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Microsoft Bids $44.6 Billion For Yahoo
The news is everywhere this morning about Microsoft's $44.6B offer to buy Yahoo. The offer represents $31 a share, a 62% premium over Thursday's closing price; and Yahoo's stock price has been rising in after-hours trading. Microsoft has been making overtures to Yahoo since 2006, according to the CNet article, including a buyout offer last February that was rebuffed. Mediapost.com has some perspective on the deal from the point of view of ads and eyeballs. Such an acquisition, which would be Microsoft's largest by far — it bought Aquantive last year for $6 billion — would need approval by US and EU authorities. A European Commission spokesman declined to comment.
A consolidation of the Microsoft and Yahoo networks could shift a massive amount of infrastructure from open source technologies to Microsoft platforms.Microsoft said that "eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity." Yahoo has been a major player in several open soruce projects. Most of Yahoo's infrastructure runs on FreeBSD, and the lead developer of PHP, Rasmus Lerdorf, works as an engineer at Yahoo. Yahoo has also been a major contributor to Hadoop, an open source technology for distributed computing. Data Center Knowledge has more on the infrastructure implications.
Interesting that - imagine building a business using online apps, only to have your supplier go under and get bought out in some botched effort, and then lose history...
I think there are a number of serious implications in this MS/Yahoo deal. The monopoly aspect is actually the least problematic: the loss of history is a greater problem.
But then, maybe the Feds under a Democratic Admin will say "nuh uh!" and kill the deal...
RS
Shoes for Industry. Shoes for the Dead.
Actually, I don't think regulators would have a huge problem with this... Clearly the big guy on the block is Google at this point... Microsoft and Yahoo joining forces makes sense from a competitive point of view... Let's face it, MSN sucks, it has always sucked, and so it is a good merger from a business perspective too. The only thing I worry about here is if Yahoo just sort of "melts" under Microsoft's ownership, the same way Excite did when it got bought.
Brawndo: It's what plants crave!
I wrote to the FTC to complain because since Yahoo now owns Zimbra, this means that Microsoft will have the ability to kill the only serious competitor to their Exchange platform.
I know about the other solutions, but none are as feature complete IMHO as Zimbra. Two words: Blackberry integration.
For a heavy internet user like me, this news comes as a crisis of conscience. Having been a loyal Yahoo! Mail user for over a decade (the world's largest webmail service), and having so much of my online presence on Yahoo's comprehensive services - Contacts, Flickr, online document storage, Messenger, Y!Finance, Groups, (the list is endless) - I am obvioulsy deeply loyal to an independent Yahoo! ...But one reason that I've allowed Yahoo! to gradually become such an important part of my life is that it's NOT Microsoft. The same sentiments are felt by millions: will loyalty to a very useful Yahoo! be enough to overcome our distaste for Microsoft and the inevitable changes a takeover will entail? This is not insignificant nor a "religious platform issue" - note how Hotmail has fallen from #1 spot in email users after the MS takeover, for example. Yahoo! webmail alone reportedly accounts for 255 million of the world's 543 million webmail accounts, and webmail is only one of a vast range of internet & open source items Yahoo! is involved in.
Yahoo News itself is reporting this as a hostile takeover, but seemingly with Microsoft willing to pay such a large premium, one that will be hard to resist. It's interesting that Microsoft is willing to use up almost all of it's cash reserves for this takeover, largely sacrificing it's flexibility to make strategic investments in the future. But from the perspective of Yahoo! users the more important question is whether a MS takeover will turn Yahoo! into tepid porridge? And will the long, slow decline of Microsoft now drag Yahoo! down too?
If this deal goes through, expect to hear a gigantic sucking sound coming from the direction of Flickr.
blog
I cannot comment on the entirety of Asia, but I am an Indian and from a state called Andhra Pradesh (Hyderabad, in case you have heard of it). We speak a language called 'Telugu' here. I doubt if more than 1 or 2 percent of the world has heard of it.
The amount of Internet penetration here is very very less, apart from Hyderabad. Google is so popular that it is part of our songs [Like Bollywood, which are Hindi films, we have our own industry of sorts with Telugu films and yes they all have songs].
When a movie song has Google in it, it is because the average movie-goer knows what it is.
Google has become a part of our language. The same with some other regional languages include the National language Hindi.
... and I shall strike upon thee with great vegeance, furious anger and a slightly positive karma.
OK, Yahoo isn't a small company. This isn't like other acquisitions MS has made. This is more like a Compaq buying DEC. Think about it, Yahoo is sort of losing against Google. So Microsoft is buying a faltering competitor to (a) merge income and (2) reduce the competition by one player.
That makes the game Microsoft vs Google.
Now, can Microsoft really take on Yahoo without destroying it? Will it be like when Compaq bought DEC? Or will it work? Yahoo is all FreeBSD, the engineers there HATE and laugh at Microsoft and its products. I know for a fact that moral will sink and people will leave Yahoo.
There is something different going on here. FAST, Fast Search and Transfer, previous owners of www.alltheweb.com, a search engine competitor to google in the late 1990s split from its search engine business which it sold to overture, which was bought by Yahoo. Microsoft is currently in the process of buying FAST, and next on the agenda is Yahoo. Bringing back together, the two halves of the old company.
It may be a coincidence, but it is curious. Why would Microsoft buy technology that it arguably already has or could build cheaper? What is it they are out to get? Are there patents or other "intellectual property" owned collectively by the two parts of FAST that they can use to sue Google?
Also, Yahoo is a HUGE open source user/contributor. A purchase by Microsoft will almost certainly reduce the number and amount of contribution to the open source environment.
Lastlt, isn't this *exactly* what the Sherman act was designed to prevent?