Yahoo To Reject Microsoft Bid

Many outlets are echoing a subscribers-only report in the Wall Street Journal that Yahoo's board has decided to reject Microsoft's takeover offer. The NYTimes offers the only other independent reporting so far confirming this claim. The report says that Yahoo will formally reject the offer in a letter on Monday, since they believe it "massively undervalues" the company. Microsoft offered $31 per share, a 62% premium on the stock price at the time, for Yahoo; but the latter believes that no offer below $40 per share is tenable. The AP has some background on Yahoo's options in responding to the bid.

Comments

In other news...

[FlyByPC]

Redmond weather reports are predicting thunderstorms, with a 90% chance of scattered chair showers.

Re:In other news...

[Anonymous Coward]

Because falling chairs hurt.

Re:In other news...

[Larry Lightbulb]

Given the accuracy of recent local forecasts (eg the inner-city areas will be covered by deep snow) what will really happen is that a cushion is put onto a sofa.

Re:In other news...

[dotancohen]

Not when they are falling in Redmond and you are in Sunnyvale.

Not smart

[horcy]

I think Yahoo! makes a big mistake here. Stock will fall even lower then the $19,18 it was at the moment of the hostile take over from MSFT. We'll see what happens.

Re:Not smart

[Frosty Piss]

Stock will fall even lower then the $19,18 it was at the moment of the hostile take over from MSFT...

Sure, or course. The circling money vultures who could not really care any less about Yahoo! or it's business will flee to other more tasty rotting Interweb meat. And Yahoo will live another day.

The problem with American business and the financial "industry" built around it is that there is actually no interest at all in sustainable business, but rather exponential profit growth at all cost, even the death of the company itself. The company dies, the money vultures move on to the next target.

Re:Not smart

[Anonymous Coward]

Microsoft aren't stupid and they obviously think Yahoos true value is not reflected in the current stock price. If anything, the share price should rise on this news.

Then again perhaps Microsoft are playing characteristically dirty and are about to dump any Yahoo shares they acquired on the open market in an attempt to destabilize the stock?

One way or another, we'll all know soon enough.

Re:Not smart

[mrxak]

I think there's definitely some people that are only interested in a quick buck, but a lot of investors are looking long-term.

In any case, yes, Yahoo's stock will take a hit, but the company will survive. Frankly, it's probably a good time to buy their stock once everyone that thought microsoft would take them over dumps theirs.

Re:Not smart

[Dare nMc]

The problem with American business and the financial "industry" built around it is that there is actually no interest at all in sustainable business, but rather exponential profit growth at all cost

what you describe would be a working open market. IE where if a business is not getting good consistent return on capital/assets then it needs changes.
That is something most individual investors don't understand, compounded interest grows exponentially because you get the same return on a growing valuation. I well managed company must do the same.
The issues come with building expectations into stock price, when you start expecting PE ratios 10-50x. then the stock price doesn't follow the true assess their managing. So you could expect exponential growth of the company's hard assets, but once the stock price gets inflated, then only using the stock as a leverage to build your company can pay off anymore.

Re:Not smart

[Pecisk]

Duh. It is called speculation for a reason and is only known legit way how to get more money from others than you actually have to. It is basis of capitalism, so we have to live with that. If you don't, try other system and see how savage actually people are.

Stupid survive instinct.

Re:Not smart

[homer_s]

Why would Yahoo, or any other company, ask money from these 'money vultures' in the first place?

It is these 'money vultures' who provide funding that gets ideas off the ground. And it is precisely their greed that takes money away from lower performing businesses and moves it into higher performing ones.

It is a third rate intellect that takes into account what is seen, but ignores the unseen.

Re:Not smart

[vertinox]

what you describe would be a working open market. IE where if a business is not getting good consistent return on capital/assets then it needs changes.

Its not that hard to be a stock vampire. If you had $1,000 and bought 1,000 shares at $1.00 and then just waited for an invariable 5% change price to $1.05 then have a limit sell then you just made 50 some odd bucks. This may seem small but if you do it at larger scale and of course higher returns you can scale it up to higher returns. Your not even waiting for a quarterly return nor news but rather brute forcing money out the company and other investors over and over again as your ride the price changes.

Of course if the whole market collapses like it did in January that one day, you might be out of a lot of money if you were trying something like this.

I'm not saying its good or bad, but the current system leaves open a few loopholes so that a company can be exploited by investors bleed it dry of money. However, generally companies that give dividends tend to keep those kind of investors at bay by simply having enough long term investors soaking up the dividend returns over several years.

Re:Not smart

[vertinox]

It is basis of capitalism, so we have to live with that. If you don't, try other system and see how savage actually people are.

Wouldn't it make more sense to sell long term bonds? Or heck... Why not just sell non-voting stock so you don't have to give a damn what the investors say? I'm just saying you can get capital some other way than the stock market.

Obviously, the shareholders at MSFT are basically the people that run the company so (Balmer and friends) so its not like if they make a bad decision that Balmer would vote himself out (well there is Gates and he doesn't' work their anymore, but I doubt he'd vote Balmer out even if they did poorly).

Re:Not smart

[glitch23]

Sure, or course. The circling money vultures who could not really care any less about Yahoo! or it's business will flee to other more tasty rotting Interweb meat. And Yahoo will live another day.

This also explains why oil is currently at $90 a barrel and why it jumped ~$20 in a few weeks time. Even though the poor are having trouble getting to work to make money the high and mighty rich investors are making profits on oil. Just another day of work for them.

Re:Not smart

[OakLEE]

The problem with American business and the financial "industry" built around it is that there is actually no interest at all in sustainable business, but rather exponential profit growth at all cost, even the death of the company itself. The company dies, the money vultures move on to the next target.

I challenge you to show how Yahoo is a sustainable business. Before the MS offer, they just announced that they would have to fire 1000 employees. The company's revenues year over year are shrinking because their management cannot find a way to translate all of their site traffic into money. They have a history of failing to meet their own projections. At the very least this a poorly run company, and with the coming recession, I do not think its sustainability is out of the question.

Second as an individual that owns stock, and thus is one of these "money vultures," why should I or any investor want to own Yahoo's stock, outside of takeover speculation. The company offers no dividend, which means the only return on investment I will see in it is from the company's growth, something it has clearly failed to predict, manage, or deliver on.

You claim that the entire financial industry is built on "exponential growth" but you fail to ignore the fact that Yahoo abd most tech stocks choose to hold their stock out as a growth stock, meaning they can only justify their stock price by *gasp* growing. If Yahoo were too come out tomorrow, declare a dividend (like say Altria), and pay some of the $1.5 billion dollars in cash they have to their shareholders, than their stock would finally have some intrinsic worth NOT tied to their rate of growth. (Note: For an explaination of growth stocks vs. value stocks, check this link out.)

Re:Not smart

[OakLEE]

I'm going to get modded flaimbait for this but I don't care.

I'm poor. I make under $30k a year and live in Los Angeles. Yet despite that, I am able to save 25% of my income each year and invest it, some of it in oil stocks to help offset the cost of commuting. The problem in this country is not that poor people cannot save and cannot live a decent life, it's that they choose not to. They choose to have children before they can afford it. They choose not to take out loans to go to college. They choose to rack up huge amounts of credit card debt and only make the minimum payment each month. I have no sympathy for these people, when I with the same paycheck can live a decent life and take steps to grow my wealth rather than squander it.

This isn't the 1890s, its not just the "high and mighty rich investor" that can make money of the stock market. If you can save $100 a week, you have no excuse for not partaking in the the profit making, and you are reckless for not doing so.

Re:Not smart

[Anspen]

It is basis of capitalism, so we have to live with that. If you don't, try other system and see how savage actually people are.

erm... speculation, hell even a stock market in general is by no means a necessity for a functioning (even laissez fair) capitalistic market. a well oiled stock market had some significant advantages (liquidity, possibility for relatively small scale, spread out investments) but it also had a slew of drawbacks. It's perfectly possible to imagine a system that's very much capitalistic, but doesn't allow for quick speculation.

Re:Not smart

[earlymon]

Not a criticism or flamebait, so please don't take it that way.

I have a yahoo account (don't really use it), but I primary think of them as a search engine. Used them until after google came along, but joined the pack.

So based on that, here's my question - _if_ Yahoo is a search engine, and _because_ you point how they're not a sustainable business, then perhaps the real deal is that your post has three links in it, none of them from Yahoo. In fact, you use google as the first link to find out / prove how Yahoo was doing with its employment.

No one pointed out the irony until now. It's that proof in and of itself of the trouble Yahoo _really_ has? Advertising requires mindshare or is meant to build it - whichever way you want, you just proved _something_.

Re:Not smart

[Dare nMc]

bought 1,000 shares at $1.00 and then just waited for an invariable 5% change price to $1.05 then have a limit sell then you just made 50 some odd bucks.

-$12 commission. You can do the same thing in Vegas with a $1000. IE you bet $50 a day, and double down until you hit once. Even with $1600 it would be on average 1 month until you lost your initial $1600, by then you would have won $1550, so if you reinvested that you would likely make a year until you lost everything. The casinos hate this, not because they lose money at the table, as many think (eventually they get their share cause the 0, 00 put the odds in their favor eventually,) But these are disciplined gamblers who don't bet enough to be worth the casinos time. Also with comps, the time in the casino they assume more money than $50 a day average will be at stake, so they lose some off the table.

Similar with you "Vampire" strategy, this type of betting actually stabilizes a stocks value, would slow it's growth but also slow any decline. So not really bad for the stock generally, again it may upset the Mutual funds,etc. Because their is a need for the majority of $ invested to be educated to keep a stock in line. These non fundamental purchases encourage movement for movement, not the preferred movement for fundamentals that is supposed to keep the markets efficient.

Re:Not smart

[larry bagina]

More of that $3 a gallon gasoline goes to state and federal gov't (via taxes) than to those evil oil companies (via profit).

Re:Not smart

[OakLEE]

Wow I totally didn't think of that. Good Job.

My personal opinion on Yahoo is that they should just farm their search functions out to Google and stick to their best functions (1) a web directory; and (2) a content provider. I have a Yahoo account as well and their Financial Pages are the best free ones available. If they were to focus on drawing ad revenue (or any other revenue) from their content rather than trying to compete in search, I think they could right the ship. Then again, that's just pure speculation since I haven't gone over Yahoo's financials and don't know where most of their revenue comes from.

Re:Not smart

[Anonymous Coward]

I think you should read a bit more about your doubling casino strategy if you think it's a good one. Try here for a start.

The problem is that it is easier than you think to lose several bets in a row and run out of betting money after you've doubled it all away.

...

This shows that the Martingale is neither better nor worse than flat betting when measured by the ratio of expected loss to expected bet. All betting systems are equal to flat betting when compared this way, as they should be. In other words, all betting systems are equally worthless.

Re:Not smart

[glitch23]

More of that $3 a gallon gasoline goes to state and federal gov't (via taxes) than to those evil oil companies (via profit).

Well, when oil is priced high it, in theory, hurts oil companies because they have to pay more for it which causes refiners to pay more, which causes distributors to pay more and eventually the average joe feels the effects. In WV, about 50 cents per gallon of gasoline goes to state and federal taxes. WV has one of the highest state taxes on gasoline in the country. I don't know what percentage goes to the oil companies but last year Exxon posted the biggest profit yet. I want to say it was about $40+ billion for 2007. They have huge R&D expenses as well but they still made a tremendous profit despite oil prices being the highest ever during the last quarter of 2007. The price of oil makes up only a portion of the price of gasoline and unfortunately taxes make up a large portion too.

Re:Not smart

[ocbwilg]

I think Yahoo! makes a big mistake here. Stock will fall even lower then the $19,18 it was at the moment of the hostile take over from MSFT. We'll see what happens.

Microsoft will win this one anyway. What people forget is that Yahoo's management has a fiduciary responsibility to the company's owners, aka the shareholders. Unless the Yahoo execs can convince shareholders that they a plan to somehow generate more value than Microsoft's buyout price, they are neglecting their duty. You can probably expect shareholder lawsuits over this if it doesn't eventually go through, ESPECIALLY because Yahoo has been on the downswing for the past couple of years.

Realistically, the Yahoo management is probably just trying to hold out for an even more ridiculous sum of money. Microsoft will probably tell Yahoo that they can either take the current offer or MS will appeal directly to the shareholders. In fact, Ballmer said as much in his original offer letter:

Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal.

Even if Yahoo management says no, it is the Yahoo shareholders who have the final say. This is far from over.

Re:Not smart

[vertinox]

-$12 commission. You can do the same thing in Vegas with a $1000. IE you bet $50 a day, and double down until you hit once. Even with $1600 it would be on average 1 month until you lost your initial $1600, by then you would have won $1550, so if you reinvested that you would likely make a year until you lost everything.

The $1,000 I mentioned was just an arbitrary number, I'm more or less talking about the larger investors who simply buy and sell at marginal price changes in the stock at somewhere less than 5%. Sometimes its just a matter of waiting for a stock to start to rise, buy on the rise and then sell short before it caps for the day. Most of these transactions happen same day without regard for who or what the company is doing or even if that company is making money at all.

Take China Shen Zhou Mining & Resources Inc. (Public, AMEX:SHZ) which went public last month that was OTC for around $3.00 and went public and instantly went to $5. The momentum got notice and people starting buying but people riding the movement bailed around 7 or so with it peaking at $7.90 and now its back down at $4.50 and $5.00 range and this happened all in one day.

Apparently, there was a good set of people that invested that didn't really give a damn if the company made a profit or even survived the next day because they got their money and ran on the first day it went public.

Re:Not smart

[BILLinBCN]

Google is the driving force behind the acquisition. But an index of joint Yahoo/Microsoft assets does not gurantee their ability to overtake the search giant. Both companies are trailing because of poor product portfolios, poor monetization, and a failure to innovate. The combined company may create a more assertive "also ran" player in the industry, but that player is not much more likely to beat Google. There's an interesting analysis of what Yahoo's new advertising platform would have to be at http://www.broodingsavage.com/journal/2008/2/11/what-can-save-yahoo-not-microsoft.html

Re:Not smart

[OakLEE]

Well Exxon makes such huge profits because they control reserves that let them pump out oil at something like $5-15 dollars a barrel. In fact, while everyone was driving SUVs and laughing up the cheap oil of the 1990s, they were out finding new reserves and buying up rights to existing ones for the day when (we all knew) oil headed higher. Should we really punish them for their foresight?

Ok fine, assuming we should, what do you propose doing? Let's examine the possibilities.

Scenario 1: Capping Exxon's profits with an excise tax. That'll only discourage it from pumping out oil which will further drive the price up. After all, what's the point of pumping out more oil if you get no return on it.

Scenario 2: Price ceilings on the price of oil in the US. One word, 1972. All this will do cause gas shortages in the US when oil companies decide to stop selling oil here because they can bet more money from it elsewhere.

Scenario 3: Issue a legislative mandate to force Exxon to keep pumping out oil and selling it at a lesser price. To a simpleton, this seems to solve the problems of scenarios 1 and 2. Of course it fails to ignore the fact that Exxon can shut down its US operations and move overseas. After all, almost none of the reserves it controls are in the US. It has rights in ANWAR, but, hey, guess what we can't do in ANWAR! Not only does this result in loss of oil, but it also results in a loss of jobs. Besides what are we (the US), Soviet Russia? Which brings me to our final scenario...

Scenario 4: Nationalize the oil industry. Yup, lets do what Venezuela did and watch as the whole world laughs because we have no oil in our borders. Plus, as an added bonus the government that "efficiently" run Social Security, Medicare, and the war in Iraq now gets to use its experience streamlining those boondoggles to run the oil industry.

Ok, now I grant that my reply has been sarcastic so far, but lets get serious for a second. The price of oil has nothing to to with some US cartel of oil manufacturers. It even has far less to do with foreign cartels like OPEC. Oil is at $90 a barrel because *gasp* demand for oil puts it there. Unlike 10 years ago when oil was cheap you have China, India, Brazil, and Russia all coming online as major industrial powers. They all need oil (well Russia has plenty of its own that its using) and their aggregate demand is at least equal to that of the US and EU if not higher.

To compound this, most of the easy sources for oil are gone. Most new oil finds are deep ocean, and/or heavy crude fields. Deep sea oil is inherently hard to pump for obvious reasons, and heavy crude is inherently hard to refine into usuable oil. Ergo, the cost of producing oil is going up as well.

Finally, ever heard of Peak Oil Theory? Well, while there is no concrete evidence that we have hit or past peak oil production, the fact that we are now having to search in harder to get to areas and refine lower quality crude are both evidence that we are headed in that direction.

Bottom line, there are many more factors to oil's cost than Exxon, Conoco, or Chevron's greed. Are there wallets getting fatter at our expense? Yes. But is there anything in the short term we can do to stop it without shooting ourselves in the foot? Not really.

What we can do get ourselves off our oil dependence, which hopefully the higher price of oil will encourage. IMO if we have to "suffer" (it's all relative, hey at least we're not in Africa) in the short term to correct our economy in the long term, I say do it. (Hey and while we're on the subject we should do the same with the deficit by cutting spending AND raising taxes. I'd rather pay 30% now then have 15% Treasury Yields wreck my retirement portfolio in 20 years.)

I'm done ranting.

Someone should warn Jerry

[rainhill]

a lot of chairs are on his way.

Re:Someone should warn Jerry

[indiejade]

<p>Microsoft-ites wanted to "kill Google" . . . but they couldn't.  So now they're attempting to kill Yahoo!, the company that gave Google bocos of it's initial funding:  <a href="http://slashdot.org/article.pl?sid=05/03/02/1456237&from=rss">as noted during Yahoo!'s 10th birthday.</a>.  Good for Yahoo! rejecting a hostile takeover attempt; the last thing it needs is to take on the burden of Microsoft's <a href="http://www.zentu.net/network/?q=node/3">inefficiency</a>, regardless of how much that might bring them pseudo-gains in stock price during the short term.</p>

<p>Something tells me Microsoft-ites will be wanting to throw more than chairs on Monday.</p>

Re:Someone should warn Jerry

[calebt3]

Something tells me Microsoft-ites will be wanting to throw more than chairs on Monday.

Why wait?

Good to have more search engines

[Besna]

As much as we all love Google, I think there needs to be a variety of search engines. Microsoft-Yahoo might have been a bigger player, but we'd lose the variety. Ask.com almost doesn't count.

Excuse me?

[mrbcs]

Microsoft is offering a 62% premium on what the shares are worth now, $31... and they want $40. WTF? Would they rather they get nothing once their market share drops some more?

Re:Excuse me?

[downix]

You're ignoring, they're offering $31 "equivelent" in Microsoft stocks. Not in cash in hand. How will the stock market respond when suddenly there's this extra 20% in loose Microsoft stocks floating out there?

Hello stock price freefall!

$40 as a minimum is quite reasonable when you consider the massive devaluation which will occur the moment the deal goes through.

Re:Excuse me?

[Dr Kool, PhD]

That's simply wrong. The offer was $31 in cash OR 0.9509 of a share of Microsoft common stock.

Re:Excuse me?

[downix]

You may be right, but have you ever checked on microsoft's cash assets? A large portion of them are:
Stock, specifically microsoft stock, used for quick liquidation.

So, you have "get stock" or "get cash paid for with stocks", both of which would flood the market with loose shares almost immediately. Since these deals do typically require the largest stockholders to accept in stock... well, you can imagine the position they are in.

Re:Excuse me?

[Pendersempai]

There's an equilibrium, though. When a large block of stock is sold, the price of the stock may drop momentarily, but then it is undervalued and hedge funds and mutual funds snap it up until it is back to where it was. This effect is born out empirically. The demand curve for a stock is extremely steep: if it drops even a dollar, everyone and his mother wants to buy, which pushes it back up to its equilibrium price.

The one exception is when insiders sell large blocks of stock -- then the market assumes there must be bad news coming, and the price does drop and remain low. But this effect is informational, and the magnitude of the drop has much less to do with how many shares are dumped onto the market than it does with what the dump says about the insider's opinions (e.g. what proportion of his stock he dumps, and how many other insiders do the same simultaneously).

In any case, the fact that there are "loose shares" dumped onto the market does not by itself affect the price.

Re:Excuse me?

[downix]

If it were just loose shares, I'd agree with you. But we're talking a LOT of loose shares, 1.1 BILLION loose shares.....

Re:Excuse me?

[Pendersempai]

It still wouldn't matter. An undervalued stock is like money lying in the street. Your position is like saying that, while people will pick up $3000 in hundred-dollar bills if a helicopter drops them on Manhattan, they won't bother to pick up $1 billion. Even if it cost $70 to pick up a single $100 bill (analogous to fronting the money to buy an undervalued stock), they would all be gone in no time.

Re:Excuse me?

[jonbryce]

There is also the issue that if Microsoft pays over the odds for Yahoo, where does that money come from.

It is easy to see that Yahoo shareholders benefit, but this extra benefit comes out of the Microsoft shareholders' pockets. The only time it wouldn't is if there are synergies to be obtained from merging the two companies. That could happen, but it is more likely that there will be diseconomies of scale as a result of the merger, and the total amount lost by Microsoft shareholders will be more than what Yahoo shareholders gain.

Re:Excuse me?

[Pendersempai]

Completely agreed. In fact I think this is the most likely scenario. When the deal was announced, YHOO rose but MSFT fell even further -- clearly the market thinks this is a value-destroying merger.

My point was merely that "dumping" stocks onto the market at below-value does not, by itself, affect the price of the stock for more than a few seconds.

Re:Excuse me?

[HiThere]

Who gets to choose?

If MS gets to choose, then I believe that the assertion that the payment would be in MS stock is correct.

Re:Excuse me?

[downix]

Actually if said helicoptor did drop them, then inflation would, infact, make those $100 bills less valuable.

Re:Excuse me?

[Anonymous Coward]

The discussion is tuning too 'academic' - since the *value* is what the market is willing to pay. There is no guarantee something is "undervalues" without considering the risks. Try dumping a few billion shares in the market and see if the price stays up (esp. since the daily volume is around 100M) - and how much it is NOT like picking up dollar bills off the street, because there is investment involved in buying them and opportunity costs and risk.

Re:Excuse me?

[Achromatic1978]

Uh, huh?

From their 2007 Annual Report. Total assets, $63.2B. Total liquid cash: $23.4B. Over twenty three billion in cash isn't chump change by anyone's measure.

Re:Excuse me?

[kramerd]

Since the offer is for either cash or equivalent stock, yahoo shareholders would have to pay taxes on the gain would the deal have gone through (the basis in the stock then becomes $31). If you held yahoo stock for less than a year, the difference between your purchase price and $31 would be taxed to you as income (as opposed to capital gains). Assuming you get taxed at 20%, this reduces the premium being paid to below 50%, not 62.

Re:Excuse me?

[downix]

Um, no. You didn't read.

That is $23.4B of Cash + Short Term Investments, aka STOCKS. Look at MSFT's stock portfolio, oh my, 95% stock in... MSFT!

Their actual liquidity remains less than $7 billion, leaving about $17 billion in MSFT stock, which if this were to happen would plummet like a rock. That is the $17 billion they need to pay for small things like payroll....

Re:Excuse me?

[maxume]

You just make shit up.

Here is their balance sheet:

http://www.microsoft.com/msft/reports/ar07/staticversion/10k_fr_bal.html

It shows that $17 billion in short term investments you are talking about. Here is the breakdown of their investments:

http://www.microsoft.com/msft/reports/ar07/staticversion/10k_fr_not_02.html

It shows about $7 billion of common stock and equivalents, none of which is categorized as short term, and about $19 billion in various bonds and similar instruments, of which there is about $17 billion that is categorized as short term. None of that $19 billion is Microsoft stock.

None of this mentions the $10 billion in unrecognized revenue that they have lying around. This is money that they have promised to pay themselves later on in the year.

Microsoft enjoys an excellent cash position, and has large amounts of continuing operating income.

Re:Excuse me?

[mysticgoat]

What makes you think their market value will drop?

Yahoo is in the process of rolling out Web 2.0 products that are of interest to businesses who are looking for an alternative to the costs of Vista. Its short term prospects are quite favorable. Yahoo has also been one of the beneficiaries of the Redmond brain drain: their pool of talent may be deeper and wider than ever before. They also have a longer history of web site and mail group hosting than anyone else I can think of, so they've got a lot of applicable experience for Web 2.0 activities.

It's pretty obvious that one of the reasons MS wants to buy them is because Yahoo is about to emerge as yet another serious competitor for Microsoft's core products. Who needs Vista and MS Office 2007 if all the core business work is being done through your favorite browser (on your choice of OS) interacting with your Yahoo-hosted databases and web sites?

Re:Excuse me?

[canuck57]

Microsoft is offering a 62% premium on what the shares are worth now, $31... and they want $40. WTF? Would they rather they get nothing once their market share drops some more?

But 1/2 are in shares. Microsoft knows it's shares have peeking in value. This is when most companies would make such deals. Hm, if good shorts exist on the long term market Monday I might bite.

Bet chairs are a flying in Redmond, right out the Windows.

Also bet now that XP is drying up on the consumer end and the Vista SP1 is next generation crap ware, MSFT is going to post sales declines in about 2-6 months.

Yahoo was good to turn down such an offer. MSFT futures, I would short. And if I had a lot of Yahoo shares, I would want to dump them fast on the conversion. Now if Google offered Linux....killer blow... Microsoft knows it is vulnerable.

Re:Excuse me?

[Pendersempai]

Actually there would be no inflationary effect unless the guy in the helicopter printed the bills as opposed to dropping money he had previously earned.

Re:Excuse me?

[Daengbo]

Since it looks like MS spent 20M of its cash reserve in the last couple of years for a flat stock price, I really hope MS tanks its stock further and depletes its cash reserve almost completely.

What happens next

[Dr Kool, PhD]

Either:

1. Microsoft ups their offer. Yahoo board indicated they wouldn't consider anything under $40.

2. Microsoft walks away. Shareholders revolt after stock drops big time.

3. Microsoft wages a proxy fight and tries to win over shareholders over the board's head.

(3) is the most likely outcome. Microsoft already said something like "we won't take no for an answer".

Re:What happens next

[dreamchaser]

I think the exact words were "by any means necessary", so yes, I'd expect a hostile takeover at this point.

Re:What happens next

[rainhill]

(4) throw some chairs

Re:What happens next

[Anonymous Coward]

Microsoft already said something like "we won't take no for an answer". I got an offer you can't refuse Yahoo.

Re:What happens next

[noidentity]

1. Microsoft ups their offer. Yahoo board indicated they wouldn't consider anything under $40.

Microsoft must be strapped for cash these days...

Re:What happens next

[kripkenstein]

2. Microsoft walks away. Shareholders revolt after stock drops big time. You know, the paranoid in me thought that this might be Microsoft's strategy all along.

Surely Ballmer knows many/most Yahoo! engineers aren't happy with the idea of being Microsoft employees (even if they do endure it, they won't do so happily, which affects productivity). Also most/all of Yahoo! is built using tools not easily integrated into Microsoft's (but this could be mitigated with a slow integration process). So the actual value of Yahoo! for Microsoft isn't all that great. Is this worth wiping out all of Microsoft's war chest and going into debt to boot? I doubt it.

Instead, imagine what would happen if Yahoo! vanished overnight. Yahoo! users would migrate either into Google services or Microsoft ones. Ballmer might believe that he can woo the majority of them; even if not, it still raises Microsoft's market share, even if while doing so it does the same for Google. And this might be achievable by doing exactly what Ballmer is doing: getting Yahoo! directors (and employees) to fight with Yahoo! stockholders. Yes, it might not wipe out Yahoo! overnight, but as a consequence the stock might topple downwards, and who knows what might happen then - the board might get replaced, internal turmoil, etc. etc. Even if it doesn't kill Yahoo!, it might make it less competitive, again, something that is good for Microsoft.

Re:What happens next

[metlin]

A link to the WSJ article would have been nice, as some of us do have subscriptions - Yahoo Board to Reject Microsoft Bid.

And to your point, I would have agreed that #3 is the most likely, although the final paragraph in the WSJ indicates that Yahoo has taken the "poison pill" in order to prevent a hostile takeover and that Microsoft may have to oust the entire board to do it.

I find that particularly interesting - either they (Yahoo) are very desperate and are hoping for a miracle, or they really do believe in what they say.

Re:What happens next

[rainhill]

"So the actual value of Yahoo! for Microsoft isn't all that great"

If genuine, Microsoft most probably is after Yahoo's user base, not its software nor its engineers.

Re:What happens next

[timeOday]

3. Microsoft wages a proxy fight and tries to win over shareholders over the board's head.

Isn't a 62% premium likely to make them jump? That's a lot of free money.

Re:What happens next

[Nullav]

Yahoo! users would migrate either into Google services or Microsoft ones. MS has the most popular desktop OS, has its browser as the default on the most popular desktop OS, and has its search engine as the default homepage on the default browser of the most popular desktop OS, but they're still having trouble with Google/Yahoo. Something tells me it wouldn't be worth that much to just buy and get rid of Yahoo.
Rather than removing it entirely, I imagine MS finding ways to beat Google in the adspace game after getting two of the top search engines.

Re:What happens next

[SpaceLifeForm]

Microsoft *is* strapped for cash. They have already said they
would borrow money to do the Yahoo deal.

Microsoft is *so* desperate that they want to get in bed
with the banks, so they can become 'too big to fail'.

The problem for Microsoft is, even if they were to go belly up
tomorrow, it's not the end of the world. In fact, it would be good.

Ballmer and Gates are so full of themselves that they really believe
they are indispensable to the world economy.

In fact, Microsoft is a *huge* drain on the economy.

Re:What happens next

[Anonymous Coward]

Microsoft has enormous quantities of liquid assets on hand compared to many companies. The only reason they need to borrow money for the Yahoo purchase is because they amount they are bidding is HUGE. No one can pay cash for Yahoo, and the fact that MS can even think about paying half in cash shows how much money they have in the bank.

Bidding that much may be a sign of desperation, but not because they are "strapped for cash".

Re:What happens next

[Skreems]

I dislike a number of Microsoft products as much as the next guy, but that's just ridiculous. Like it or not, billions of people have used computers running Windows to accomplish tasks they wouldn't have been able to without any computer. They might have done them faster or cheaper with another OS, but not without a computer altogether. So it's not a net negative to the economy, no matter how much you dislike them.

Re:What happens next

[noidentity]

I was attempting humor, since it says "$40", forty dollars.

Re:What happens next

[o517375]

Microsoft's enemy is Google. It doesn't make sense to kill Google's enemy, Yahoo!, especially when Microsoft itself is having trouble competing.

Re:What happens next

[Anonymous Coward]

...many/most Yahoo! engineers aren't happy with the idea of being Microsoft employees (even if they do endure it, they won't do so happily, which affects productivity).

By what transitive property do you assume to speak for Yahoo/Microsoft employees?

I've used Linux exclusively for over three years (outside of work). But, if my company were bought by Microsoft tomorrow (impossible, since my company makes more money), I can't say that I wouldn't re-evaluate my priorities and be throwing monkey-wrenches into any Microsoft-bashing post here.

- I'm not a terrorist, but I play one on TV.

Re:What happens next

[DuctTape]

If genuine, Microsoft most probably is after Yahoo's user base, not its software nor its engineers.

And how much of that user base would leave Yahoo! when Yahoo! becomes Microsoftized? It'd probably take me a while to move off all of the stuff, including email, I have on Yahoo!, but as soon as I have to get a Live account or otherwise have to run Windows to access my Yahoo! content, I'm off to Google.

DT

Re:What happens next

[Anonymous Coward]

as soon as I have to get a Live account or otherwise have to run Windows to access my Yahoo! content, I'm off to Google.

Why wait that long?

Re:What happens next

[bprime]

Don't forget about the other implication of your quote there: when stock prices drop, suddenly Microsoft's initial offer won't look so disagreeable.

Good for them!

[Hawthorne01]

Yahoo, at least, now has a small glimmer of hope in changing itself from what Jeff Jarvis calls "the last old media company" into something relevant.

Microsoft can't see beyond the desktop. Everything they do is tied to selling OS's and Office. They had absolutely nothing to offer Yahoo! beyond an aging and stale brand name.

Kudos to Yahoo!'s board for showing some cajones and nailing yet another nail into Redmond's coffin.

Re:Good for them!

[Frosty Piss]

They had absolutely nothing to offer Yahoo! beyond an aging and stale brand name.

They had absolutely nothing to offer Microsoft beyond an aging and stale brand name.

Re:Good for them!

[jt2377]

You do know MS business software (Office) along generate as much revenues as Google, right? For at least the next ten years, i don't see how Online (Cloud Computing) Office suite from Google going to beat MS Office.

Re:Good for them!

[ZerMongo]

This should not, in any way, be construed as Yahoo standing up to Microsoft. They're going to sell. They have to sell. If they outright refuse these offers by Microsoft, the shareholders will revolt, take them to court, then they'll sell. The only thing in question is how much Microsoft's willing to pay for Yahoo. Not whether or not it's going to happen.

Re:Good for them!

[calebt3]

And a semi-respectably sized user base.

Re:Good for them!

[Anonymous Coward]

Nailing the coffin eh? Do you know the first thing about MS and their money/profit/revenue? You are just a fanboy who should read something insightful before ever posting again.

Idiots

[Tanman]

Their P/E is 62. *SIXTY-TWO*

That means they don't make money. At least not compared to the already-inflated value of their stock. The value of their shares should be down in the single digits right now based on their income -- a P/E from 15-20 would be much more reasonable. Microsoft comes along and offers to buy them out for an amazing amount of money, and they turn it down?

Refusing this deal borders on illegal, assuming their job is to act in the interests of their shareholders.

Re:Idiots

[Frosty Piss]

Refusing this deal borders on illegal, assuming their job is to act in the interests of their shareholders.

Instant profit is not always in the long term benifit if it comes along with total destruction of the company. And who says short term profit is what Yahoo!'s shareholders want?

Re:Idiots

[rainhill]

"And who says short term profit is what Yahoo!'s shareholders want?"

Well, money (shareholders) always prefer instant gratification, seldom does it care about the company and its long term health, it can always move to the next company.

Re:Idiots

[Tanman]

Long-term benefit? Excuse me?

We are talking about a deal that instantly infuses into the Yahoo shareholders' bank accounts more money than the company would earn in 20 years. It IS long-term benefit, and they ARE idiots to reject it.

Insiders think it is worth $40? Who the hell are they fooling? Themselves, obviously.

Re:Idiots

[Mikachu]

Well, it looks like we'll find out what the shareholders want soon enough. Since Microsoft doesn't look like they're taking no for an answer, my guess is that they're going to try and win the shareholders over without even bothering with Yahoo's board.

Re:Idiots

[eshefer]

if you RTFA you'll see that they said "at least 40$ per share". it's not a denial it's bargaining.

what they are doing is EXACTLY in the interests of their shareholders. if MS really wants then that bad they'll have to pay more.

Re:Idiots

[calebt3]

But there is no need to kill the goose that is laying golden eggs. Or at least semi-precious stones.

Re:Idiots

[OakLEE]

What long term benefit will accrue for letting Yahoo live and letting their arrogant management run the company into the ground?

Their profits are dwindling, their effort to stimulate said profits are failing, and they are cutting their workforce by 7% because of this. I have friends at Yahoo, and the smarter ones have been looking to jump ship for months because they can see the writing on the wall. A buyout at MS would at least give these people a reason to stay (assuming MS only fires the chaff).

I think a refusal of the buyout would only accelerate a brain drain from Yahoo, as it would confirm management's arrogance, which so far has directly resulted in the company's current precarious position. Tell me, as an employee, would you rather be fired from a company now, or continue to work for another three years under constant fear/threat of being fired?

IMO, there is no longterm benefit to Yahoo's status quo, and other than MS, no one has put together a vision to change it.

Re:Idiots

[alexhard]

That is quite wrong. Anyone that owns large amounts of shares does not depend on arbitrary feelings such as "gratification", they measure money at net present value, based on their required rate of return. Depending on their required rate, $31 today may or may not be worth more than $X, Y days from now.

Re:Idiots

[Breakfast Pants]

By "shareholders" for all intents and purposes you mean mutual fund managers, if you own stock through a fund, you don't get to vote.

Re:Idiots

[ScrewMaster]

And who says short term profit is what Yahoo!'s shareholders want?

Well, as an American I can say this: if the bulk of Yahoo's shareholders are also American, then that's exactly what they want.

And that's too bad.

Re:Idiots

[Alioth]

I think Yahoo! realise that Ballmer really, really, really wants to buy them - after all, it eliminates an open source competitor. Therefore, they are betting they have Ballmer over a barrel, and can name any silly price they care to name - because Microsoft is desperate to buy them.

Re:Idiots

[icydog]

Although Yahoo's P/E is indeed 62 and that is high in many industries, it is not a valid measure alone and can vary across industries. Consider the following current P/E ratios:

Amazon: 66.00
Ebay: 115.75
Redhat: 51.11

I'm just pointing out that P/E is not a definitive measure, and that this number alone does not mean refusing borders on illegal, and does not mean the offer was an "amazing" amount of money. I do agree though, that this is a pretty good offer from MS. I think Yahoo is trying to at least put up a fight before giving in.

Re:Idiots

[MoosePirate]

That P/E is misleading since a large portion of their stock price is made up of the asset price of their minority held interests. Those earnings don't get counted for Yahoo, so it makes the PE artificially high. Yahoo's board would also argue that they have taken earnings hits recently as costs to restructure. Only a few months ago, Yahoo stock was worth more than $31, so its not inconceivable.

Re:Idiots

[Tanman]

Dot

Com

Bubble

Just because there are a LOT of stocks that are over-valued, it does not make them any less over-valued. I haven't looked it up, but I'd wager that most of the top investment brokers right now are staying away from all three of those companies.

Re:Idiots

[Breakfast Pants]

Yeah, tell that to holders of BRK

Re:Idiots

[gnuman99]

I agree. If economy stubbles, the advertising revenue will slowly dry up. Yahoo is a major loser not to accept this. If it was me, my next deal to them would be $25-29/share in 6 months.

Microsoft should wait. The only other company that could buy Yahoo would be Google, but they have no cash for that and certainly no advantage for them to have the Yahoo brand.

Re:Idiots

[eddeye]

The value of their shares should be down in the single digits right now based on their income -- a P/E from 15-20 would be much more reasonable.

Investors aren't stupid. P/E isn't the end-all, be-all of company performance. It's just one measure of income. In steady, low-growth markets, PEs around 15-20 traditionally make sense. But in high-growth markets, investors bet on future rather than current earnings. P/Es can be much higher because an expanding market brings higher income even when the company's market share remains steady. It's the stock market version of "a rising tide lifts all boats".

What was Google's P/E ratio at the time of their IPO? My back of the envelope calculation says 78. As we all know, anyone who invested in Google at that time has become a penniless fool. I mean, who wants a 500% return in 3.5 years?

Whether Yahoo fits the profile of a high-growth company is another issue. But you can't dismiss Yahoo as overpriced based soley on their P/E.

Re:Idiots

[Antique Geekmeister]

A big infusion of money is helpful to almost any business. But like dealing with Wal-mart, selling your company to Microsoft can destroy your company's productivity, flexibility, and profitability in the long term. Migrating Yahoo's software toolkit to Microsoft tools can, for example ruin their performance and create a massive cost in manpower and hardware to achieve the change.

Re:Idiots

[Anonymous Coward]

It isn't all about money.. for example..

You should sell your testicles, i'm sure you could get around 20k a piece. That 40k could seriously improve your lifestyle and perhaps give you the financial freedom to transition into a better paying job. You won't be needing them anyways.. they are only used to make smaller versions of yourself, not necessarily anything that useful.

Re:Idiots

[Anonymous Coward]

If MS goes away and comes back with a $40 offer, it's clearly worth it to them. Or have you never heard of haggling before?

("I'll pay 32 for this doohickey of yours."
"I couldn't possibly sell it for less than 40."
"I could maybe pay a little more, how's 35 sound?"
"37 is the lowest I could possibly go and you're robbing me blind."
"Done, pleasure doing business with you.")

Re:Idiots

[Anonymous Coward]

And once again, the armchair stock traders of Slashdot do a better job at analysing a proposed deal they actually know nothing about within 2 minutes than those who've received the offer, professionals as they are, have been able to do in the past weeks.

Hey, Tanman. Why don't you do a little investing on the stock market yourself? With your superior knowledge and insights, you should be a billionaire within hours, right? Right?

Re:Idiots

[UnanimousCoward]

"borders on illegal:" I luv it. The whole "maximize shareholder value" thing is deliciously ambiguous. I could take the other side and say that accepting the offer outright borders on illegal because the Board isn't exploring all possibilities (like banking on a higher M$ counter)

One word

[bobbonomo]

Hurrah!

Re:One word

[kc2keo]

Correction: Huzzah!

Re:One word

[phalse phace]

Shouldn't that be Yahoo! ?

Re:One word

[bobbonomo]

Yes, you are correct.

It was always going to happen

[MLCT]

Yahoo would have been daft to accept as it was. The position they have taken (if correct) is the obvious line - "massively undervalues". The ball is firmly back in MS's end of the court - they will be forced to put themselves into substantial debt trying to force a hostile takeover (aren't MS sharholders going to love that on - yeah go ahead and piss away our 19B cash pile for a failing company) - or give up on it and look like a coward. Ballmer always likes to play the big man - it will be interesting to see how big he reacts to this. Depending on how obsessed he is about getting his own way this could end up making the AOL Time Warner debacle look like a minor business misdemeanour decision. 60B would be a out-of-thin-air figure I could see this ending up at - that would be absolutely hilarious.

The other main option, namely attempt a takeover by proxy by trying to fill the Yahoo board has now (broadly) been nullified. If the current board is taking a position that will (if the takeover happens) make YH shareholders more money then they are not going to vote on MS stooges who would immediately accept the MS offer.

Re:It was always going to happen

[Anonymous Coward]

AOL Time Warner debacle look like a minor business misdemeanour decision

An even better comparison I heard the other day: "This is Sears and K-Mart all over again."

Re:It was always going to happen

[metlin]

Eh? You are kidding, right? 62% premium and they reject it?

Unbelievable and surreal.

The stance the board has taken is only going to make it worse when/if MS actually does do a hostile takeover.

*shakes head*

Re:It was always going to happen

[Hangtime]

This thing is not going down for $45 a share (60 billion). This is going down for $34 - $35. MSFT might be loaded but they will not go all the way to the mat. If MSFT makes a $35 offer and its not accepted...Microsoft won't have to wage a proxy fight, YHOO instititutional shareholders will do it for them. Yang and the board own like less then 6% of the company. While YHOO may point back to its high $35 price in November...a whole lot of stocks were high in November and tech is out of favor right now. MSFT backing out would take this stock to $17 in a hurry and is why ultimately MSFT wins and wins at a much lower price.

Re:It was always going to happen

[MLCT]

Of course they would. MS has made it plain they want the company, and would not give up easily - those statements made with far less subtlety than you would normally find in takeover bids (short of outright hostiles).
Yahoo have nothing to loose in attempting to shake a couple more dollars out of MS. It was a 62% premium on the back of a weak Yahoo boardroom who don't know what they are doing, coupled with poor recently reported results. It is nowhere near a 62% premium on the real worth of the company (when viewed in the context of what it is worth to MS - and ultimately in terms of worth; something is only worth what someone else is willing to pay).
MS (and given we know who is solely in charge of this, Ballmer) have made a ham fist out of this - the only way they are likely to get Yahoo now is by a hostile - and the current Yahoo share price indicates that is going to cost them a lot of money (and if the markets judge that MS will pay any price then MS could end up paying ridiculous sums to buy the stake they require as it would turn into a bull run).

Re:It was always going to happen

[Anonymous Coward]

>Eh? You are kidding, right? 62% premium and they reject it?

Yahoo was as high as $34 in October. This is just good market timing that they caught them at a low.

Re:It was always going to happen

[MLCT]

You may be right - and 60 was broadly at the upper limit (I would guess 50 odd is more likely). But I just have a bit of a feeling on this - if MS keeps giving off the signals of desperation about *wanting* Yahoo so much - to the extent that this has all been a tiny step away from being a hostile - then the institutional shareholders might think twice. If they judge that MS are stupid enough to go as high as $45 a share then they certainly aren't going to cave too soon. So far MS has played this as an "all in" hand - such that they are risking the institutionals calling their bluff.

Re:It was always going to happen

[notaprguy]

You're on track for exctly one sentence. The rest is mostly drivel. Microsoft is in the drivers seat. They have a lot of options. One is certainly to increase their bid - most reasonable people would expect them to. Who is dumb enough to offer top dollar at the beginning of a negotiation? On the other hand, they could decide to put forward a slate for Yahoo's board that would be voted on proportionally to share ownership. Guess what? More than 60% of Yahoo shares are owned by institutional investors who want to get paid. They'd certainly do what they can to get MSFT to up their bid but the last thing they want is for them to walk away and see Yahoo's share price drop to about $10/share. I have no idea how you come to the rationalization that that taking over by proxy is "nullified." MSFT gets the company either way - by making a slightly larger bid for the company at which point Yahoo shareholders demand that they sell or taking over by proxy. Calling Yahoo a failing company is just ignorant. They have lots of amazing assets that a company like Microsoft could use. Their brand is worth a lot. Which Web site is the most visited site in the US? Yahoo (if you exclude search page results from Google). They are #1 or 2 in mail and IM. They have Flickr and many other valuable tools and content properties. Yahoo is worth more to Microsoft than they are as an independent company. Comparing this to AOL/Time Warner is also just ignorant. Time Warner...while a big company...was not a Microsoft. They don't have nearly the profitability in their core businesses, the case flow or the long-term prospects for growth. Microsoft is a large company that is growing very fast.

Re:It was always going to happen

[notaprguy]

Good point. Yahoo trying to harken back to when their price was $31 is not a good negotiating tactic. Hell, Google is down $200/share since December and yahoo is no google. MSFT will get them either way without paying more than your guestimates.

Re:It was always going to happen

[Antique Geekmeister]

I agree with almost all of your reasoning, but you'd better believe that Bill Gates still maintains a noticeable influence on Microsoft policy. Ballmer couldn't pursue this without Gates' support, through Gates history as the corporate leadership and his personal knowledge of the current leadership.

Buying Yahoo will not make Microsoft smarter.

[Futurepower(R)]

It's possible to learn a lot by examining the world around you. For example, what am I bid for this half-eaten, moldy burrito? I am accepting no offers below $40.

Microsoft has proven, over many years, that it does not know how to run a search engine. Buying Yahoo will not magically make Microsoft smarter, especially since Yahoo has proven, over many years, that...

Re:Buying Yahoo will not make Microsoft smarter.

[dkleinsc]

Because once again the burrito-heavy portfolio pays off for the hungry investor.
- Dr J Zoidberg

Re:Buying Yahoo will not make Microsoft smarter.

[Anonymous Coward]

For example, what am I bid for this half-eaten, moldy burrito? I am accepting no offers below $40.

I'll take it at $41.

Then...

"What am I bid for this half-eaten, moldy burrito? I am accepting no offers below $45."

Cue greater fool...

Well, that took long enough..

[dynamo]

Most of Yahoo's value spawns from how *completely* different their company attitude comes across from stuck-up, self-important, dying companies such as microsoft.

This is backwards. Give it five or ten years, and Yahoo could be buying microsoft (and not just because Yahoo's value is going up.)

But Yahoo's value would plummet by at least 75%, according to my completly random guess, if it were a division of MS. Imagine if your yahoo mail account was suddenly an MSN account. Your Yahoo IM suddenly merges with MSN. They both become worse than trash - I cannot imagine an organization (aside from the current executive branch of the us government) that I trust less than microsoft - all incompetence aside.

If they were people, I would invite Yahoo over to a backdoor bbq. MS, on the other hand, I'd invite to.. nowhere.

- d

Re:Well, that took long enough..

[owlnation]

While I don't disagree that Microsoft is in a slow downward spiral. I'm not sure I understand the rest of your post.

Yahoo has sharks circling. This is because it's dying much faster than MS. Yahoo, is essentially an empty brand name, content, and a database -- i.e. just like AOL before it. It has executives who have never understood its client base, nor cared for one single second long enough to find out what they want. It is astonishing that it survived the 1st dotcom crash -- it was in trouble then. Even now, in its final throes, they trundle out yet another doomed to fail product in "unlimited" webhosting. Except it is not unlimited. Just another Yahoo lie that will backfire like all the rest.

The only bad thing about this is that Yahoo is so toxic that it may have brought MS down faster. Nevertheless Yahoo will be a dead name before MS is, and it won't take 5 years. Both are, however, definitely dying.

Re:Well, that took long enough..

[doktor-hladnjak]

Yup, it's true--Microsoft is dying.

Re:Well, that took long enough..

[arse maker]

Yes, Microsoft is dying so fast they have been posting record revenues and profits. http://biz.yahoo.com/prnews/080124/aqth094a.html?.v=1 To compare the strengh of yahoo verse microsoft is laughable. Yahoo has always struggled to turn a profit despite restructuring after the dot com crash, microsoft is the posterchild of profit making. Sure microsoft is dying, just like we are all dying. I think people also don't put into perspective recessions, advertising traditionaly is the worst hit. Yahoo will have trouble justifying their decision to shareholders at that point, hell even at this point. They wanted 12 months to turn it around last time microsoft came knocking with a few jumbo jets of money. I can't see any sizable future for yahoo, google will just keep eating away at them and provide and alternative to microsoft people want, yahoo will get squeezed out.

Re:Well, that took long enough..

[The One and Only]

Your Yahoo IM suddenly merges with MSN.

Already happened.

Re:Well, that took long enough..

[howlingmadhowie]

microsoft is dying. they are making huge amounts of money, but they are not successful.
this may be a strange idea for many people who equate wealth with success. microsoft has shown that if they are the only game in town, they can afford to make 75% profit on their office suite. however, the sales figures for vista are, as a percentage of total computers sold, lower than xp and openoffice.org is making huge inroads into europe, not to mention increased adoption of gnu/linux (ubuntu) and apple. 5 years ago it would have been unthinkable that most of the kids at a school would have changed to a gnu/linux distribution and placed sufficient pressure on the IT department, that they had to follow suite. but a pupil of mine (who himself is no geek) has just told me that that has happened.

microsoft is swimming in money and monopoly power. but that's all they have. they have less mindshare over our youth than at any time in the last 20 years. they well gradually turn into a hugely rich but utterly unimportant company.

Re:Well, that took long enough..

[everphilski]

Ever consider the fact that MS has shifted from an operating system company to something else?

Take a look at some of the research coming out of the MS labs and the companies they are buying ... yes, they are still producing an OS, and yes, at the moment all of their software (besides the web stuff) targets that platform, but don't be so foolish as to think everything they do - or even a majority of what they do - is the operating system. The OS gives them a window (no pun intended) to create, but I sincerely believe the company and the rest of their products will outlive Windows the Operating System.

Re:Well, that took long enough..

[notaprguy]

Slow downward spiral? Might I suggest you learn how to read an income statement: http://www.microsoft.com/msft/earnings/FY08/earn_rel_q2_08.mspx#income. Microsoft revenue grew 30% in the last quarter. Operating income grew 87%. Earnings/share grew 92%. On top of that, they raised their estimates for the rest of the year. It's worth noting for the mathematically challenged that all of those growth numbers were on top of very large bases. Thier net income was $4 billion and change on $15 billion in revenue. Let's compare that to another company on a downward spiral: General Electric. In GE's most recent quarter had net income of $6.8 billion on revenue of $48 billion. Revenue grew at 18% and earnings grew at 16%. Man, talk about two HOSED companies.

Re:Well, that took long enough..

[jonaskoelker]

Has this been confirmed by netcraft?

Re:Well, that took long enough..

[Anonymous Coward]

I'm sorry, but that link makes no sense. Only netcraft can confirm that something is dying.

Re:Well, that took long enough..

[Walter Carver]

Is this now going to replace "the BSDs are dying"? :-P

Re:Well, that took long enough..

[mqduck]

MS, on the other hand, I'd invite to.. nowhere. He'll, I'd pay for their one-way-ticket.

This is done

[Hangtime]

YHOO board comes out against, MSFT will rail that YHOO isn't worth that much, a month from now MSFT will offer a sweetened offer - call it $34 and propose its own slate of directors for the annual meeting. YHOO board will accept because they don't have a choice. MSFT will complete the purchase Jerry Yang and his cronies will go back to the bars in the Valley start their own venture capital firms or become part of one of the VCs like Kleiner-Perkins. Deal closes in the 4th quarter.

Re:This is done

[Anonymous Coward]

I'll bet you think you're smart by using the stock symbols when "talking" about Yahoo! and Microsoft. You think it makes you look knowledgeable even though in reality you have no clue what you're yammering about. You're exposed, idiot. Go back to masturbating in your mom's basement, it's the only thing you're good at.

My bet...

[Xenographic]

(4) Their bid is denied thanks to EU anti-trust regulators, but they manage to cause havoc for Yahoo anyhow by distorting their stock price.

Re:My bet...

[Anonymous Coward]

Anti-trust? Exactly what limit would Microsoft+Yahoo exceed that isn't already exceeded by Microsoft alone?

Re:My bet...

[aesiamun]

Microsoft and Yahoo are the 2nd and 3rd place players in this game...MS buying Yahoo doesn't weaken google's already 60%+ position.

An anti-trust case has no legs to stand on in this case.

Re:My bet...

[oliderid]

It won't happen. The EU can't forbid a buyout (IMHO). But They can force you to sell assets if your "new" position is a threat for a fair market.

The gap between Google and Microsoft+Yahoo (in terms of search engine, advertisings, etc) is big. I don't see any reason why the EU would have to react.

Re:My bet...

[dpninerSLASH]

Microsoft and Yahoo are the 2nd and 3rd place players in this game...MS buying Yahoo doesn't weaken google's already 60%+ position.

That's Microsoft's biggest folly: They refuse to admit when an approach is failing. If they had any real ability to compete in this area, they would simply save their $$$ and drive Yahoo! out of business.

Microsoft will never vanish, but with the gradual migration towards SaaS and open source roots growing stronger every day, I can easily imagine a future whereby they become highly marginalized. Fortunately, when they're no longer large enough to be a threat to most other tech companies, their obnoxious business practices will be curtailed by the community.

Re:My bet...

[Breakfast Pants]

I agree, they would take action if Microsoft tied it into the desktop in a way that Google couldn't compete with, but they wouldn't pre-emptively kill the deal (they might put stipulations on it however).

Re:My bet...

[stony3k]

Overwhelming market share in the web-based email and (more importantly) the IM market, especially in Europe where AIM has a much smaller market share.

Re:My bet...

[Anonymous Coward]

They'd own 80% of the online email market, and a high percentage of instant messaging, especially in Asia. Search isn't the only thing people do online.

The FTC should reject this.

[Jane Q. Public]

Come on, folks. Nobody but Microsoft thinks this is a Good Idea. I mean nobody. Microsoft has enough monopoly-like leverage as it is, without using that to leverage itself into even more markets where it could throw its weight around. In case nobody has noticed, there is a lot of weight to throw. Just try to heft Vista, for example. My computer was two pounds heavier after the install.

Re:The FTC should reject this.

[quanticle]

If the FTC should be acting against anyone in the search space, it should be Google. Even if Microsoft and Yahoo combine their user-bases with no losses, their combined share of the search space will still be around 25%, as compared to Google, who has close to 60% market share in the US..

Re:The FTC should reject this.

[Jane Q. Public]

You make a good point, but it is entirely separate from the point I was trying to make. For Microsoft, Yahoo represents something of a "vertical" market. Why should a company that makes content PLAYERS (Microsoft's Media Player, for example, and Zune), also be allowed to get into the markets of content PROVIDER (yahoo, to some degree) or content CARRIER (also yahoo, to some degree)? That is the kind of thing that the FTC is supposed to look at very closely.

Re:The FTC should reject this.

[quanticle]

Isn't Microsoft also in the content provider space? I thought that they had their own music store.

Re:The FTC should reject this.

[Anonymous Coward]

That would be fine, except Yahoo and Microsoft do a lot more than just search. Why do people keep pretending that Microsoft is like Ask.com, i.e. only a player in the search space? They do a whole lot more, and *that* is what they would be leveraging after they merge with Yahoo.

So, why don't you quote the market share MS+Yahoo would have in the online email market, or the IM market, particularly in Asia? That would be a lot more honest than cherry-picking the *one* market where Microsoft and Yahoo have lost.

Microsoft will borrow money to buy a losing Yahoo.

[Futurepower(R)]

"The offer was $31 in cash OR 0.9509 of a share of Microsoft common stock."

Yes but, as I understand it, Microsoft's offer of real money was only up to half of the total.

board incentives

[Normal_Deviate]

After due consideration, Yahoo's board members have decided that they prefer to keep their jobs, which they would lose in the event of takeover. Somewhat more difficult was the task of determining that $39.99/share was the highest offer they could reject on behalf of shareholders without being sued for breach of their fiduciary duty. In a properly functioning market (that is, without ethically dubious anti-takeover provisions in the corporate charter) nobody would really care what the board members thought about the offer.

Re:board incentives

[jack455]

I don't mean to in any way compare hotmail to yahoo, but Hotmail used to be a popular, valuable product. Now that it is in MS' grips it sucks. MSN accounts are not particularly popular with techies (except for MS fanboys and people like me whose tech jobs allow only windows messenger at work). Assuming people bought YH00 stock because they wanted it, they would probably support Yahoo outsourcing their ad/search to google instead of getting engulfed by MS. If I owned YH00 stock I would prefer that over cash/MS stock especially since MS is not likely to gain any benefit from this acquisition. What exactly does Yahoo do that doesn't compete with something MS already does/is starting to do?

Maybe this will be good for Yahoo

[incer]

If Microsoft doesn't buy Yahoo, who says that no one else will take up a few shares, now that the spotlight's on them again (even if only for a brief moment), thanks to this offer? Also those who bought in anticipation for the takeover will probably be selling now...

Ballmer: "Google's not a real company..."

[Futurepower(R)]

There may be some Slashdot readers who don't know the story about the chair: Ballmer Throws A Chair At "F*ing Google".

Quotes:

At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: "Fucking Eric Schmidt is a fucking pussy. I'm going to fucking bury that guy, I have done it before, and I will do it again. I'm going to fucking kill Google." ....

Thereafter, Mr. Ballmer resumed trying to persuade me to stay... Among other things, Mr. Ballmer told me that "Google's not a real company. It's a house of cards."

Quoted from legal papers in a court case brought by Microsoft.

Re:Ballmer: "Google's not a real company..."

[dotancohen]

Of course Google is not a real company. If Google was a real company, then Steve wouldn't be buying their competitor. They'd be buying Google.

Re:Ballmer: "Google's not a real company..."

[timmarhy]

Ballmer is correct to an extent - google and yahoo ARE a house of cards, completely reliant on the fickle advertising market and pumped up share prices.

yahoo shows this in their insane logic that shares in their company are worth 2x what they are selling for in the market.

Re:Ballmer: "Google's not a real company..."

[glitch23]

At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: "Fucking Eric Schmidt is a fucking pussy. I'm going to fucking bury that guy, I have done it before, and I will do it again. I'm going to fucking kill Google." ....

Just goes to show me that even on the off chance I would want to work for MS, had an interview, and was offered a position that I would not take it after hearing that. To have a CEO who can't use professional language is just showing that the company needs to look elsewhere for a CEO, not to mention it shows his lack of variety and knowledge of the English language. But maybe they have the cream of the crop already. After all, how many CEOs have morals and ethics?

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

whereas microsoft is reliant on...?

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

Um, people's reliance on the Windows OS, Office, etc?

Re:Ballmer: "Google's not a real company..."

[hostyle]

An entrenched monopoly on x86 Operating Systems where the likes of Dell must bend over and sign their souls away and the industry leading Office Suite?

Re:Ballmer: "Google's not a real company..."

[HUADPE]

Buyout offers are consistently above market prices, consider the following.

1/2 of 1% of a company's outstanding shares being traded in a given day is a VERY high volume. This means that even on a big news day, well over 99% of shareholders still think owning the stock is a good idea. They value it therefore at some amount higher than the going price.

In order to get these people to sell to a buyout offer, you have to make it go from 1/2 of 1% thinking that they should sell to 50%+1. To convince all the shareholders between .5% and 50.0000001% to sell means you have to raise the price, substantially.

Re:Ballmer: "Google's not a real company..."

[Vectronic]

Wait holdup...

So because Ballmer had a little breakdown, and said some things he shouldnt have, you are judging his entire ability to understand the english language?

Not that I agree with Ballmer, or that I like him on any level (not saying I dont, only that I dont really know him) but its hard to say what led up to these remarks, and I dont mean the previous few sentences, I mean who knows what was happening in his life at that time, for all we know his daughter could have ran away the day before, or maybe his mother died, etc, etc.

I cant think of anyone thats at the head, or close to the head of a business, nevemind a corporation that hasnt lost it at least once...

Re:Ballmer: "Google's not a real company..."

[c]

> Ballmer is correct to an extent - google and yahoo ARE a house of
> cards, completely reliant on the fickle advertising market and pumped
> up share prices.

This would be the same market Ballmer proposes to run Microsoft into debt in order to buy into?

c.

Re:Ballmer: "Google's not a real company..."

[Comatose51]

Good luck using the Internet and its vast store of information without Google or Yahoo! or any decent search engine. What are we going to do instead? Use Gopher? Google is what makes the Internet accessible to people. There's a TON of value in that alone. I realized the other day that instead of buying a book, doing traditional research, etc. I usually just Google for an answer when I have a technical problem. Do you realize the immense value in that? If Google suddenly started charging for search, I would pay for it. The search engine is a vital part of the Internet or any vast collection of information.

Any tech company can be called a "house of cards". After all, what real assets do they own other than some buildings and equipment? The value of a tech company isn't measure that way. The foundation is the people they have and the talent pool they can draw from. Google has an immense talent pool that has shown itself being capable of solving many, many problems that bring value to people's lives. Advertising is just one avenue they use to monetize that value.

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

"completely reliant on the fickle advertising market"

When is somebody going to step back and look at this phrase? Yeah, come to think of it, every media format on Earth, from newspapers to radio stations to magazines to TV stations, has companies that are completely reliant on the fickle advertising market. Been going on for 200 years+ of American capitalism; I don't see it stalling any time soon.

Re:Ballmer: "Google's not a real company..."

[Surt]

There are at least 3 search engines with quality competitive to google that are not yahoo.
If google started charging for search, would you seriously not investigate the nearly equally good alternatives?

Re:Ballmer: "Google's not a real company..."

[dpninerSLASH]

From all accounts it seems as though Yahoo! is afraid of Microsoft, as they should be.

Right now they've got Steve Ballmer in a corner. This is a man who is driven to win at all costs. Despite the flury of lawyers and PR folks advising against a hostile take over, I can't see him backing down. His identity and authority is too closely linked to his gratification.

Yahoo has no choice but to try to work out some sort of partnership with Google, if only for its own survival. Fortunately, I do not see a way that Microsoft can ever "beat" Google. Google has more raw talent.

Re:Ballmer: "Google's not a real company..."

[quanticle]

Not necessarily. You're not making a distinction between voting and non-voting shares. In order to achieve a buyout, Microsoft only has to convince the voting shareholders, which may be a substantially smaller number than the total shareholders.

Re:Ballmer: "Google's not a real company..."

[pravuil]

Yes, MS is primarily a software company. Then why are they so threatened by Google's marketing machine then? Probably because Google shelters a lot of patents and companies that hold patents that competes against MS.

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

dude.. there is some truth to this.

Eric Schmidt used run little company called Novell. It didn't used to be a little company. He also used to be at Sun. Both companies pretty much lost out whenever they took on Microsoft

I think the Yahoo board should have taken Microsoft's money. They clearly have no idea how to turn things around.

Re:Ballmer: "Google's not a real company..."

[ScrewMaster]

Sure he would ... he's just saying that Google has value, that's all. And I agree: no library is of much use without an index.

Re:Ballmer: "Google's not a real company..."

[buravirgil]

Advertising may be fickle, but it's a constant.
The market may rise and fall, but endeavor and scarcity are constant.

Google, by offering a simple utility, by openly indicating a "sponsored link" while Yahoo and Altavista quietly took money to do so, created a successful business model. Younger users may not remember to what insane degree AOL exploited screen real-estate-- I was inadverdantly clicking ads three times a minute just trying to navigate. The immediate attraction of Google, Craig's List and Wikipedia's attention to white space was a welcomed reprieve. By Ballmer's standard, a true business model is one that exploits captive consumers-- like an airport, like Microsoft, like AOL. What angers Ballmer and others is their lack of control in the face of innovation.

Re:Ballmer: "Google's not a real company..."

[glitch23]

I cant think of anyone thats at the head, or close to the head of a business, nevemind a corporation that hasnt lost it at least once...

I don't deny that being any CxO of a company doesn't come with its own set of stressors but some people are better at handling those stressors than others. Some children handle stress at home by being bullies at school while some kids when they grow up will take up boxing instead of beating up on an innocent bystandard. There are ways to deal with anger and many people that have issues with it express it physically (throwing chairs anyone?). But there are verbal ways to express it as well and obviously Ballmer has issues with that too. Unless you just don't care you can control your anger and what you say in public as opposed to a private business meeting, as opposed to how you talk to your wife and kids at home (or in public for that matter). It is called decorum. Some people have it and some don't. Those who are in the public spotlight should have more than most people because they are representing a company. Shareholdres, customers and employees (both existing and potential) take notice of those things.

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

Microsoft weren't going to be 'run into debt'. Half of the offer was cash and the other half was stock - no borrowing whatsoever.

There was talk of them borrowing, but only so they didn't run down nearly all of their cash reserve - they still would have been in positive equity.

Re:Ballmer: "Google's not a real company..."

[webmaster404]

Google is reliant on the web and the web is basically what is killing MS. With high-speed internet MS is just about obsolete, in a few hours you can download a Linux OS that offers just as much if not more then what MS offers not to mention if you know where to look you can download XP/Vista and get a serial code to work with it. As for Office, Open Office has become the office suite of choice for those who see no need to spend $99 on a single program. Google also is cross-platform, most software works on Windows, Linux and Mac and naturally Google search works on any browser on any platform without proprietary addons. Google is just a natural product of the web which is what is killing MS more then any software, more then Linux is, more then Apple can ever hope to. MS represents the 80s to early 90s model of software, software that is bought and sold by companies, Google is a service and most softwiare is free to all (as in beer) and because they figured out how to make internet advertising successful, they don't annoy the users by displaying pop-ups and too much Flash.

Re:Ballmer: "Google's not a real company..."

[Viceroy Potatohead]

I totally agree with that. And we're still in the Wild West days of the Internet. Look at Google's purchase of YouTube. That was a fsck load of money for what was basically a minor entity. They bought a popular saloon at the centre of things, without knowing whether the development on the other side of town will become the actual town, or if gold will be discovered fifty miles away, or if the local one will dry up. So many big players rise from nothing (such as Google itself), and without any predictable pattern, that it's kind of ridiculous to spend that much on a company that you can't recoup a decent amount of your investment by stripping its assets if the market tanks. (Since there really wouldn't be any assets worth stripping.)

It wasn't very long ago that the dot-com bubble burst, I kind of wonder if we're due for another one. I guess if the purchase is profitable enough in the short term, then it would be worth it, but that seems like a pretty unstable strategy to me, and I doubt it's the case for most of these acquisitions.

Re:Ballmer: "Google's not a real company..."

[Provocateur]

...and a new chair...

Re:Ballmer: "Google's not a real company..."

[totally bogus dude]

The new thing here is the internet, and people becoming used to the idea that you don't need to look at ads in order to make use of it. How many of us AdBlock? How many people have switched to Firefox after seeing how wonderfully effective it is?

You use radio, newspapers and TV as examples of ad-supported media that has stood the test of time. As a single data point, I can tell you that I haven't listened to commercial radio since early high school (around '95 or so). After I started listening to Triple J (government-funded station with no ads) I found commercial radio to be almost painful in comparison, what with the constant obnoxious loud adverts, and annoying promos crowing about how they're doing an ad-free hour or whatever. Now that my and JJJ's music taste have diverged I mostly listen to my own collection. I stopped watching TV a long time ago too; I download any programmes I want to watch because it's more convenient and don't constantly interrupt my viewing with ads. I've never even bought a newspaper; if I want news I can find it online.

The big thing is that once you stop watching or hearing ads for a while, when you do encounter them you find them really, really annoying -- and this just makes you want to avoid them even more, even if it requires a bit of extra effort in order to do so. Any company that relies on ads is in a very scary position because the fact is the vast majority of people don't simply "not like" advertising, they actually dislike it. When your primary product is something people not only don't want but actively seek to avoid, you're going to have problems.

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

"the web is basically what is killing MS"

Oh yes, Microsoft is dying. That's why every article on Slashdot tries to rip them apart, why states are trying to extend the judgement against MS, and why Europeans are resorting to protectionism because they can't compete. It's all because Microsoft is dying. Those damn internet tubes are just killing them.

Re:Ballmer: "Google's not a real company..."

[kestasjk]

Unless the library is massive, has 5 floors and no elevators, there are monsters everywhere, and the index is floating below the ceiling.

Re:Ballmer: "Google's not a real company..."

[the_womble]

I do not use Adblock, but I find Noscript blocks the intrusvie ads anyway. Most people use neither and carry on watching the ads.

I do not watch TV either, but we are in a tiny minority.

Adblock also only works effectively because there has been very little effort to stop it working, if more people used it there woudl be more done to stop it being effective: embedding ads within the content server-side, making slight changes to markup, etc.

Finally, I really do hope that ads do keep being effective, because if they disappear, they are likely to be replaced by advertorials, which I really loathe.

Re:Ballmer: "Google's not a real company..."

[Bluesman]

It may be a smaller number, but probably a much harder group to convince. A voting member has a much more personal stake in the company than someone who just bought the stock hoping to sell at a higher price.

If you were sitting on the board, and Microsoft came along with this offer, would you want to sell to them, lose your control over Yahoo's future, etc.?

Re:Ballmer: "Google's not a real company..."

[dave87656]

"the web is basically what is killing MS"

Oh yes, Microsoft is dying. That's why every article on Slashdot tries to rip them apart, why states are trying to extend the judgement against MS, and why Europeans are resorting to protectionism because they can't compete. It's all because Microsoft is dying. Those damn internet tubes are just killing them. You have to "try" to rip MS apart, you just have to look at the facts. MS is a company which keeps customers by lock-in and by trying to own and control protocols.

The States and Europe are: (1) enforcing the rules that Microsoft must give access to it's protocols so other competitors aren't locked out and (2) make sure that a single company doesn't own their data (e.g. DOC and XLS formats).

MS is a monopoly, which is perfectly legal, but there are rules to ensure that competitors are not locked out. The question really is, if MS thinks it is better, why is it so against competition?

Re:Ballmer: "Google's not a real company..."

[mikeydb]

"in a few hours you can download a Linux OS that offers just as much if not more then what MS offers"

In a few hours you could download dozens of Linux OS's..

Re:Ballmer: "Google's not a real company..."

[Moochman]

At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office.

After seeing this I am not surprised.

Re:Ballmer: "Google's not a real company..."

[liam193]

The majority of users don't hate advertising, they hate the advertising they have been given. Google is a unique company on the net; their success is largely due to the fact that there is not a concentrated effort to remove their advertisements at all costs. Why? There is a perception by the users that Google's advertisements are not intrusive and annoying. So what's special about Google's advertising methodology:

• They don't use images - Advertisements that uses images, and in particular large flashing animate images, on a web page speaks the following to me:
  
  • The organization believes I am too stupid to read their single line entry telling me about their product.
  • The organization doesn't value my time because they are using their advertisement not simply to compliment my experience, but they are trying at all costs to waste my time in finding the information that they pushed off the page with their advertisement.
  • I do not want to do business with this organization ever. In fact, I might want to take note of their name and consider using a competitor who hasn't shown this disregard for their customer's time.
  
  
• Most, if not all, of the advertisements are in some way related to what I am viewing.
  
  • I am out there searching for a news article on a recent event and having the main advertisement tell me about a new medicine for something.
  • The advertisements are only slightly different from the search results (shaded background) and may actually be a valid choice for what I'm trying to find.
  
  
• The front page doesn't have advertisements. If you are a search company, your front page should be a search page. It shouldn't have a ton of news and advertisements on it. If I want news, I will click on a news link or go to news.whatever.com. I don't need a page like www.yahoo.com that during network slowness is going to take time to load.

Re:Ballmer: "Google's not a real company..."

[rtb61]

The catch with that logic is it was not a 100% cash offer. It was a 50% cash and 50% M$ stock offer, now attempting to dump $22.3 billion dollars worth of M$ stock would mean in effect a substantial collapse in the purchase offer as the M$ stock price collapsed. After all M$ already took a substantial negative hit as soon as M$ admitted defeat in the Internet marketplace and was forced to make the offer to buy Yahoo.

While the yahoo board would obviously be tempted with a cash only offer, getting stuck with M$ stock at this time would be nothing the Yahoo board could, in all good conscience, recommend to its share holders. Oddly enough, a substantial portion of the rise in Yahoo share price that resulted from M$'s bid will remain because of M$ admission of defeat in the Internet market place, simultaneously that admission of defeat does not bode well for M$.

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

"There are at least 3 search engines with quality competitive to google(sic) that are not yahoo(sic)."

So um... do we have to pay you to learn the identities of these quality search engines? Perhaps the URL/name is too long to type? Maybe Google didn't return any "quality" search engines you could name? Maybe the boss walked up before you finished your thought? No, because you wouldn't have typed the "charging" sentence.

I am not sure how you got "insightful". I do know I wouldn't want to read any of your term papers or code documentation. :D

In all the glory of /., at least tell me live.com isn't one of these "quality" engines. PLEASE!

Re:Ballmer: "Google's not a real company..."

[bluefoxlucid]

Yahoo doesn't want to sell, so they're twisting MS' arm. Basically they're pumping up their shareholders' greed, making their stock prices go up, and MS doesn't have the money (they have $20bn on hand and in short-term investments, not $23bn, so have to take a few billion in debt just to pay half in cash). If Microsoft bites, so be it; but it's going to hurt them way more than it'll hurt Yahoo (who, again, does not want to sell).

Re:Ballmer: "Google's not a real company..."

[bluefoxlucid]

Liddell didn't say how much Microsoft would borrow. The company had $21 billion in cash and short-term investments as of Dec. 31 -- significantly less than in the past, following a series of share buybacks and other initiatives that have reduced the company's cash holdings.

http://blog.seattlepi.nwsource.com/microsoft/archives/130975.asp

They propose $44.6bn, $22.3bn in cash and the rest in MS stock. $20bn - $22.3bn == ($2.3bn), so Microsoft has to physically borrow $2.3bn of cash. That's called debt. They don't have the liquid assets to afford the deal. The next thing that comes after this is selling off physical assets, cutting employees, mortgaging assets, and then death. Microsoft needs to turn a profit to follow this cycle backwards (i.e. to pay off their debt, or to start at any point before death and head towards paying off their debt).

Re:Ballmer: "Google's not a real company..."

[DMUTPeregrine]

Clever use of Dimension Door + Immovable rods. Those 2 can solve most problems with magical libraries.

Re:Ballmer: "Google's not a real company..."

[Herby Sagues]

Because any business where you rely on selling IP is vulnerable to some company building products identical to yours and giving them away for free. Sun used to do that. The reason Sun failed is because they didn't have enough resources to build product that were completely competitive, and even if you have a free option, a paid product makes sense if it gives you what you need that the free product does not, or even if it saves you enough time. But Google in a few years might have enough money to spend a few billion dollars in building a real Word alternative and give it away for free, hurting Microsoft a lot. Of course, MS can do the same on Google's turf as well. But it is enough for one of the companies to show intentions on hurting the other company in its core areas, for the other company being forced to do the same thing. It doesn't have a lot to do with patents.

Re:Ballmer: "Google's not a real company..."

[Surt]

altavista
ask
msn

Do you inject sic's for fun, to try to disparage, or do you not accept conventional internet names?

Re:Ballmer: "Google's not a real company..."

[Anonymous Coward]

That's great, but how would he find them without google?

Re:Ballmer: "Google's not a real company..."

[Floritard]

So what you're saying is that Microsoft is a house of cards? How ironic.

Re:Ballmer: "Google's not a real company..."

[Surt]

Word of mouth, advertising, wikipedia?
How did people find google?

Thank God.

[F34nor]

As a share holder in Microsoft I think that Microsoft has way better things to do with my retained earnings than pay too much for nothing right before the whole economy tanks.

He's an idea. Sell you stupid DRM pipe dreams down the river of wasted time and turn into what you should be, a DIVIDEND paying LOW GROWTH utility company. Make a good operating system with no bells or whistles that will pass any anti-trust case, sell it for a low enough price that the trouble of downloading a bit torrent crack isn't worth it. Make it so I can add/remove modules over the Internet at will for low low prices. Then make a a version that looks fucking fantastic and sell it like a Mac for a premium to fanboys and people who think translucent colored baubles are the shit.

Someone over there has finally woken up. I have been teaching Office 2007 and for god's sake it's a great product. 90% of the things that have made want to skull fuck the assholes in the Office department to death are gone. The menu system is great. The Page layout break controls are great. The automatic formating is now controllable. Best of fucking all you can now set the default action for paste to be text only.

I want Microsoft to stop being a bitch like Sony. (Don't FUCKING sue yourself.) Don't get delusions of being a media company or and Internet company you twits. Give me my fucking retained earnings as a dividend, make Office for a profit, make Server for a large profit, and make Windows so it works underwater in space, in the future, across standards, platforms, without a hoot because it is a god damn utility that doesn't give a fuck because everyone has to use it and doesn't hate it because it just fucking does its job come hell or high water.

Re:Thank God.

[LetterRip]

"Someone over there has finally woken up. I have been teaching Office 2007 and for god's sake it's a great product"

For Excel 2007 they've made adjusting charts extremely painful and non obvious. To me that is a huge downside - the rest of the changes I'm fairly neutral on. Spreading the Blender interface to more programs is great of course (Ribbon is essentially a port of the Blender buttons interface).

LetterRip

Re:Thank God.

[jo42]

Make a good operating system That would require smart, intelligent people to implement, i.e. engineer types, not a bunch of gibbering MBA twits.

Office 2007 ... it's a great product I've been using Office from the olden days when Word and Excel where standalone products. I hate the new version. Biggest fuster cluck being that Outlook uses Word to render HTML emails. At least in Office 2003 you could turn that idiocy off.

Re:Thank God.

[Mspangler]

Dogbert's strategy comes to mind.

Make a bid, which is rejected.
Generate a massive amount of negative media buzz, causing the stock price to fall.
Repeat the original bid "I offer $31 for your company", which is now accepted with relief "$31 a share is more than fair."
Dogbert: "Yeah, $31 'a share' would have been fair." implying they just sold the entire company for $31,being too paniced to read the fine print.

We'll have to wait and see how this high-stakes corporate waltz plays out.

Re:Thank God.

[kramerd]

I can't really agree with you on this. The way that MS has built itself to where it is was by not paying dividends for a long time. MS generally got away with this because the company was providing more value for my investment than I could make elsewhere. This takeover bid for yahoo is done for essentially the same purpose: together, MS and yahoo are much better than the sum of their individual parts. MS went out on a limb and threw in a premium for yahoo, who is only rejecting the offer because they think they can get an extra dollar or two per share. As for MS not being an internet company? The percentage of US population using windows and IE as a default is ridiculous. To create an OS for low prices is to throw away the brand image. The only people who complain about MS are stupid fanboys who are willing to pay the price that MS charges. The percentage of businesses that use (and continue to use) office is the largest portion of MS sales. To claim that these business entities want something flashy rather than something useful is like saying that I want to pay $12 for a McDonalds cheeseburger and for them to cook it with Kobe beef. Its just unreasonable for my cookie-cutter software needs. As for the recession that you allude to, our economy is already tanking. Business is down this year. Just because Bernanke isnt calling it a recession doesnt mean we arent in one. Open your eyes people. I got off track here, but my point is that generally retained earnings should not be given out as a dividend. Because our economy is going negative, it is a great time to use RE to buy out competitors at a discount. MS generally does not have enough debt, which hurts ROI (imagine how high the stock price would go if they increased debt just a bit. Now look at what adding yahoo into MS does...suddenly 45 billion doesnt seem like such a bad deal)

Re:Thank God.

[rastoboy29]

Right on.  Right on the money.

Still, my money's on them buying the moldy burrito another poster mentioned.

Re:Thank God.

[pklinken]

Are all MSFT share holders this profane ?

Re:Thank God.

[wondercool]

Why do you have shares in MS if you don't like them?

Seems you like their economic strategy? Or did you buy shares to be able to go to their shareholder meetings and try to influence their politics?

Re:Thank God.

[F34nor]

Microsoft built itself by being ruthless. Then they built themselves by leveraging their monopoly. Now they have pretty much filled the entire market space and have no room left to grow except by extracting payment form the people who use them but don't pay. You might be right if they had any growth left but they don't. They have been trading sideways for a long, long time because they have exhausted their growth they are in effect a climax community. Now they try and create growth by buying companies outside their core business model that end up doing nothing. If everyone one on the planet who uses Windows paid, even a small amount for it, they would be on a gravy train till the end of time.

As for business they don't want something flashy and I never implied they did, hence the fanboys reference. Businesses want a utility, something that turns on, does its job, and turns off with a low TCO. They don't want 3d alt-tab, they don't want their depreciated hardware that is still useful to be made obsolete by software when all the workers use is Office. Honestly if you don't play games and maintain your equipment you can get away with a Pentium 3 or Pentium M hardware for most non-technical business work. Granted Linux makes that even easier but Windows has the market saturated and that's the reality.

As for Yahoo I just don't see the synergies. What does yahoo provide? Nothing. They will bastardize the brand by making it MSYahooNBCForBobLive.Net and they what do you have, a parallel mail system to hotmail and a directory, a search engine and a portal. Yahoo will not make YahooLive.net with moonlight enhanced flashiness competitive with Google. You will have a Chrysler Benz takeover where one group reduces the effectiveness of the other and you are left with a taste in your mouth best described by Fry upon eating a "Fresh" Egg Salad Sandwich, "It's like there's a party in my mouth, and everybody is throwing up."

Re:Thank God.

[that this is not und]

The bone I have to pick with Office is that when I am down in the lab taking readings, punching numbers into Excel, I like to hit alt-f-s once in awhile to save the excel file. If I leave Clippy up and running while I'm doing that kind of stuff, after awhile it pops up the 'light bulb' and suggests that I can click on a 'save' button on the toolbar.

That is an absolutely idiotic suggestion, in a setting where I am not some drone gripping the mouse to feel safe.

The impression that I have gotten is that with the latest kludge from Microsoft, alt-f-s won't be there. Microsoft's Clippy-shit will FORCE the issue.

I'm sorry, but if I need to reach over to use a slow-down device like a mouse to save a file, the usability of the product has deteriorated.

Re:Thank God.

[doktor-hladnjak]

Actually, alt-f-s should still work even in versions as new as Office 2007 with the ribbon because legacy menu keyboarding is still supported even if the menus themselves are inaccessible. However, you could even save yourself more trouble by hitting Ctrl-S to save or at least turning Clip-it off in the options dialog.

Re:Thank God.

[Anonymous Coward]

For all your complaining, if you really disagree with their strategy, vote with your money, sell your shares. If you are holding on to your shares, obviously you think the shares have value. Then their strategy has value. If you keep your shares because your money is better invested in MSFT than anywhere else, then obviously their strategy is better than anyone else's.

Re:Thank God.

[F34nor]

Clippy is gone. Ctrl-S still works, Alt now brings up a letter for each item on the ribbon, pressing that letter takes you to the next level of menu items. You can now use Word/Excel without a mouse even if you are shortcuttarded.

Re:Thank God.

[F34nor]

Profane means to profane the temple, saying "god damn" is profane.
Vulgarity means being common from the vulgate or the square, saying "fuck" is vulgar.
Progarity I made up, saying "god fucking damn it" is vulgfanity.

Yahoo is bluffing - and plays lousy chess

[mark99]

Microsoft doesn't really need Yahoo - it just looked cheap at $19. They can walk away and persue any of a dozen other strategies. They probably just want the advertising customers - and can might even get them by buying AOL for much less.

Most of Microsoft's business are thriving - Yahoo is not.

The numbers are sobering. Yahoo's stock owners will not get a better chance than this. For their sake I hope they are just bluffing to try and get their price up - because there is no other reasonable strategy on the table.

WTF?

[ohtani]

I don't get why people are bitching at Yahoo! over this. Do you WANT Microsoft to own them? I don't care WHY they turned it down, I'm just glad they did, I personally don't want to see it happen at all! I'm not even sure if the FTC would like it much.

Re:WTF?

[alexgieg]

Do you WANT Microsoft to own them?

I, personally, don't care either way. Until 2002 or so I was a huge Yahoo user. Now, except for some occasional visits to Flikr, and for being subscribed to some YahooGroups mailing lists, many of which I in fact was a subscriber of since it still was an independent company called eGroups, I hardly ever remember Yahoo exists. Now, if Microsoft were trying to acquire Google, then I'd worry. But the way things are, it acquiring Yahoo doesn't matter much.

Re:WTF?

[eap]

I don't get why people are bitching at Yahoo! over this. Do you WANT Microsoft to own them? I don't care WHY they turned it down, I'm just glad they did, I personally don't want to see it happen at all! I'm not even sure if the FTC would like it much. The Bushies gave them a secret head-nod on the antitrust thing. Otherwise, they would not have made the offer.

Re:Microsoft will borrow money to buy a losing Yah

[ejdmoo]

That's still pretty damn good. A lot of these kinds of deals involve stock only, no cash.

I agree

[OMNIpotusCOM]

The only thing the parent needs is some cool, blue, semi-translucent baubles and a Star Trek reference.

Re:I agree

[Epsillon]

cool, blue, semi-translucent baubles and a Star Trek reference

You missed these then?

make Windows so it works underwater

Doesn't get much more blue (OK, electric arcs contain more UV, but it *looks* blue) or translucent and, if it's the North Atlantic, cool is an understatement.

[and] in space

As in lost. Danger, Will Robinson! (IMHO, the first iteration of GPF)

Only a silly investor gets sentimental

[EmbeddedJanitor]

Sure, you can invest out of ethical reasons, but face it most investors are out to make money. And yes, you're correct, this does lead to unsustainable business practices but so does the whole Wall St model of quater-to-quarter business and the demand for growth. If you're expecting to find anything other that quarter-to-quarter profits and greed you got off the subway at the wrong station. City Mission is a few stops along.

So.... Yahoo! won't come easy, MS will just mount a hostile take over. That won't slow them for long. If anything a Yahoo rejection will lower stock price making it cheaper for MS.

Something stupid this way comes....

[asaivan]

Why do I have the overwhelming sense that something immensely stupid is about to occur? I've got my popcorn ready. Who knows, SCO did it...they banked everything on a whim. Maybe M$ will follow suit and bank everything on a hostile takeover. I wouldn't put it past Ballmer. But with the insanity that seems to be taking firm hold of the world and everything in it, I wouldn't be surprised if Ballmer, in a monumental display of egotistical machismo, tries to take down Yahoo, and his own company with it.

The clue train.....

[budword]

The clue train has not pulled into the yahoo station yet. They will only figure it out once yahoo is a penny stock. I figure, 7 or 8 years. I used to use yahoo email as my primary, but it's slow, and now they make you click through their home page, just for the extra hits. It's irritating. I've moved on to a gmail address. I haven't used yahoo search in years. Has anyone else here ? Yahoo got out of the auction biz a long time ago. They are giving up on the streaming music biz. What's left for them ? That makes any money I mean. Movie time look ups and games ? Personals maybe. Even there, craigslist and similar services are eating their lunch. It's only a matter of time now. The market know it, but the board ? The clue train is going to pull right through the station there, and the board will never even know it was there.

Re:The clue train.....

[vespacide2]

I used to use yahoo email as my primary, but it's slow, and now they make you click through their home page, just for the extra hits.

No they don't. What are you talking about?
I use both Gmail and Yahoo Mail every day and I have to disagree with you. IMO Yahoo mail is better. It's never slow. (unlike Gmail which seems slow to me consistently -maybe because I'm using https?)
Yahoo search? I use it every now and then (I like google), not too much, the the thing is I don't mind using it. On the other hand, I would never use MS search. I don't trust it.
Craigslist personals do not really compete with yahoo personals. (IMO) Have you ever used them? They are two completely different approaches to personals.

Even there, craigslist and similar services are eating their lunch. It's only a matter of time now.

I don't really get the feeling that yahoo is dying at all.

Re:The clue train.....

[that this is not und]

Is gmail slow? I guess I haven't noticed any lags when my mail client connects to their pop server. Could be, I suppose. When I open up Sylpheed, all my gmail messages are in there where I expect them to be.

It is compatibility problem really

[Ilgaz]

FreeBSD doesn't work well with Windows. It is not a joke. If it worked (or works) it could be a huge disaster for both companies. Yahoo buyout is not some "dotcom startup invented something, lets buy it" thing, 46 billion is a huge money even for Microsoft. They can't say "Oh it didn't work" and turn their backs.

Companies are not compatible with each other. Yahoo is a open source powered services giant. MS is Windows maker who struggles to make Windows more credible in large installations. Would MS pay $46 billion to further advertise open source technologies and operating systems like FreeBSD?

I suggest Slashdot people who thinks Yahoo is lame because of their homepage check http://developer.yahoo.com/ to see what Yahoo actually is.

Re:It is compatibility problem really

[Conley Index]

I suggest Slashdot people who thinks Yahoo is lame because of their homepage check http://developer.yahoo.com/ to see what Yahoo actually is. Huge Flash sign thanks to Flashblock... lame side indeed.

Re:It is compatibility problem really

[Ilgaz]

I suggest Slashdot people who thinks Yahoo is lame because of their homepage check http://developer.yahoo.com/ to see what Yahoo actually is. Huge Flash sign thanks to Flashblock... lame side indeed. Considering a developer site lame just because they use flash is a bit childish, sorry. They are living in REAL WORLD, real people, serving to REAL developers some free SDKs which also includes Flash/Flex applications. It is not like some 133t wannabe thing, it is some part of a company who considers $46 _billion_ a cheap price for its worth.

The "huge flash sign" you speak about is some Yahoo developer explaining why OpenID, a vendor neutral, OPEN technology is a big step for Yahoo. You know, they adopted that technology for their 250 million accounts lately. Hopefully you didn't miss that news with whatever block you use.

Re:It is compatibility problem really

[Anonymous Coward]

Except that Microsoft has a fair deal of experience migrating from FreeBSD to Windows. Hotmail was run on FreeBSD and Solaris servers for a long time after they purchased them.

Re:It is compatibility problem really

[quanticle]

Would MS pay $46 billion to further advertise open source technologies and operating systems like FreeBSD?

No, but it might be worth $46 billion to destroy one of the larger installations of open source software out there, in addition to starving open source projects like Zimbra of corporate support.

Re:It is compatibility problem really

[Conley Index]

The "huge flash sign" you speak about is some Yahoo developer explaining why OpenID, a vendor neutral, OPEN technology is a big step for Yahoo. You know, they adopted that technology for their 250 million accounts lately. Hopefully you didn't miss that news with whatever block you use. Unfortunately (or fortunately?) Flash is rather unstable on my FreeBSD system. I only try to use it, if I think it is really worse it. Some company presenting their "OPEN" technology in such an "OPEN" way does not belong in this category. These people in the "REAL WORLD" sometimes have a weird perspective on things I fortunately can afford to ignore. Is OpenID a success? Not yet and I seriously doubt it will be... but maybe.

My parent talked about FreeBSD and Windows not going along very well and directs me to a site that has Flash and promotes .Net (and Java). I think someone is rather clueless. It is not about Yahoo. It is this site that makes me laugh as a prove that Microsoft and Yahoo do not fit together.

You may call me childish. Fortunately, I can afford not to be one of your "REAL" developers.

Re:It is compatibility problem really

[Anonymous Coward]

And Microsoft released a .Net runtime for FreeBSD when C# was first made public, I assume trying to make it sound like they were cross platform.

Re:It is compatibility problem really

[protohiro1]

You are being obtuse. The YDN does not "promote" java and .net, it just provides articles for developers using .net and java. Articles on how to use yahoo web services. Anyway, are you implying because they mention java, .net and have flash on the YDN homepage that makes yahoo as "unopen" as ms?

Re:It is compatibility problem really

[elteck]

My thoughts exactly. And for that reason, Yahoo's engineers are not really compatible with Microsoft either. The engineers actually have the technology in their heads, if they run away, what's left of Yahoo's value?

Re:It is compatibility problem really

[Conley Index]

Anyway, are you implying because they mention java, .net and have flash on the YDN homepage that makes yahoo as "unopen" as ms? As I said, it is not about Yahoo. It is about the original post claiming that Windows and FreeBSD do not go well along, Microsoft would advertise FreeBSD, and a link to that page to show what Yahoo was all about.

The Link contained a lot of technology that goes along a lot better with Windows than FreeBSD. Moreover it advertises the use of proprietary technology such as Flash and not FreeBSD. Or should I look at what kind of server is behind the page?

I know that Yahoo is used as a reference what a big company uses FreeBSD, but the site in question just shows a company giving developers tools to build application that work with their services and OpenID, which aims to be a competitor to the Passport in a more open way, because Passport failed. For me, presenting the whole thing in Flash, hints that "open" is more a buzzword here than the spirit behind it. That might be wrong, but it does not really matter for my point.

I do not really know how "open" Yahoo is, but this site does not show me anything.

Phblllltttt!

[kabdib]

"Neeners! We want to do our *own* layoffs!"

Microsoft buys companies to squish their tech

[Anonymous Coward]

On live.com, Microsoft's search results suck.

The results are usually irrelevant. Not helpful.

If Microsoft eats Yahoo, we can expect them to throw away anything that was good in Yahoo.

For example, they bought the company that made Lookout and did not integrate the technology into MS Outlook. As a result searches in MS Outlook are excruciatingly slow if you have a large amount of emails. http://www.joelonsoftware.com/items/2007/12/24.html

When Google bought Youtube, they didnt squish it to replace it with google video.

When Apple bought Coverflow, they included it in their products.

When other companies buy companies, they tend to absorb their technology. Nowadays, in Microsoft's case it's only to steal traffic and to eliminate technological competition.

Re:Microsoft buys companies to squish their tech

[mkiwi]

Nowadays, in Microsoft's case it's only to steal traffic and to eliminate technological competition.

Please, it's called assimilation. Don't make the collective angry. :-)

Re:Microsoft buys companies to squish their tech

[that this is not und]

Be careful. Someone might change the channel. You'll no longer be living in a Star Trek universe.

Could happen. Really, it could.

Of course it's not a "real" company...

[BattyMan]

If it were a "real" company, like, say, Netscape (was), the Empire could cut off its air supply. Same with "Linux" (_not_ a "real company", doesn't need to make money or stay "in business" in order to survive and continue to challenge The Monopoly). "Real Companies"(tm)(r)(c) can be eliminated using "real" monopoly business abuse. This is what _really_ has SteveB pissed off and frustrated to the point where he's reduced to swearing and throwing things.

He has viable competitors out here, about which he can't do a fsckin' thing.

Oh, and _zero_ market loyalty, after ten years of abuse. Make that negative numbers...

Re:Of course it's not a "real" company...

[ScrewMaster]

after ten years of abuse

Ten years? Try thirty.

interesting

[blind biker]

So, is Yahoo the first and only company that dared to say "No" to Microsoft? I think it is.

Re:interesting

[Ilgaz]

So, is Yahoo the first and only company that dared to say "No" to Microsoft? I think it is. They were after Opera (software) for a long time, Opera Boss replied "1 dollar more than you can pay" many times. If they had such a slick code in their hand, IE for Mobile would be same as IE For Windows and later they would slowly abandon Symbian, Linux ports or make people hate them. We would end up begging some open source developer to code for our little memory, little screen devices which would never likely happen.

They made the best ever IE on OS 9/OS X and abandoned it. They abandoned Windows Media Player (DRM included, big deal) perfectly working on OS X 10.3.x ages. If you see "Sorry, windows only" on those pay per view etc. sites, that is the main reason.

Imagine a company who abandons their media player on a just taking off platform which there is almost no resistance to DRM only because... It doesn't use its OS. People tell "They wouldn't do such an insane thing to move Yahoo to Windows". I know both companies as user for a long time, they CAN do it. They did it with Hotmail already. Once on a time, people have actually chosen Hotmail over their ISP mail since it was more reliable. They moved _that_ to Windows.

Re:interesting

[blind biker]

I lived through the Hotmail takeover. I know Hotmail since almost its inception.

Microsoft transformed it into a smoldering pile of ad crap - compared to the original Hotmail.

Yahoo board to reject Microsoft bid

[djupedal]

SAN FRANCISCO - Yahoo Inc.'s board has concluded Microsoft Corp.'s $44.6 billion takeover bid undervalues the slumping Internet pioneer and plans to reject the unsolicited offer, a person familiar with the situation said Saturday.

The decision, first reported by The Wall Street Journal on its Web site, could trigger a showdown involving two of the world's most prominent technology companies.

If it wants Yahoo badly enough, Microsoft could try to override Yahoo's board by taking its offer -- originally valued at $31 per share -- directly to the shareholders. If Microsoft pursued that risky route, it will likely have to nominate its slate of directors to supplant Yahoo's current 10-member board.

CNBC video: Microsoft's Yahoo strategy Many analysts believe Microsoft is prepared to offer as much as $35 per share for Yahoo, which still boasts one of the Internet's largest audiences and most powerful advertising vehicles despite a prolonged slump that has hammered its stock.

Yahoo's board reached the decision after exploring a wide variety of alternatives during the past week, according to the person who spoke to The Associated Press. The person didn't want to be identified because the reasons for Yahoo's rebuff won't be officially spelled out until Monday morning.

Microsoft and Yahoo declined to comment Saturday.

It's called negotiation

[dreamchaser]

MS bid $31. Yahoo counters with "Not a penny under $40". MS counters with $35 or just does a hostile takeover.

Re:It's called negotiation

[Anonymous Coward]

Why on earth would they UP the bid? YAHOO! has been busy the last week shaking the tree for other offers. Mayber they found one, but it does not seem that way. The $40 pirce is, just that a price. YAHOO! is now negociating.

However, if they have no other sutiors why would MSFT up the bid. Why not lower it? The board will reject that. Fine, watch the stock go down. It will! Once the share holders realize nodoby else will pay anywhere near as much as MSFT they will put big pressure on the board to accept. By then I'm guessing the price will be $28.

Re:It's called negotiation

[that this is not und]

It would be sweet if Microsoft instead lowered their offer to $28. Let the Yahoo bosses stew awhile.

It isn't likely that the value of Yahoo is on the rise. They don't have a lot to negotigate with. And they only have until the shareholders show up with torches and a rope to make a deal with Microsoft.

The mod up to +4

[westlake]

Most of Yahoo's value spawns from how *completely* different their company attitude comes across from stuck-up, self-important, dying companies such as microsoft.

Allow me to humbly suggest a moratorium on "Microsoft is dying" posts - at least - until the company stops posting record gains and growth each quarter.

Would you sleep with me for $1 million?

[shanen]

"Nice to know you would have sex with me for $1 million. Okay, so would you sleep with me for $2."

"What kind of girl do you think I am?"

"We've already established that. Now we're just haggling about the price."

So Yahoo! would sell out for $40, eh? Why am I not impressed with their integrity.

The *REAL* problem is that "shareholder value" now has a circular definition of stock price, and anything that raises the price is increasing "shareholder value" even if the real assets of the company are being destroyed for the next quarter. Most of the shares of most companies are never bought or sold, but their "value" is determined based on tiny sales of crazed gamblers, AKA technical analysts and fund managers. Meanwhile, the gamblers have a perfect situation. They are gambling with *OTHER* people's money. If they "win", they get huge bonuses, and if they lose, they get slightly less huge bonuses. In the worst case, they have to take the millions and retire.

(And *NO*, I do *NOT* want to hop over and help with the /. meta-moderation that supports the broken moderation system. My observations are that /. is basically dying, mostly for a lack of humor, and the broken moderation system is my pick for the #1 reason.)

Re:Would you sleep with me for $1 million?

[Actually, I do RTFA]

So Yahoo! would sell out for $40, eh? Why am I not impressed with their integrity.

Yes, it's a stock. It's always for sale. The only question is price. MS was buying huge chunks of Apple before the federal government stopped them. The only question in selling a publically traded company is "how much?" Any company would be foolish not to sell out for 100x their stock price, for instance.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Frankly, my dear, I don't give a damn.

[westlake]

There may be some Slashdot readers who don't know the story about the chair

--- and a good many more who wish the joke could be retired along with the other long-since-gone-stale running gags that pass for humor on Slashdot.

Re:Frankly, my dear, I don't give a damn.

[Daniel Phillips]

"There may be some Slashdot readers who don't know the story about the chair"

--- and a good many more who wish the joke could be retired along with the other long-since-gone-stale running gags that pass for humor on Slashdot. Trouble with your theory is, it is not a joke, it actually happened.

Re:Frankly, my dear, I don't give a damn.

[Anonymous Coward]

--- and a good many more who wish the joke could be retired along with the other long-since-gone-stale running gags that pass for humor on Slashdot.

What is a community if it doesn't have shared experiences and a common past? They may be lame gags but they are "our" lame gags.

Record gains?

[mangu]

Allow me to humbly suggest a moratorium on "Microsoft is dying" posts - at least - until the company stops posting record gains and growth each quarter.

That could happen much sooner than you expect. Google for "microsoft cash" and look for a diminishing trend over the last five years. If you had a stockpile of over $50 billion to start with, it's not so hard to post record gains, for a while. Until you need to start borrowing.

At this point, corporations are no different from either individual persons or countries.

Re:Record gains?

[Achromatic1978]

"Need"? They have $60B+ in assets, $23B of that is cash. Quote: "We may choose to issue some debt, rather than using the entirety of our cash pile".

Doesn't sound like they're killing themselves to do so, subprime mortgage style.

Re:Record gains?

[mangu]

They have $60B+ in assets, $23B of that is cash. Quote: "We may choose to issue some debt, rather than using the entirety of our cash pile"

Yes, but five years ago that was over $50B in cash. And when they say "We may choose to issue some debt", it means issuing debt on the 50% of the deal they propose to do in cash. The other half would be in a stock swap.

They no longer have the means to buy Yahoo out of their cash reserves alone, like they did not so many years ago. Buying Yahoo now would mean depleting *all* of their current cash reserves, that's why they are considering taking a loan.

Re:Record gains?

[Anonymous Coward]

The money was returned to shareholders via dividends (including a large one time dividend) and share buybacks.

Re:Record gains?

[westlake]

That could happen much sooner than you expect. it's not so hard to post record gains, for a while. Until you need to start borrowing.

The offer to Yahoo! represents 2 years and some months profit for Microsoft. Microsoft has been paying dividends and buying back stock, which is why its cash reserves are down.

On Yahoo

[Anonymous Coward]

As Kirk would say, "Let them die!"

Next: Hostile takeover!

[Doug52392]

You can bet Microsoft will be pretty pissed at Yahoo for not allowing them to turn Yahoo into a horribly designed, ad ridden, pro-Microsoft, Windows only, Silverlight only "website". I bet m$ will buy out Yahoo hostilely...

MS needs internal change, NOT external change

[Temujin_12]

IMHO the reason MS's internet search market share is source) is because much of its business practices, management, engineering, methodology has been mostly client-centered and doggedly hangs on to antiquated/hostile business practices (IP, DRM, anti-open source). Buying a competing internet company like Yahoo! isn't likely to have the effect they are looking for. I don't think MS inability to succeed in the internet sphere has anything to do with lack of resources. The methods, technologies, practices, solutions. etc. required to approach the market the way Yahoo!, Google, and other successful internet-based companies do just aren't compatible with the way MS runs things.

MS needs to change from the inside out. Buying the competition results in external change, which doesn't have the impact necessary to turn things around for MS in the internet market. If MS does buy/take-over Yahoo! I see a few likely scenarios (not an exhaustive list):

1. MS applies its existing client-centered/antiquated practices and the new Yahoo! falls apart
2. Given the disdain many Yahoo! employees have for MS, MS would have to replace a lot of skills which would likely result in 'infecting' Yahoo! with its practices (see #1)
3. MS doesn't touch Yahoo! (assuming they can avoid scenario #2) and merely plays a supportive role (which I don't think they'll be able to contain themselves to)

The only scenario above that MS has a prayer coming out ahead on this is #3. The problem with this is MS will have to take a hands-off approach to the acquisition (which it won't). Until MS accepts the fact the it is no longer the 80's/90's and the computational pendulum has swung back to the thin-client model (see PDAs, cellphones, mini-PCs, internet, etc.), they'll continue to engineer out-dated technologies and always be several steps behind companies that embrace market change. Again, this can only come from the inside out (looking at you Mr. Ballmer).

Re:MS needs internal change, NOT external change

[stavros-59]

From the outside it often looks to me as if Microsoft live in an ivory tower. Their position in their world is currently unassailable. That may change, but not any time soon. They can employ the best and most expensive "yes-men" that money can buy.

How could they develop the internal culture shift that would enable change when they seem to be so isolated in many ways?

+5, really?

[tacokill]

Dude, you got it figured out.

Since, literally, billions of dollars are at stake here, you are in possession of information that could set you up for life if you were to trade on it. Why aren't you on Wall Street with those smarts? Seriously. Since you have it figured out, you should profit from this. Your could generate enough riches to retire in 2-3 months.

I'd be intrigued. I'd probably even subscribe to your newsletter.

Re:+5, really?

[Hangtime]

Go pick up a book on M&A, might I suggest Barbarians at the Gate, Den of Thieves, or Payback to get your feet wet. Dated material at this point but still worthy of reading. Then go read up on some of the whales in the marketplace and how they get things done with boards like Yahoo. Probably your closest and most recent view is to look at Carl Ichann and some of his deals BEAS would be a good start there.

Yahoo board is not staggered meaning everyone on the board is voted in each year. This will make it difficult for Yahoo to put up an exceptional defense because MSFT can nominate an entire slate of board members which they will do before the deadline if Yahoo hasn't accepted the offer. Also, the turnover in YHOO shares has been rather large in the last 3 months these folks are looking to lock-in gains quickly and move-on. Before you say they can sell at any time, large positions take time to exit. In addition Legg Mason and a couple of the large institutional shareholders had a real cruddy year's last year and want to be sure that this year looks a lot better. Don't think that Legg Mason wants to see MSFT's offer come off the table. The only takeover defense that I am aware of is Yahoo has a poison pill that it can invoke if a hostile bidder (MSFT) acquires more then 5%. Microsoft is unlikely to actually purchase stock in YHOO to the point of hitting that mark. All MSFT wants to do is force the issue and is playing the game beautiful.

So yes, it is that simple. Little to no defense through shareholder rights, a weakened stock, a CEO that can't seem to put a cohesive plan together for Wall Street, and a motivated bidder who just swung a huge deal that no one is going to be able to touch. So yes, hit the "Easy" button because it is just that easy.

Re:+5, really?

[tacokill]

Sir, I used to work in M&A. I am very well aware of the tools available to "get things done". (not bragging but I also have my MBA in finance, which started me off in the industry). Spent my first 10 years of my career doing M&A work and I have read, in detail, all of the books you mention. Carl Icahn is one of my personal heroes.

This isn't easy and there are LOTS of ways this can go down. You have laid out one way (which btw, is very well thought out, thanks) but M&A activities are, by default, unpredictable. Because of this, there is an entire artbitrage industry that does nothing but try to profit off of M&A deals.

My point here is simple: if you have it figured out, then you should profit from it. IF it goes down the way you say, then you can easily make enough money to last you the rest of your lifetime from this one deal. Now, stepping back and taking my asshat off, let me say you appear to be very well versed in some of the finer points of corporate structure and equities....so I am thinking you already know this and you realize it's a lot harder than it looks. Deals get quashed. Players change. Corp politics changes. The debt markets become (un)cooperative, Etc, etc, etc.

If it was so easy to profit because you "know how it's going to play out", then everyone would be making billions of dollars trading the pattern. They aren't. Because there is no pattern. If you think there is, then I challenge you to put your money where your mouth is and let us know what your positions are.

Nohoo!

[Patentmat]

That is all

Translation

[Lawrence_Bird]

We (Boohoo) will settle for $36. They will get their money but probably with a few more caveats on control.

Simple estimate

[rinkjustice]

Facebook has been evaluated at $15 billion, and it doesn't have a fraction of the heft in assets or brand equity as Yahoo.

Heck, I would turn it down too.

If Yhoo were undervalued at 29...

[1a1n]

they would have been way undervalued at 19. if that was the case, why weren't the board members rushing in & picking up this drastically undervalued stock? http://finance.yahoo.com/q/it?s=YHOO 1

Yes -- it's dying.

[mangu]

Unless I was far bigger than Microsoft is now, I would certainly be worried if my cash assets were shrinking at a rate of $10 billion / year.

Their bid for Yahoo seems like a desperate act. It's the first time in their history that they do not have the reserves to buy a company with cash alone, and they have to offer a stock deal. Worse, they not only have to offer a stock deal, but it seems like they are considering an option to finance the part that's in cash.

Oh, yes, sure, profits are at a record high. Give me $10B/year and let's see how I do. But that stockpile will end someday, and it seems like that day will be in 2008.

Non search properties

[Tuor]

I find most discussion only focuses on search. Certainly this is part of Microsoft's strategy. What is more important for Yahoo! is it's other services. Yahoo! groups, mail, TV, calendars, widgets, and lots of other properties.

Is it possible Microsoft is after these? Like Palm wasn't after BeOS?

What would the acquisition of these other properties do for Microsoft? For Google? Google could sell the search and advertising off and get a lot of mileage off of the other parts

I think it's all this other IP that puts Yahoo! in a much better position then the narrow "Search Merger" view provides.

TEN years of abuse?

[toby]

Somebody can't count.

MS was a customer hostile enterprise (eventually proved criminal, time and time again) from the day Gates crawled out of bed and set it up in 1975, with mission: Enrich ME, fuck everyone else. (Remember the anti-hobbyist memo (first of many famous incriminating memos)? The leopard doesn't change its spots.)

I make that 32 years. The cost to civilisation is incalculable, and we'll be paying for decades to come. Millions of lives are made worse by Windows and every other worthless MS product, every day.

Ballmer was hired and retained to continue the disgusting legacy.

Re:TEN years of abuse?

[titla1k]

Millions of lives are made worse by Windows and every other worthless MS product, every day.

I hardly think so. I don't wake up in the morning and think "Geez, another shitty day in this MS world, if only they weren't around life would be so much better".
Sure some of their stuff is bad, and there's better alternatives out there, but to say millions of lives are made worse is just crap.

Re:TEN years of abuse?

[Joey Vegetables]

We can't really know how much our lives might be different because of the innovation that never happened because of Microsoft. But imagine just as an example if there were no Google, no Yahoo, nothing like either of these . . . just a bloated, Windows-only MSN. Imagine no Java and no Open Source. These are all areas of innovation that have positively affected all of our lives, and which Microsoft tried with varying degrees of mostly non-success to kill. There were many technologies which Microsoft did manage to kill, and many more that never saw the light of day due to the noncompetitive "marketplace" resulting from its illegal behavior. I don't think it's a stretch to say that without Microsoft our everyday lives would be very different.

Resistance is futile

[Firas Zirie]

Yahoo is resisting, but they are just delaying the inevitable if you ask me. Microsoft has this crazy fixation on beating Google that isn't going to end anytime soon. It would serve them better if they just focus on their core business more; $46,000,000,000 would pay for a lot of R&D.

No, it's not

[Macthorpe]

Their cash reserves shrank because the stockholders were revolting because they had so much cash in reserve, so they paid out a dividend of $32 billion dollars in one go.

Reference: Information Age

The source that Slashdot quoted for that fine calculation of "$10bn lost per year" was the Motley Fool, who pointed out:

6/30/04
$60.6 billion

6/30/05
$37.8 billion

6/30/06
$31.1 billion

6/30/07
$21.1 billion

Now, considering the dividend payment of $32bn, that leaves $6bn unaccounted for... until you realise that Microsoft has bought 48 companies in the last 3 years. It's not hard to imagine that would account for that $6bn and more.

Hooray, lets hope so

[Eravnrekaree]

Under no circumstances should Yahoo merge with Microsoft, for any amount of money. Increased consolidation would be very bad for consumers, and especially for users of non microsoft OSs. Given microsofts track record, they tend to use products to support their OS monopoly for instance by making pages only viewable on IE. So I am very glad to hear this development.

Re:Hooray, lets hope so

[Shados]

It would be even worse for users of Microsoft's products than for non-MS-users, too. Microsoft isn't in the powerhouse position that it used to be...this is simply too much money to play around for the current MS, and, with MS's expertise in the internet business (lol....lack of...), all the billions they'll throw on Yahoo will go straight in the toilet, something MS cannot afford... they'll then have to reroute ressources to save the sinking ship, and if they end up the way of Novell, it will be a miracle compared to the worse case scenario...

Microsoft buying Yahoo basically means Microsoft goes goodbye.

Re:Hooray, lets hope so

[Eravnrekaree]

Well, actually Microsoft going bye bye would be a good thing. It would give Linux the chance to take the lead in the OS domain. As far as yahoo, I dont really know why they are in such trouble. I have used their service, such as their music service and they seemed to be pretty decent. Ive always used yahoo even for search.I became very concerned when microsoft was making this offer, since I do not trust microsoft at all especially with my mail, so I might have had to consider moving away from using it. I actually like yahoo mail and their other services, and knowing MS the quality would probably degrade for all except the windows users on IE as MS.

How much was Eric Schmidt responsible?

[Futurepower(R)]

"Both companies [Sun and Novell] pretty much lost out whenever they took on Microsoft".

I thought you were going to say, "... when they took on Eric Schmidt". Novell was at the top of the network software market. Through a lot of foolish moves, like buying Word Perfect for $1.1 billion, if I remember correctly, in 1994, Novell became "Who is Novell?"

I don't have any idea how much Eric Schmidt was responsible for the downfall of Novell. He became CEO of Novell in 1997. By 1999, "Novell had lost its dominant market position".

Re:How much was Eric Schmidt responsible?

[Anonymous Coward]

Perhaps I'm off base but it seemed that Novell's primary problem was that their product were great from an engineering standpoint*, but weren't very intuitive; combined with the apparently slow transition from IPX to TCP/IP is what did Netware in.

*Quality German engineering, the engine will run for 1000000k miles but to change the oil you have to remove half the suspension.

"The cost of [MS abuse] is incalculable..."

[Futurepower(R)]

"The cost to civilisation is incalculable, ..."

I notice that people don't deal with abuse very well. They minimize and ignore and excuse abuse.

I'm getting a kick out of these "overrated" mods

[Tanman]

I wonder what percent of the people rating my post "overrated" lost their shirts in the dot-com bubble bust. Well, of those that were old enough to own stocks then, anyway.

here's a quick lesson in economics:

http://finance.google.com/

look up microsoft
look up oracle
look up pfizer
look up walmart
look up yahoo

Ok, now, look at each of their P/E (Price to Earnings) ratios. This is the value of how much money they earn vs. how much the total cost of their stock is. Old-school corps, like utilities and such, generally have a p/e of like 8-13. Some newer companies can have up to like 18 or so and it is 'ok.'

Now, look at yahoo, and explain to me exactly how my post is overrated? What miracle strategy do you think they will have to TRIPLE their earnings so that their stock isn't artificially inflated, much less worth *33% MORE* than MSFT offered? At $40 a share, you'd be talking about a P/E of like 90.

Re:I'm getting a kick out of these "overrated" mod

[magus_melchior]

Economists (pro and amateur) disagree all the time over just about everything, or at least, so said an economics professor. You're only getting hit with overrated mods because some people don't agree with you. At least the mods weren't foolishly tagging you with "troll", "offtopic", or "flamebait". If that upsets or frustrates you, might I suggest taking a break from this thread for a bit?

Here's why you're overrated

[snowwrestler]

You're taking a very simplistic approach to a very complex subject: the valuation of a company. There is more to life than current P/E, particularly for technology companies. It doesn't help that you're being incredibly condescending about the whole thing.

More raw talent

[vespacide2]

and respect from the public. It seems like they are actually trying to do good. Maybe the reason is that it's good for their image and profits, but it's a world of difference compared to the traditional corporations like to Microsoft, AT&T, Verizon, Halliburton, etc.

ethically dubious?

[vespacide2]

In a properly functioning market (that is, without ethically dubious anti-takeover provisions in the corporate charter) nobody would really care what the board members thought about the offer.

It's strange that you use "ethics" to back your position.
Wouldn't "greed" be more in your corner?

Re:ethically dubious?

[that this is not und]

So you're saying the Yahoo board has placed greedily dubious anti-takeover provisions in the corporate charter? I don't think you even put a dent in what he was trying to say.

I don't think they will do what you think.

[j0hn33y]

You think Microsoft will raise the bid? Watch Microsoft cut the bid and half or withdraw the offer entirely. Then watch Yahoo shares drop.

No

[vespacide2]

I mean that the tone of the post was one of business, capitalism and greed. (where ethics have no place) That's why it seems weird (to me) that the word "ethical" was used to attack the one part of the situation that wasn't simply a money issue.
I felt the poster was/is taking a greedy position.
(though i admit it didn't really come out right)
It was more of knee-jerk reaction than a well though out post.
My apologies.

So mean

[jasampler]

Microsoft offered $31 per share, ..., for Yahoo; but the latter believes that no offer below $40 per share is tenable. OMG just for $9...

Real offer was $15 per share

[Anonymous Coward]

The real offer was $15 cash per share, the rest is MS stock. We all know the value of print-on-demand funny money.

(obligatory)

[Brother Seamus]

Four? For this gourd? Four?! Look at it. It's worth ten if it's worth a shekel.

too bad

[nguy]

A Microsoft takeover of Yahoo! would probably have given Yahoo! stock holders a last ditch shot in the arm, while at the same time hurting Microsoft pretty badly.

oh you're a microsoft shareholder are you

[Anonymous Coward]

I think I'll just give your daughter some crack, because afterwards she'll buy it from me and i have a monopoly in her area. Yeah I had to murder some thugs to get there, but so what.

After all it's in my financial interests.

You disgust me you piece of shit. If you and everyone like you died tomorrow the world would be a better place.

Disclaimer: I don't own or Microsoft or competitor's stock or work for them or a competitor. Also, I'm not a piece of shit, and I never would own Microsoft stock, or stock in a tobacco company, even if it meant 20% returns year over year over year over year. And anyone that would - die, please. Just die. End your pathetic miserable existence, trust me no one will regret it.

Re:oh you're a microsoft shareholder are you

[F34nor]

Go ahead and shoot me dumb shit, evil has a deep bench.

Microsoft != Midas

[erroneus]

One thing I find interesting is that Microsoft fans continue to believe that somehow everything Microsoft touches turns to gold.

That may have been true about 10 years ago and before. (Has it been 10 years? When did Win98 and Win2000 come out?) In any case, I'll happily admit that I was a huge Microsoft fan for a while there. When "DOS" was a more level playing ground having alternatives that worked, Microsoft stepped up things by creating a GUI that did more than just make things prettier -- it unified drivers for things like printers, displays, sound cards, mice and more. That was huge because even though most people probably don't realize this, but for the most part these device drivers were for the applications to access and control. It was a mess! Either the applications needed to write support for a collection of hardware, or hardware vendors needed to supply supporting software for a wide range of programs... often both.

Then along came Windows. It made a huge difference. I saw it, appreciated it and embraced it.

But somewhere, somehow, Microsoft just became too big and too heavy. It lost any sense of quality and certainly cared nothing about security as they took NO responsibility for the environment they were creating. (That environment I speak of is the one where every grandmother's machine on the planet has become infected with malware of one sort or another and bots run rampant across the net.) Microsoft has bought an uncountable number of profitable and successful companies and ruined them in some fashion or another. And if I understand things now, Office and Windows are the only things turning a profit for Microsoft in all this time.

Imagine what that looks like. Big company buys many successful businesses and they all turn to profit-less crap shortly thereafter. What is the meaning of this?! (I have been suspecting lately that the more applications software that is made to run under alternative operating systems, the less relevant Microsoft becomes... have these companies been threatening to port their successful code over to Linux or MacOS? Is that MS's motivation for buying so many of these companies?) But while the perception of Microsoft has been that everything MS touches turns to gold, the reality is that it all turns to crap.

Could Yahoo's rejection be linked to their fear of being absorbed by the great poop generator that is Microsoft?

And with Microsoft's own attempt at the "internet game" failing so miserably, what makes anyone think that MS could make it work better under the Yahoo banner? Perhaps Yahoo believes otherwise.

Eric Schmidt apparently did not improve Novell.

[Futurepower(R)]

Novell Netware wasn't, quote, "very intuitive".

It was much worse than that. Netware was so quirky that Novell was charging thousands of dollars to get certified to work with it. The real customers were computer consultants, not technically knowledgeable end users, and Novell apparently wanted the income and often raised the cost of certification.

Once it was installed, Novell Netware worked well and reliably. (Unlike Microsoft Windows, for example, which seems to be deliberately sloppily coded so that customers will want to "upgrade".)

Eric Schmidt became CEO of Novell in 1997. The Wikipedia article says, "by 1999 Novell had lost its dominant market position".

Another quote: "Microsoft's GUI was also more popular and more modern-seeming than the character-based Novell interfaces." Unbelievably, Novell didn't update its interface after the world began using GUIs.

I have seen no evidence whatsoever that Eric Schmidt is a particularly good executive. Certainly while he was CEO of Novell I saw no evidence of any improvement in Novell's backward business practices. However, there are many people far more knowledgeable about Novell at that time than I.

Interesting quote: "Schmidt is one of the few people who have become billionaires (USD) based on stock options received as an employee in a corporation of which neither he nor a relative was the founder."

May I say ?

[OricAtmos48K]

Yahoo !

How to negotiate, tips for Yahoo

[ZlotyJelop]

It looks like Yahoo is really following those tips... http://www.5min.com/Video/How-to-negotiate---Tips-for-Yahoo-5794173/ Good.

Re:How to negotiate, tips for Yahoo

[ZlotyJelop]

Here is working one http://www.5min.com/Video/How-to-negotiate---Tips-for-Yahoo-5794173
Stupid beta..

Re:How to negotiate, tips for Yahoo

[imelgrat]

Actually, Yahoo! has based its decisions on more than 5-min tips... Goldman, Sachs & Co. and Lehman Brothers y Moelis are Yahoo's financial advisors in this matter. Yahoo! is also legally advised by the Skadden, Arps, Slate, Meagher and Flom group, as well as Munger, Tolles and Olson (as external advisors). This means they've really thought about it (at least, Yahoo's advisors did) before rejecting the offer...

IMHO, they did right. Merging with M$ would have trashed Y!'s tools, making them unusable.

Yahoo: Friendster 2.0

[buddyglass]

There may be a lot of investors kicking themselves 5 years from now.

sounds like a negotiation to me:

[corifornia2]

Microsoft: We're fucked. Yahoo, we'll give you a shit load of money so we aren't the only ones that are super fucked.
Yahoo!: That'd be nice and all, but that can only buy me one island in the bahamas . . . I mean, we really value our values here at Yahoo! and believe in our products, so we'll have to say no.
Microsoft: We'll buy you a state.
Yahoo!: Do we have to install Vista on our desktops?
Microsoft: No.
Yahoo!: Deal.