mean to microsoft or anything. But its reaaaly difficult for me to understand how in the world someone at microsoft can think that they can take over yahoo and on top of it they will retain the good talent in yahoo.

  • Former Yahooligans? (Score:4, Interesting)

    by zentinal ( 602572 ) on Wednesday April 09, 2008 @02:49PM (#23016402) Homepage

    I would assume that since the takeover has been announced, that Yahoo! has been bleeding talented folks who don't want to be assimilated.

    Have any of these folks started new companies? Any high profile defections to the Googleplex? Or would that be prevented by non-compete clauses in their contracts?

  • Seems interesting given the timing...

    http://news.yahoo.com/s/nm/20080409/bs_nm/yahoo_google_dc;_ylt=At1ZbJEnb.d8l6sncqqoLY6s0NUE [yahoo.com]

    Yahoo in talks to use Google search ads: source

    SAN FRANCISCO/NEW YORK (Reuters) - Yahoo Inc (YHOO.O) is in advanced talks to carry Web search advertising from Google Inc (GOOG.O) as part of a search for potential alternatives to being bought by Microsoft Corp (MSFT.O), a source familiar with the discussions said on Wednesday.

    Yahoo also is still in talks with Time Wa
  • 1. Shareholder want their shares to have higher value.
    2. Yahoo! execs say MS undervalues them.
    3. Shareholder supports Yahoo!
    3.5 (Hopefully) MS buys Yahoo! at a ridiculous price
    4. Profit!!!
  • The beginning of the End. Blow all your cash on Yahoo!, and when it ends up being as bad an acquisition as all of Balmer's other buys, maybe you can jack Vista up to a thousand dollars a pop for the "Jesus our marketing department is full of morons and our CEO is a doofus" edition.

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