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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.
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.
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.
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