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Yahoo! Rejects Microsoft's Offer, Says 'Still An Option'
mikkl666 writes "In response to an open letter from Steve Ballmer, Yahoo! posted a press release claiming that Microsoft's offer 'substantially undervalues Yahoo!' and is therefore not in the best interest of the company. They also bemoan that the letter 'mischaracterizes the nature of our discussions' and that the threat to make an offer directly to the shareholders is 'counterproductive and inconsistent with the stated objective of a friendly transaction'. Nevertheless, they explicitly point out that a transaction with Microsoft is still an option, but only if they are willing to pay 'a price that fully recognizes the value of Yahoo!'"
oh and he must be pretty dense to think "friendly negotiations" are still an option if MS goes to the shareholders directly.
If you mod me down, I will become more powerful than you can imagine....
I thought Yahoo wanted more money, not less.
This is like watching ugly people kiss.
The most likely result of such a purchase would be that they'd try to turn Yahoo! into another Microsoft division and destroy what they were after in the first place.
Seems a strange purchase to be chasing after so hard...
Why on Earth would MSFT offer so much when they could/should develop the search technology, content, and customer base themselves? I don't think they can.
Why would Yahoo refuse to accept an offer that is clearly more than they'd get from anyone else? Maybe management has its head in the sand as to its marketplace position.
Going hostile on the acquisition is really, really stupid since one of the best parts of an IT company is the IT talent.
Going hostile will antagonize the whole company, including the best IT talent, IMO.
If you can read this... 01110101 01110010 00100000 01100001 00100000 01100111 01100101 01100101 01101011
When Microsoft burns through all of their cash buying Yahoo, they might be in a whole bunch of trouble. No more ability to absorb losses in business areas when trying to break into a market.
So for this reason. I hope Yahoo accepts the deal.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
If I was a shareholder, I would be very mad. If Microsoft is going to do a hostile take over by buying their shares on the open market, they'll probably get Yahoo for less than their current offer. Same thing happened with Cablevision a few months ago. When the Dolan family offered a buy-out for $36, some 'major' shareholders rejected the offer, pompously saying that Cablevision is worth more. Well guess what, the market didn't think so. The second the buyout was rejected, the stock plummeted below $30 and is now at $23!
Just think of how many FreeBSD/Linux servers would disappear from Netcraft if Yahoo went over to the Dark Side?
Embrace/Extend/Extinguish
"To those who are overly cautious, everything is impossible. "
Yahoo's stock is way overpriced. They're a large, mature company, not a growth company. Revenue is down. So they should have a P/E ration in the 10-20 range, like IBM, Microsoft, Oracle, and SAP.
But YHOO has a P/E ratio of 59 today. Which is far, far too high. Their market cap is around $37 billion. Divide that by 4 and you're close to what the company is really worth. Maybe $10 billion.
This is why Microsoft's institutional shareholders are unhappy with the proposed deal. Microsoft is overpaying, and that makes Microsoft less valuable.
Of course, if Microsoft just drops the deal, the bottom falls out of Yahoo stock, and it probably goes down to something closer to what it is really worth.
Google is overpriced too, but not as badly. Their P/E is around $36, while their revenue is flat or declining slightly. The fundamental problem with Google is that all those free services they give away don't make them any money. They've never found a second big moneymaking product.
It sounds to me like Yahoo is trying to force Microsoft to start a "Hostile Takeover" bid. Yahoo probably does not want to be part of the Microsoft hegemony and has probably got it's lawyers on the case. I bet within a few hours of Microsoft announcing it's started hostile takeover bid Yahoo will have lawyers in the American and EU courts blocking the Bid due to Competition/Monopoly rules. And we all know how he court's just love Microsoft's antics.... :D
MS will get loads of bad press (share prices drop)
Yahoo get good press (there shares prices level out above the original value when this started).
then Google comes along and snap up the two of them....... :D:D
Laters Sol "Have you found the secrets of the universe? Asked Zebade "I'm sure I left them here somewhere"
I still can't even figure out why Microsoft would want them other than to just make them go away.
Bingo!
The only motive here is the elimination of a competitor. Price is no matter; Microsoft wants Yahoo! destroyed because it's one of the two barriers in the way of Microsoft owning the search business.
It's similar to back when Microsoft decided that Netscape had to die. It rapidly became clear that the leaks were true: Bill and Steve had decided that they would lose whatever money they had to lose to own the browser market. They succeeded, and although they've made no money from IE at all (i.e., they've sunk the entire cost of developing it), they are now firmly in control of what the majority of eyes see on the Web. Sinking a few hundred million into IE was a small price to pay for that power.
Their goal now is to control what all those eyes see when they search the Web. Their problem is that most people think either "google" or "yahoo" is what you type to do a search. Not even MS fanboys like MS's search. They understand that they can't compete in the search arena on quality. So they're going to use their huge pile of money to destroy their remaining competitors. Yahoo is the easiest target, so they're going after it first. And they'll lose whatever they have to lose to kill it.
Then it'll be google's turn in the crosshairs.
Those who do study history are doomed to stand helplessly by while everyone else repeats it.
Comment removed based on user account deletion
They'll leave them alone until it makes sense to move over to windows/IIS. Hotmail stayed on BSD for years, but it's been IIS for quite a while now. they're not stupid, they'll treat it as business and move them over when it makes sense to do so. But the Golden rule in most markets is you sure as hell better eat your own dogfood if you expect your customers to, and eventually they'll have to move Yahoo! over if they do buy them. While it is true that Hotmail remained on BSD and Solaris for a long time, that's not because of some kind of smart business decision made by Microsoft. It's because Windows and IIS, even backed up by Microsoft's vast financial resources (permitting, for example, a much larger server farm with a much larger operating team and additional security measures), simply wasn't up to the task of hosting Hotmail.
Hotmail was launched on the 4th of July of 1996 and was bought by Microsoft in December of 1997. Microsoft believes strongly in the concept of "eating one's own dog food" (please note: this is a common term for using one's own products internally), and so immediately started making announcements that Hotmail would be migrated to Windows NT. The NT migration utterly failed, and there were even problems with the Windows 2000 migration. In June of 2001, Microsoft announced it had migrated the BSD portion of Hotmail to Windows 2000, but was forced to retract that statement a few days later. The final migration of all of Hotmail to Windows wasn't completed until 2003.
Not only because of Microsoft's belief in the "eat your own dog food" principle, but also because Microsoft had made public statements saying it was going to migrate hotmail to Microsoft operating system and web server software, it is clear that Microsoft really wanted that migration to work, but it still took over five years and three versions of Microsoft's server software.
"It is nice to know that the computer understands the problem. But I would like to understand it too." --Eugene Wigner