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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mksmac writes "According to the KOMO TV Website, Microsoft has withdrawn its bid for Yahoo after presenting them with an increased offer that was subsequently declined by Yahoo.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.

6 of 336 comments (clear)

  1. My question is... by kithrup · · Score: 5, Interesting

    This doesn't seem to have been a particularly well-handled, or deeply-sincere, attempt by Microsoft... so what were they really doing?

    This is a sincere question; I've seen a lot of acquisitions (and even hostile takeovers) happen, and this seemed lacking in many ways. Maybe I've missed some of the machinations; maybe not.

    1. Re:My question is... by Anonymous Coward · · Score: 5, Interesting

      Microsoft is in the process of buying back stock with their oh so massive capital. They just got to spend months doing this with a defalted stock price because of the buyout offer. Now that the offer is off the table, the stock price should start to go back up.

    2. Re:My question is... by CodeBuster · · Score: 5, Interesting

      It wasn't just the Yahoo executives who weren't interested in the deal. There was no way that Microsoft could win a proxy fight for Yahoo at anything approaching a reasonable price. The founders and various other individuals (including the board) owned about 34% or so of the outstanding shares and there was at least 25% more owned by individual investors (who rarely bother to vote in proxy fights which means that the board would get to vote those shares too). So the board and the individuals opposing Microsoft controlled at least 60% or so of the outstanding shares, making any hostile takeover direct shareholder tender offer a non-starter (unless Microsoft offered an insane price which they obviously weren't going to do). Microsoft did the only thing that they could do, they made the prudent decision and walked away.

    3. Re:My question is... by hairyfeet · · Score: 5, Interesting

      Actually I believe that MSFT wanted yahoo because Yahoo mail is the number one web mail,followed by Windows Live mail. That combination would not only give them a big chunk of the web mail but tons of new data to mine. I am personally glad they quit as I would have hated to see my Yahoo mail end up some nasty Hotmail copy. But that is my take on it,YMMV.

      --
      ACs don't waste your time replying, your posts are never seen by me.
  2. Re:I'm torn by Anonymous Coward · · Score: 5, Interesting

    Well, as an employee, I saw it as a win-win, assuming I could find another job. Either Microsoft would turn over a new leaf and actually make the combo work well. Or it would be the death of Microsoft.

    And, unlike a lot of the folks there, I'm fairly confident that I'd be able to find a new job the second it became official.

    It's one of those dangerous ideas that you really need to be a nerd and know microsofties, googlers, and yahoos in order to understand exactly how stupid of an idea it really is.

  3. Savvy move by MillenneumMan · · Score: 5, Interesting

    Yahoo's market cap takes a hit, shareholders initiate lawsuits against the Yahoo board. Microsoft may be able to swoop in next quarter and accomplish this via hostile takeover for significantly less. Surprised Microsoft didn't do this sooner