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Yahoo May Re-Consider Google Alliance, Rebuff Microsoft
anastasd writes "Reuters is reporting that Yahoo might consider a business alliance with Google as a way to top a $44.6 billion takeover proposal by Microsoft. 'Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, that source said. At $31 a share, Yahoo believes the bid undervalues the company, two sources said. A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.'"
Do I like Yahoo? Not really. But I don't really like Google or MS either. The less of these online service providers there are, the worse it will be for consumers. I hope Yahoo continues to exist in some form or another just so there are more players in the marketplace. That means more choice, more competition and a better experience for users.
Google can use the 45bn in far better ways by cutting into new markets & technologies (eg. Android).
Engineering is the art of compromise.
Yahoo is also an ISP in Japan with a rather large penetration.
You want fun, go home and buy a monkey!
Google and yahoo are neck and neck (with google slightly ahead for the last while). That gives google 1 & 3, or 50% vs 30% if you combine youtube + google.
Now look at http://finance.yahoo.com/q/bc?s=YHOO&t=2y&l=on&z=m&q=l&c=GOOG
Yahoo on the way down and Google (relatively) up.
Sure, Google could buy Yahoo for a quick rush, but in the longer term (1-2 years) yahoo will just fade by themselves unless they do something very interesting (which they have not done in a long time).
Engineering is the art of compromise.
Check out this blog post by Google's Senior Vice President and Chief Legal Officer, David Drummond on Google's Corporate Blog. Google clearly sees this deal as a direct threat to the future of the Internet. They are not going to let Microsoft walk all over them like Netscape. Microsoft's bid for Yahoo! was a declaration of war:
Yahoo! and the future of the Internet
2/03/2008 11:45:00 AM
Posted by David Drummond, Senior Vice President, Corporate Development
and Chief Legal Officer
The openness of the Internet is what made Google -- and Yahoo! --possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It's what makes the Internet such an exciting place.
So Microsoft's hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the Internet: openness and innovation.
Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.
Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to
unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.
This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first --and should come first -- as the merits of this proposed acquisition are examined and alternatives explored.
Did anyone else find it funny that the bid also came the day after the DOJ stopped its oversight over all but one area of Microsoft's business practices? Unfortunately, slashdot and others reported it like the DOJ actually extended some kind of meaningful oversight, but in truth, just the opposite. "The US Department of Justice has extended its anti-trust oversight of Microsoft by two years. This only applies to the requirement that Microsoft make protocol documentation available to competitors, though. All of the other requirements have expired, and Judge Colleen Kollar-Kotelly did not give the states complaining the full five years of oversight they requested."
Once the directors receive an offer, it is their duty to figure out whether their shareholders are better off with Yahoo alone or not. If they figure out that it is better selling (I am sure they did already), it is their obligation under current Delaware law to auction the company. That's exactly what they are doing. There isn't a single transaction that closes at the starting price.
If the directors decide that it is better going alone, it will end up with a Proxy fight and a lot of lawsuits (those will happen anyway)
Right now, arbitrageurs are going long on Yahoo and short on MS. I really doubt this. They are not doing this just to jack up the price, I really think they are trying to avoid the takeover and are taking steps to try and defend themselves. This is a classic hostile takeover defense strategy. I'm pretty sure Yahoo! doesn't want to be acquired or merged with Microsoft. This takeover attempt was obviously hostile. Yahoo! has rebuffed Microsoft according to reports for a year. Do you really think a Stanford guy like Yang wants to see his life's work swollowed up by "the borg." There only chance to avoid the takeover is to find a white-knight like Google who can bail them out:
From: http://investment.suite101.com/article.cfm/posttakeover_defense_strategies
White Knight and White Squire Techniques
Employing a white knight defense is often the best solution available
to target companies. It involves finding a third party, a white
knight, that a target company can partner with and which is considered
a good strategic fit with the target. Finding such a white knight can
result in justifying higher market capitalization of the target and
making it more difficult/expensive for an acquirer to go through with
the bid.
Finally, a white squire defense involves finding a friendly and
strategically suitable third party to buy a considerable minority
holding in the target company that could be sufficient to block a
hostile takeover without selling any of the crown jewels, selling of
the entire company, or making any foolish counter bids.
No, can't complete joke. Still lame. Not funny. No chair jokes have ever, can ever, or will ever be funny. Stop insulting our humor glands!
Relax. Pull up a chair.
Anyone got a light for my sig?
Really?
Is that why when the US government was demanding search data, that Google was the only company willing to butt heads with the government to protect privacy, while Yahoo, AOL and Microsoft all volunteered private data?
To say that Google lacks a privacy policy is pure fiction. http://www.google.com/privacypolicy.html
Next time check your facts.
http://blindscribblings.com - Tasty pop-culture in conceptual fashion.