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Microsoft Withdraws Yahoo Takeover Offer

Posted by timothy on from the brinksmanship-in-the-pac-no-west dept.

mksmac writes "According to the KOMO TV Website, Microsoft has withdrawn its bid for Yahoo after presenting them with an increased offer that was subsequently declined by Yahoo. Frankly, this seems like a smarter decision on Microsoft's part, but I'd like to hear how other people feel about the deal. Should Microsoft have walked away, pressured Yahoo via a hostile takeover or sweetened the pot until Yahoo gave in?" For those who prefer it, the NYT also has coverage, and the story is also at news.com, among many others. I like the Beeb's version as well. And for the Microsoft-centric explanation of why the courtship is over, see Steve Balmer's letter to Jerry Yang.

3 of 336 comments (clear)

  1. Re:My question is... by j0nb0y · · Score: 5, Informative

    Where did you get that idea?

    The general consensus on the street seemed to be that Microsoft was offering *too much* money... which is why Microsoft stock dropped when the offer was first announced...

    I'm not a big fan of Microsoft, but it really looked to me like they wanted Yahoo. It was Yahoo's executives who didn't want the deal to go through.

    Maybe I just watch too much CNBC.

    --
    If you had super powers, would you use them for good, or for awesome?
  2. ...and Ballmer wrote as such. by game+kid · · Score: 5, Informative

    ...

    We regard with particular concern your apparent planning to respond to a "hostile" bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

    • First, it would fundamentally undermine Yahoo!'s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

    ...

    No need to speculate on what Ballmer has all but confirmed. :)
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  3. Re:My question is... by CodeBuster · · Score: 4, Informative

    I fail to see why MS would want to compete with Google so much Google is earning economic rent through their strong franchise business in search and online advertising. There is no way that they are not going to attract competitors. Microsoft is in the technology business too, so it is difficult to explain to your shareholders why you are not trying to capture a piece of that lucrative market for yourself, especially when you seem well placed to compete for a share of the spoils. Microsoft is trying to earn the best possible return for their shareholders and that means competing for a share of the market in which Google is earning strong profits going forward.