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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.
Yahoo has more pages and traffic than just about any site on the internet. Yahoo and Google are Microsoft's only real competitors on the internet. So my guess is they simply want to absorb one of their competitors to leverage against the other. Microsoft's not gaining market or mind share on their own, so like usual they're trying to buy it.
Developers: We can use your help.
Yahoo is ahead of Microsoft in a few areas... Yahoo's search is worse that Google (IMO), but Microsoft search is worse. Yahoo has Flickr and the social network 43Things, neither of which have a Microsoft equivalent. There's Yahoo Mail and Yahoo Groups, both of which are superior to what Microsoft has. But I agree... Microsoft has a tendency to be heavy-handed with new acquisitions, not to mention the ones it drowns in the bathtub on purpose.
Yahoo's web-services run on Apache servers, and are often developed with open source software in mind.
I can't imagine that would continue if Microsoft bought them out. And most of the in-house developers would have to learn asp real quick, or be out of jobs.
http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
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.
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.
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Hey look, I have no problem with women on Slashdot, but if you're going to hang out here you're going to have to learn to deal with the things that make you different from men.
I hate printers.
While the parent post doesn't quite reach the level of astroturfing, it does feel like an attempt to find a silver lining in what really was an unmitigated fiasco for Microsoft. The company announced quite loudly that it would be migrating to NT, then failed repeatedly. It then more quietly began migrating to Windows 2000, then announced success, then had to retract that. It then issued a white paper on the migration, arguing that Windows 2000 was a better platform than UNIX, even though there were still Solaris and even BSD servers being used until 2003, well after the white paper was issued, and in many cases, BSD code was used to replace the parts of the Windows server OS that just weren't up to hosting a major application like Hotmail.
Please note that I am not saying there is anything wrong with Microsoft using BSD code - the BSD license clearly permits that. The point is that for whatever reason, despite immense financial resources and huge financial and PR incentives, Micrsoft appears to have been completely incapable of making an industrial-strength OS as late as 2002 that could match the power and security BSD and Solaris had in 1997, and when it did have success, it was by simply appropriating the superior code from the BSD base.
Additionally, and actually this is my main point in writing this post, whether or not Microsoft had bought and tried to migrate Hotmail, the evolutionary pressure to improve its OS's security and scalability would have been just as strong. So I really don't see the silver lining in this story the way the parent post does. If there is a silver lining for Microsoft, it's that they learned that BSD code is often just plain better than Microsoft code, and simply taking the BSD code is more effective and a lot cheaper than trying to catch up. One wonders why they don't take something like OpenBSD and make a Microsoft front end for it. Windows would then basically be a window manager, a lot cheaper and simpler to maintain, and the heavy lifting would be done by a system that has time and time again been shown to be better than any Windows ever built, especially in terms of security, which is really the biggest issue with Windows these days, what with there being multiple botnets of hundreds of thousands of Windows machines out there eating massive amounts of internet, LAN and machine resources.
"It is nice to know that the computer understands the problem. But I would like to understand it too." --Eugene Wigner