Falling Microsoft Income Endangers Yahoo Bid

Dionysius, God of Wine and Leaf, points out a new wrinkle to Microsoft's pursuit of Yahoo. The most recent quarterly results, which saw Microsoft's earnings drop by 6% from the previous year (revenue from Windows alone was down 24%), have caused the stock to dip. This has reduced the value of the cash-and-stock offer from its original $44B to something nearer $40B. Yahoo, of course, has maintained all along that the original offer was lowball. A business professor is quoted: "Whatever leverage [Microsoft] built up in the last few days could be slipping away."

Comments

Clearly caused by H-1b limits

[Baldrson]

It's clear that if Bill Gates could just get the H-1b caps lifted, the best and brightest from around the world could come to the US and be paid $100k straight out of college to save Microsoft.

Anyone who was around during the dot-com era remembers how it was H-1b limits that caused the crash of that wonderful era. Those who do not learn from history are doomed to repeat it.

Re:Clearly caused by H-1b limits

[pubjames]

Yes, but $100k is now worth relatively little in proper money.

I was going to make a joke about this but actually its not funny.

wrong wrong wrong*

[thermian]

It was the absurd level of investment which saw things like startups being valued higher than HP, Xerox, and if I remember rightly, the Ford Motor company, that caused that.

Venture capitalists poured billions into the industry without considering that the market had yet to produce the great new age of commerce that was promised.

Startups without a coherent product were valued as multiple million dollar companies, and attracted investment like dead dogs attract flies.

And all this at a time when I believe broadband wasn't even widely deployed.

It was a bust waiting to happen. It's just a shame that so many viable companies were taken down in the crash.

Re:wrong wrong wrong*

[lightversusdark]

Whoosh!

And don't try the old asterisk in the subject line trick - we can see you're not a subscriber!

The Offer is NOT LOWBALL

[SerpentMage]

If you think that Yahoo which is trading over 40 to 50 PE as lowball well then YAHOO is crazy.

Look at the earnings growth of Yahoo for the past five years. IT IS pitiful. Yahoo is being too arrogant for its own good.

Personally, I think Microsoft should just walk away. Watch that Yahoo stock drop faster than gravity.

Re:Downward spiral?

[Jesrad]

It is the falling revenue that hubris is set in motion. It is by the gook of management that self-destruction acquires speed, the product line acquires bloatware, the bloatware becomes a warning. IT is by falling revenue alone that hubris is set in motion.