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Microsoft Withdraws Yahoo Takeover Offer
Posted by
timothy
on Sat May 03, 2008 09:08 PM
from the brinksmanship-in-the-pac-no-west dept.
from the brinksmanship-in-the-pac-no-west dept.
mksmac writes "According to the KOMO TV Website, Microsoft has withdrawn its bid for Yahoo after presenting them with an increased offer that was subsequently declined by Yahoo. Frankly, this seems like a smarter decision on Microsoft's part, but I'd like to hear how other people feel about the deal. Should Microsoft have walked away, pressured Yahoo via a hostile takeover or sweetened the pot until Yahoo gave in?" For those who prefer it, the NYT also has coverage, and the story is also at news.com, among many others. I like the Beeb's version as well. And for the Microsoft-centric explanation of why the courtship is over, see Steve Balmer's letter to Jerry Yang.
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Technology: Microsoft Offered $40 a Share For Yahoo 301 comments
fistfullast33l writes "Bloomberg is reporting that a recently unsealed court case by shareholders against Yahoo reveals that Microsoft offered $40 a share for the Internet search company in January 2007 and Yahoo turned it down. We've extensively discussed Microsoft's bid for Yahoo earlier this year for $33 a share, which was rebuffed. Investor Carl Icahn has launched a proxy fight against Yahoo over the spurning of the Microsoft deal." CWmike notes Computerworld's coverage of the revelations: "The complaint places much of the blame on [Yahoo CEO Jerry] Yang, describing him as someone with a 'well-known' antipathy toward Microsoft who acted out of a personal interest to keep Yahoo independent. Something wrong with that? Oh, yeah... public company."
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My question is... (Score:5, Interesting)
This doesn't seem to have been a particularly well-handled, or deeply-sincere, attempt by Microsoft... so what were they really doing?
This is a sincere question; I've seen a lot of acquisitions (and even hostile takeovers) happen, and this seemed lacking in many ways. Maybe I've missed some of the machinations; maybe not.
Re:My question is... (Score:5, Informative)
The general consensus on the street seemed to be that Microsoft was offering *too much* money... which is why Microsoft stock dropped when the offer was first announced...
I'm not a big fan of Microsoft, but it really looked to me like they wanted Yahoo. It was Yahoo's executives who didn't want the deal to go through.
Maybe I just watch too much CNBC.
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Re:My question is... (Score:5, Funny)
Ventured Into Suspicious Territory And
Vital, Insightful Stock Threat Analysis.
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Re:My question is... (Score:5, Interesting)
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Re:My question is... (Score:5, Insightful)
Without an alternate reality time machine, we'll never know if it was really bad or good. Yahoo is not a leader in much of anything at the moment, but I don't think it's crazy for such a company to believe their best days might yet be ahead of them. It's not like they're AltaVista or Ask.com, they have quite a bit of clout and a lot of popular services despite Google's dominance.
MS was certainly not getting much of anywhere with MSN or whatever they're trying to push this week. With their new "Live!" stuff being integrated into Windows and Office, they finally have a decently compelling online product to try and spin off of, but they don't have anywhere to spin people *to*, in a way that would keep them in an all-MS ecosystem. Yahoo could give them all that in one deal.
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Re:My question is... (Score:5, Interesting)
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Re:My question is... (Score:5, Interesting)
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Re:My question is... (Score:5, Insightful)
The audience for the letter wasnt Wang though, it was the shareholders. Lots of people in the Yahoo camp are pissed they didnt already accept the deal. Lots more are going to be pissed they turned down 33$ a share. Even more are going to be pissed when the stock price plummets on Monday, as its been going up on the assumption that the acquisition would happen. I wouldnt be suprised to see a single day 6 - 8 $ a share drop. That will lead to even more shareholder lawsuits and I don't doubt that in the near future Wang will be out on his ass, as his position was hanging by a thread already.
If this happens, MS could actually swoop back in and buy Yahoo for a discount ( see BEA/Oracle for example ) in the future. Otherwise Microsoft may have managed to damage a rival by causing such chaos and internal strife.
Personally as someone who holds MSFT shares and watched them drop 3$ the day this (horrible!!!) deal was announced, I say THANK GOD! My only prayer is that this is finally the thing that gets Balmer ousted. I can only pray.
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Re:Credibility lost? (Score:5, Funny)
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Re:My question is... (Score:5, Interesting)
Yahoo combined with MS's own Web and internet services would have been enough to give MS majority market share in several new markets. More importantly, many of yahoo's services are pretty decent and doing quite well. For some other company they might not be a good acquisition, but for a company like MS that has several monopolies and is not at all shy about illegally leveraging them, Yahoo makes a lot of sense. When you have 25% market share, breaking compatibility with everyone else hurts you more than them. When you have 52% and it is growing because it is tied to Windows and MS Office and IE, breaking compatability with everyone else hurts them more.
It sounds unlikely to me. If that was their plan, it probably backfired. All it seems to have done is to get Google and Yahoo talking and making technology partnerships.
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Re:My question is... (Score:5, Insightful)
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Re:My question is... (Score:5, Informative)
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I'm torn (Score:5, Insightful)
Re:I'm torn (Score:5, Interesting)
And, unlike a lot of the folks there, I'm fairly confident that I'd be able to find a new job the second it became official.
It's one of those dangerous ideas that you really need to be a nerd and know microsofties, googlers, and yahoos in order to understand exactly how stupid of an idea it really is.
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Re:I'm torn (Score:5, Insightful)
What are the odds Microsoft would have allowed it to flourish? I'm betting that, at a minimum, they would have jacked the price up until it was no longer as cost effective over Exchange.
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No future. (Score:5, Funny)
Yahoo's got to the point where not even MS wants them. They're doomed. That's not really a bad thing. Yahoo is evil after all.
AOL called, they want their business plan back.
Re:No future. (Score:5, Insightful)
Frankly the general idea is correct, the reasoning is not. MS (publicly) doesn't want Yahoo because they effectively loaded themselves with a poison pill to keep Microsoft from taking them over. They've done things like partnering with Google and giving executives very large golden parachutes that make it very unpalpable if not outright hard for Microsoft to acquire the company and not end up with a mess and/or FTC troubles.
It is bad news for Yahoo employees and shareholders though. The company really is going nowhere, it's going to limp on for years like AOL or get picked up for pennies by Google if it could be cleared by the FTC. The best deal for the shareholders would have been to approve a buyout, but Yahoo's poison pill plan did a pretty good job of stopping that.
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MISSION ACCOMPLISHED! (Score:5, Interesting)
Ballmer creates AOL Redux.
Cant say I didnt expect this. (Score:5, Insightful)
...and Ballmer wrote as such. (Score:5, Informative)
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Re:Cant say I didnt expect this. (Score:5, Insightful)
Think of what happens now: The shareholders of Yahoo are going to go ballistic. Yahoo management just left $47.5 billion on the table! (The total at $33 / share for Yahoo.) This has to be the dumbest corporate move since Time Warner buying AOL. My guess is that the Yahoo board is going to have to fend off a shareholder insurrection the likes of which we have not seen for a while, which will serve as a huge distraction for Yahoo. I don't think Google can get too close to Yahoo, because the DOJ (let alone the EU) will not like the concentration of search advertising in the hands of one company.
Microsoft let out that they allocated $1.5 billion for employee retention. If you are a good performer at Yahoo, you now have three choices:
If you stay at Yahoo, you get to work for a company were top management is going to have a major distraction on their hands. The people who were going to jump ship to Google if there was a takeover are going to leave, and a few people who might not have thought of it at all are now going to explore going to Microsoft.
In the end, Yahoo fizzles, and is less competition to Microsoft. Not a bad result from Ballmer's point of view. Watch the stocks on Monday. Yahoo will likely plunge, Microsoft will more than likely be up a few dollars. Over time, Microsoft and Google will pick apart Yahoo. Then Ballmer will have positioned Microsoft to be #2 in the business, which is good enough for Jack Welch (Former CEO of GE), who I believe Ballmer admires. This is probably the smartest thing Ballmer has done during his tenure as CEO.
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Savvy move (Score:5, Interesting)
Re:Savvy move (Score:5, Insightful)
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MS, you lucked out (Score:5, Insightful)
Instead, you should invest that money in your operating system, the APIs for your OS, the tools to make it easy to create applications for your OS. Make a serious real time OS. Unify your OSs. Architect them so that you can crank them out faster and safer. Make your driver model easy to understand and code for. DirectX seems to do good for you, but you had better keep up on it. The same is true of C#. Give these Java folks some stiff competition in language, libraries, and tools. Make the speed of your CLR rock. Make it vectorize, use the SIMD, automatically use multiple cores, etc.
In summary, make businesses want to run on your platform, develop for your platform. You want every office to use your software tools. It won't matter if every office uses your search engine when they go to get info off the internet. That's not the most effective way for you -- a company with an already vast installation base -- to make money.
It's a true shame (Score:5, Insightful)
When AOL was so bloated with cash they didn't know what to do with it, they bought time. It was a marriage made in hell. Time didn't have anything that AOL needed and AOL couldn't offer Time anything. When the dot bomb crash happened, AOL lost value quickly to eventually become the struggling company today that only exists because of a legacy of users who never switched to better offers.
I had the kind of feeling that that would have happened to Microsoft as well had they bought Yahoo. They would have parted with almost half their operating capital for something that would have given them nothing. Given the fact that Microsoft is not exactly rapidly gaining marketshare at the moment, it could have hurt them badly.