Slashdot Mirror
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.
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.
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.
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.
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
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.
(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.
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.
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.
EvilCON - Made Famous by
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.
after ten years of abuse
Ten years? Try thirty.
The higher the technology, the sharper that two-edged sword.
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.
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
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.
Nerd rage is the funniest rage.