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Microsoft Withdraws Yahoo Takeover Offer
mksmac writes "According to the KOMO TV Website, Microsoft has withdrawn its bid for Yahoo after presenting them with an increased offer that was subsequently declined by Yahoo.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.
On one hand, I'm of course happy I can stay with Flickr. On the other, it would have been a great deal of fun seeing Microsoft get bogged down and distracted for a good few years as it struggled to digest Yahoo (and, likely, killing any value of that company in the process).
Trust the Computer. The Computer is your friend.
After Google and Yahoo announced their advertising "experiment", i'm sure that was what killed it for Microsoft, i'm sure a few chairs were sent across meeting rooms in Redmond too.
This was never about Microsoft really wanting to buy Yahoo!. Based on everything we've seen, I think it's safe to assume that this was all about disturbing Yahoo!'s shit, at a time when, for Yahoo!'s sake, such shit disturbery needed to be avoided at all cost.
Now Yahoo!'s shareholders are up in arms. The faith in the executives has been damaged. Microsoft is still as strong as ever, but now Yahoo! has a cloud of uncertainty hanging over it. In a way, Microsoft has made Yahoo! look like a small player by just making the offer, showing that Microsoft could devour Yahoo!.
Frankly the general idea is correct, the reasoning is not. MS (publicly) doesn't want Yahoo because they effectively loaded themselves with a poison pill to keep Microsoft from taking them over. They've done things like partnering with Google and giving executives very large golden parachutes that make it very unpalpable if not outright hard for Microsoft to acquire the company and not end up with a mess and/or FTC troubles.
It is bad news for Yahoo employees and shareholders though. The company really is going nowhere, it's going to limp on for years like AOL or get picked up for pennies by Google if it could be cleared by the FTC. The best deal for the shareholders would have been to approve a buyout, but Yahoo's poison pill plan did a pretty good job of stopping that.
I think the deal was sincere, that basically MS was genuinely trying to buy Yahoo as a way to get a lot more presence online and try to slow down Google. I suspect they believed most Yahoo execs and stockholders would have been excited at the prospect of getting so much money, and never anticipated Jerry Yang really being able to get so much of the board to think it was a bad idea.
Without an alternate reality time machine, we'll never know if it was really bad or good. Yahoo is not a leader in much of anything at the moment, but I don't think it's crazy for such a company to believe their best days might yet be ahead of them. It's not like they're AltaVista or Ask.com, they have quite a bit of clout and a lot of popular services despite Google's dominance.
MS was certainly not getting much of anywhere with MSN or whatever they're trying to push this week. With their new "Live!" stuff being integrated into Windows and Office, they finally have a decently compelling online product to try and spin off of, but they don't have anywhere to spin people *to*, in a way that would keep them in an all-MS ecosystem. Yahoo could give them all that in one deal.
Recursive: Adj. See Recursive.
You know if Microsoft had all of that money and stock set aside ($1.5 billion just for employee retention) and didn't buy Yahoo!, they are going to buy someone else. AOL makes sense and the price is right, as Time Warner wants nothing to do with them.
"I'm not crazy 'cause I take the right pills everyday"
Honestly, do you possibly think you could recover that much money with goods from Yahoo? This crazy idea to buy Yahoo was a combination of two things: ignoramus upper management and pressure from Google. Too many businessmen only understand how to make money from advertising. Who put them in charge? You need to weed them out and put in upper management that understand the beauties in your software that is currently making you money. Let Google make the money in the internet. Quit worrying about them or your silly MSN or other sundry internet ventures.
Instead, you should invest that money in your operating system, the APIs for your OS, the tools to make it easy to create applications for your OS. Make a serious real time OS. Unify your OSs. Architect them so that you can crank them out faster and safer. Make your driver model easy to understand and code for. DirectX seems to do good for you, but you had better keep up on it. The same is true of C#. Give these Java folks some stiff competition in language, libraries, and tools. Make the speed of your CLR rock. Make it vectorize, use the SIMD, automatically use multiple cores, etc.
In summary, make businesses want to run on your platform, develop for your platform. You want every office to use your software tools. It won't matter if every office uses your search engine when they go to get info off the internet. That's not the most effective way for you -- a company with an already vast installation base -- to make money.
That's what I've been thinking. If I were a Yahoo shareholder right now I'd be very, very pissed off. The board of Yahoo was really looking out for itself here and not for the shareholders - no way no how Yahoo was even worth what Microsoft offered originally.
I don't know about all that. Personally, I don't have all that much faith in Google. Granted it's a hard lesson to learn, but things do change and market variables do in fact vary. Online advertising is far from being a mature field and there is a great deal of value left in Yahoo. You may be right about them sort of just drifting listlessly, but again this whole market is crazy.
One thing I can tell you for sure is that being acquired by Microsoft would have ended Yahoo as we know it. Everything the company had to offer would cease to exist in order to be replaced by microsoft's own stuff. So don't be so sure about it being the best deal for investors. It's been profitable up to this point, and there is no reason it won't be for a long time. There is nothing wrong with investing in a company that has non-astronomical growth. They don't all have to be hedge funds.
I got a catholic block.
No machinations, at least nothing subtle. Basically MS is walking from the deal because Yahoo threatened to do a long term alliance for search revenue with google, which would have completely ruined any possible value for Microsoft.
The audience for the letter wasnt Wang though, it was the shareholders. Lots of people in the Yahoo camp are pissed they didnt already accept the deal. Lots more are going to be pissed they turned down 33$ a share. Even more are going to be pissed when the stock price plummets on Monday, as its been going up on the assumption that the acquisition would happen. I wouldnt be suprised to see a single day 6 - 8 $ a share drop. That will lead to even more shareholder lawsuits and I don't doubt that in the near future Wang will be out on his ass, as his position was hanging by a thread already.
If this happens, MS could actually swoop back in and buy Yahoo for a discount ( see BEA/Oracle for example ) in the future. Otherwise Microsoft may have managed to damage a rival by causing such chaos and internal strife.
Personally as someone who holds MSFT shares and watched them drop 3$ the day this (horrible!!!) deal was announced, I say THANK GOD! My only prayer is that this is finally the thing that gets Balmer ousted. I can only pray.
I personally am kind of sad that Microsoft didn't buy Yahoo. I had a kind of deja vue about the whole thing which I couldn't place, and it only occured to me yesterday: Time-AOL.
When AOL was so bloated with cash they didn't know what to do with it, they bought time. It was a marriage made in hell. Time didn't have anything that AOL needed and AOL couldn't offer Time anything. When the dot bomb crash happened, AOL lost value quickly to eventually become the struggling company today that only exists because of a legacy of users who never switched to better offers.
I had the kind of feeling that that would have happened to Microsoft as well had they bought Yahoo. They would have parted with almost half their operating capital for something that would have given them nothing. Given the fact that Microsoft is not exactly rapidly gaining marketshare at the moment, it could have hurt them badly.
Because you don't know anything about business or finance, at a minimum.
Microsoft made a huge error bidding on Yahoo. It was never worth that much, especially considering the time it would take to digest the acquisition.
Yahoo made an even bigger error not taking the offer. Their business is in the toilet, shows absolutely no signs of improvement, and this was one fabulous way for investors to cash out. (And if you are a Yahoo investor and hadn't sold yet, that was an error as well.)
Of course, the arbs are gonna be sore on Monday.
MS and Google don't just sell ad space on their own pages, they both handle advertisement on a variety of pages. That's how they make money and generate traffic. Yahoo does this as well, and actually have the highest traffic generation worldwide still today, so it makes sense that MS would try to acquire Yahoo to try to compete better with Google. I do agree that MS should try to stick what they are good at, but the fact is that almost everything is shifting online and MS needs to stay competitive.
The good deal for the Yahoo investors would have been the instant payout. They would have gotten a combination of cash and Microsoft stock at a value that Yahoo just isn't worth and is unlikely to ever get to on its own. So it wouldn't really matter what would have happened to Yahoo in the meantime.
Mac OS X and Windows XP working side by side to fight back the night.
Microsoft is very interested in providing choice to customers, even if it requires buying out the competition.
Can't you see how sincere he is? It's all about choice! That's why Yahoo! was supposed to sell to Microsoft. Choice!
But wait - what if Yahoo! were to ally with, well, other search providers?
That would be bad. See, Microsoft buying Yahoo! means giving people more choices. Yahoo! doing business with Google means reducing choice.
That's why it is crucially important that Yahoo! picks the right megacorp to associate with. Think happy puppies. Think Microsoft.
Dewey, what part of this looks like authorities should be involved?
Yeah, similar to the Intuit deal that fell through ten years ago... Intuit seemed to lose its momentum after that.
Don't forget, though, that Microsoft's online division is now a *really* bad place to be right now, thanks to the vote of no confidence and continued uncertainty over Microsoft's interest in Yahoo. Yahoo and MSN are both big losers. Of course, that doesn't keep Steve Ballmer awake nights.
3 things about computers: they're alive, they're self-aware, and they hate your guts.
being acquired by Microsoft would also have killed BSD. Yahoo runs on Yahoo BSD and a lot of yahoo's internal coders are important in various BSD projects in their spare time...
right now running FreeBSD really doesn't make sense compared to say, Ubuntu because Ubuntu makes desktop Linux easy, but for a simple server, FreeBSD is still a viable choice, thanks in large part to yahoo.
Microsoft was running FreeBSD machines to host hotmail for a long time after acquiring them, but eventually they shifted them to MS operating systems just to demonstrate to customers that MS could run a complex free webmail site with computers 20 times more powerful that they needed to run it with a BSD os..
so having the experience, microsoft would have killed BSD and force upgraded all of yahoos servers from a lean custom built OS to a bloated general purpose OS that was never really designed to be a server platform.
just to say 'this is how you use microsoft server to quadruple the cost of running a massive web portal' yeah, yeah i know they would have pretended like it was cheaper, with FUD about how much it costs to 'maintain' a custom light weight OS designed to be used in server farms...
https://www.gnu.org/philosophy/free-sw.html
And a million (give or take) flickr users breathed a sigh of relief (and of course narcissistically photographed themselves breathing that sigh of relief).
which is totally what she said
Well, yeah, Yahoo Mail plus Flickr plus a lot of other stuff (their jobs and personals sites are quite significant, for example) that ties in well with their push into more entertainment and online ventures that serve to convince home users to stop using XP and Office 97. Having an MS Photo Editor that automagically syncs with "MS Flickr Live!" would be a great boon. They'd get the best online maps service outside Google, as well.
Don't forget that Apple is working so closely with Google these days, the two of them are creating a formidable presence in the mobile device world. MS certainly NEEDS the next version of Windows Mobile to have maps and photos and all that cool stuff be just as slick and connected as the iPhone versions, otherwise they risk losing customer loyalty even in their traditionally strong corporate market.
Recursive: Adj. See Recursive.
Newsflash: the media wouldn't give a fuck about OOXML no matter what Microsoft did. Another newsflash: Microsoft stopped being spelled with a capital S over twenty years ago.
Yahoo has places to go and ways to grow. They might tank, but that depends on how smart they are.
Microsoft, on the other hand, has Vista hanging around its neck like the proverbial albatross, and Windows 7 is looking a lot like some glorified version of shareware that I'm going to start calling "Rentware" whenever anybody asks me to describe it.
Yes, Microsoft owns the world right now. But they've pissed a lot more people off world-wide than Yahoo has with its "Send A Dissident To Camp" policy (ratting out Chinese patriots to the corrupt pack of mass murderers currently infesting Beijing). And don't forget Microsoft has kissed its share of fascist ass, too.
Yahoo was right to tell Microsoft to put serious coin on the table or fold.
I've calculated my velocity with such exquisite precision that I have no idea where I am.
As a paying Yahoo Mail Plus customer, this is precisely my opinion as well.
Good riddance, MSFT. Go embrace and destroy something else.
I can see the fnords!
No future in another regard, and one I'm actually surprised nobody has really taken the time to mention. Ponder this - how many of the truly talented Yahoo engineers would honestly work under the MSFT umbrella? A paycheck is one thing, but people aren't innovative because they're paid. AND a good engineer won't sit and "just" collect a paycheck for long.
Microsoft's stock dropped because making the offer demonstrated conclusively how poorly Microsoft's business is doing.
(Btw, if Yahoo rejects a bid and Microsoft does not make another bid, that does not mean Microsoft has withdrawn its bid. That's means Microsoft has been rejected by Yahoo. Just a little hint for the person who wrote up the article summary.)
And that is also my take on this. I look at Hotmail, then I look at Yahoo mail, and the conclusion comes naturally.
But also, the Yahoo search engine is as good as Google's (in pure search, but it doesn't have fancy features as Google Math, though) while Microsofts is in a different - lower - league.
I am also quite fond of Yahoo Groups and Babelfish. So for me, as a customer, this is very good. Sorry I can't muster much concern for shareholders. Perhaps this is good for them, too, in the long term.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
You imply intelligence in the stock market whereas there isn't any, nor does it have an inherent rationality.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
Actually I believe that MSFT wanted yahoo ...
.. well, do I need to spell it out?
Nothing personal, mate, but I really do wish people would reconsider referring to a corporation, in a general discussion, by its stock exchange ticker symbol.
What is this? News for Financial Market Junkies?
I believe the company's legal name is Microsoft Corporation. That would be "Microsoft" for those inclined to save a few keystrokes, "microsoft" or "ms" for those preferring speed over clarity and reader comprehension, or variations on "Micro$oft" for those inclined to sophomoric humour. Hell, even The Evil Whose Name Shall Not be Spoken would work. But using an indirect reference when a direct one would be more meaningful
If you make your living trading securities one might be inclined to overlook it as a professional gaffe, but until I read something along the lines of MSFT wanted YHOO but were afraid of GOOG and threats from NOVL and RHT., the absence of consistency leaves me wondering WTF the context of the discussion is, and WTF the writer is really trying to say. If anything.
If you have ever used FreeBSD and Mac OS X, you will have noticed they have a lot of differences under the hood. The fact they do not run the same kernel is not one of the least important differences. XNU, while it borrows a lot from FreeBSD, is a different beast. The particularity that the operating system does not run the same exectuable format (ELF vs Mach-O) is another thing you should not dismiss. Those are only two examples, but there are a lot of others.
I don't know, but am I the only thinking Microsoft lost credibility in the process?
Credibility in what field? In the field of business I'd actually say they gained credibility; a merger with Yahoo would have been horrific for both companies. The fact that the board stopped this shows there's some perspective in the company at least.
Am I just not understanding what this was all about?
Ballmer not being able to stand being second or third in any field? Now, if instead of credibility, you mean Ballmer lost face, then I'd agree.
Maybe it really is about some high-level finance strategy that only people in the know can grasp?
Unfortunately I don't think it's that complicated. I suspect it's just hormones.
Balmer did nothing wrong - why do I say? He screwed with one of his ad competitors (yahoo) made them look like dog sh*t; smoked out Google and finally nothing like getting the troops at msft at least moving again..they have been lame competitors since the DOJ bullshit... Balmer had nothing to lose and a ton to gain on the competitive strategy side..finally good to see Yahoo get competitive or at least hitting the proverbial gym.. This was doomed from day 1 http://techwatch.reviewk.com/
Do you really think Microsoft needs the free press? They're a huge company, with a huge presence, and they have the best advertising around: every time you go to buy a program, a game, a DVD, a CD, a peripheral or really anything to do with a computer the box announces that Microsoft Windows is either required or recommended.
Or perhaps MS theorized that they could take the stock value hit for this little escapade, full knowing that it would drop Yahoo's stock value considerably when this outcome was "decided upon" by Microsoft?
Of course that is just speculation/a possible alternate theory based off what happened. Either way, Microsoft, in one way or another, wins to some extent... either they own Yahoo, or Yahoo becomes "worth" less.
StarTrekPhase2 - The Five Year Mission Continues!
You mean up *to* $30, right? Not up *by* $30, I am assuming (you didn't say "to" or "by" but it could be read the first way)... :-)
I still think it will remain flat, or go into a bit of a decline. Microsoft is not showing much of a vision at this stage and they are weak if any positive news about competitors (Google especially) should arise.
But really now, I think it will pretty much sit there, lethargic (and even a move up to $30 is not much considering it's just above $29 currently).
Of course Yahoo will be down, until they actually do something. But they are ahead of the game already just by staying well above where they were before the whole MSFT thing started, which may yet save them from total shareholder revolt.
"There is more worth loving than we have strength to love." - Brian Jay Stanley