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Why Yahoo Turned Microsoft Down
quarterbuck writes "The NYTimes has up a great blog post that explains a bit of the backstory behind the Yahoo-Microsoft No-deal. While Jerry Yang did not want to sell the company, it is not likely that he could have said No to Microsoft, and explained it to shareholders, without the help of Google. The article gives reasons behind Google's tossing a lifeline to its biggest competitor, and the 'coop-etition' that has been going on between the two companies, which both emerged out of Stanford University."
of chairs.
Hail Eris, full of mischief...
E pluribus sanguinem
If Yahoo's stock price continues to decline, MS has intelligently kept their offer "on the table".
If stockholders come to MS for a bailout of their capital, they don't even need a hostile takeover -- it will be a willing one. And the profits Yahoo posts from Google won't reflect in their stock price for a while.
We'll see how long it takes Yahoo investors to either let the company rebound, or to bail themselves out. Yang is in an interesting position, that's all I can say.
The price is always right if someone else is paying.
That's funny because I made a small fortune on the Google IPO. I sold and put it into safer investments since that time and don't regret it, however. I think it's way overvalued at the present time but I was happy to take my profits and run.
your shareholders are gonna grill ya like a barbecue
Only together can they defeat Microsoft, and rule the world as a monopoly so strong that even God will fall to his knees before them!
SJW: Someone who has run out of real oppression, and has to fake it.
Why google helped yahoo? Because it tries to "do no evil". And microsoft is bigger competitor than yahoo (would be even bigger WITH yahoo).
Extreme Programming - Redundant Array of Inexpensive Developers
I wonder if Ballmer is going to "Fucking Kill" Yahoo now?
Freedom would be not to choose between black and white but to abjure such prescribed choices. -Theodor Adorno
Giving a direct competitor a life line as to avoid the Goliath the merger would become while meanwhile stagnating the competitor.
Wow, I don't think I'd want to be in THAT risk assessment meeting. Then again, they did it for ASK.com and apparently it's working there too.
Competition leads to innovation
Ask not what you can do for your country. Ask what your country did to you
1. Microsoft probably can and will figure out a way to eventually stack the board of in directors in their favor at Yahoo. Microsoft has time, Yahoo doesn't.
2. Google is keeping their enemies closer at this point. This is basically a white-knight move on Google's part to keep Microsoft out of their space at all costs. The question to Google is how long will it be until this kind of action starts affecting their bottom line numbers.
In a very heartless way, I'm all for the Microsoft->Yahoo acquisition. Most acquisitions fail to generate anything near the claims management makes. Microsoft would simply leave the door open for ex-Yahoo employees to startup things that would be a bigger thorn in Microsoft's side.
Death by thousands of thorns if you will pardon the pun.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
That's really the crux of all of this. The fact that the founders of both went to Stanford is hard proof of what I've always said: they are all part of a secret railroad monopoly plan hatched by Leland Stanford in the 1800s.
That's why he orchestrated the Hoover presidency and built the linear accelerator facility, which looks like the all-seeing eye when seen from the air. Google is really just a corporate front for the Stanford band, whose shadowy aim is to take over the world from their trailer, where Leland Stanford is kept cryogenically frozen!
The world, I say!
Yang didn't want to have to shake hands with Ballmer.
RutSum.com
MS's stock has been headed down, and will continue to do so. Selling Yahoo stock for MS stock would be like abandoning a seemingly good row boat for a sinking yacht, and leaving the row boat in the path of the yacht to get smashed. MS doesn't know what to do with Yahoo. If they did they could and would have done it without Yahoo a long time ago. If they do acquire them at some point it's going to become more of a mess than it already is and all of the value that it does have will be squandered.
I do not (and never have believed) that Jerry Yang and the rest of the Yahoo board was ever were serious about selling the company. Any negotiations that Yahoo's board entered into were done in bad faith and in violation of the board's obligations to the shareholders that elected it.
For example, look at the actions the board and management took right after the offer was announced. They enacted huge employee termination compensation plans, including golden parachutes for management. They entered into contractual arrangements with Google that would diminish their acquisition value to anybody but Google (which the DOJ would never approve). They tried to make a deal to acquire a portion of AOL It's clear that these actions were designed more dissuade Microsoft more than they were designed to deliver any shareholder value, which is the primary responsibility of any publicly held company.
Yahoo's board was acting in its own self-interest. I expect plenty of shareholder lawsuits, and given the fact that the stock has traded almost 30% of its shares outstanding in the last two days, I expect a proxy battle to oust the board as well. Yahoo's board has violated its fiduciary obligations to its shareholders and will likely pay the price for this.
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
Everyone, truly deep down inside loves Microsoft. They are the best software company in the World, after all. I want a "I Love Microsoft" T-Shirt to wear to the SQL and Defcon Conferences so I can get flogged!
I am making a fortune on YHOO right now. Bought in right after the panic on monday.
Jerry's sentiment was that he mismanaged Yahoo into it's present situation, and he would prefer to mismanage Yahoo out of it all by himself.
Exactly! Google understand this. Innovation is the future, buying old already established businesses is not
IMHO, The interesting thing is that this was such a dumb idea that even greedy investors did not seem to want it. As soon as the buyout was proposed, MSFT stock tanked well over 10%. It regained some in the weeks after, but the biggest gain occurred when it looked like the deal would go bad, and when it became clear that Balmer was going to do the damn fool thing, the stock tanked again. Not a rousing endorsement that this deal would do anything positive. On the Yahoo side, the stock briefly spiked as some investors were looking for a quick payday, and others were looking to get rid of an investment they perhaps paid too much for, but no on really seemed to think it was a good deal as even when it seemed like MSFT might raise the bid to $37, the stock never went above $29, which seemed to indicate that investors seemed to think of this as a windfall and not a long term thing. Of course, the most interesting thing, is that while MSFT stock has not recovered, yahoo has not fallen back anywhere near the january lows.
As I see it, Microsoft was simply willing to burn some money to get some experience in a field that they are flailing in, and to knock out the competition. It was not a growth strategy, simply a way to tread water. Given that MSFT is still perhpas 20% down on the year, while yahoo is somewhat in positive territory, i imagine that this act of desperation has done more harm than good.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
I would have posted:
http://finance.yahoo.com/q/bc?s=YHOO&t=my&l=on&z=m&q=l&c=msft
to make his point (a point I disagree with.) Stock price (at least in this case) in no way shows "profit" then again I don't know how to get that graph in 5 minutes or less.
I was going to hop on that bandwagon but I think I'm going to hold for a couple weeks. I feel a big announcement coming soon and I want to let the current holders fester scared first before I grab their goods at a lower price.
*sigh* I love capitalism!
If Yahoo's stock price continues to decline, MS has intelligently kept their offer "on the table".
When you posted, and currently, YHOO is up $1.35 for the day to $25.70 or so.
As another poster noted, that is well above the $18 or so YHOO started at before the Microsoft offer.
YHOO is doing just fine...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
So you're gonna trust yahoo to report it's own financial health? :)
...to be in the (hopefully chairless) room when Ballmer heard this news. The look on his face must have been priceless. Google is playing Chess, while Ballmer can barely handle checkers.
Insightful and funny are really the same thing, except one has a punch line.
All the analysis I've read is just nonsense. Google knows something that Microsoft and business analysts don't have a clue about.
A thriving market place makes a lot of money for everyone, yourself included. You have a vested interest in maintaining the market place.
The loss of a major fair playing competitor and the introduction of a stronger destruction driven monopolist makes it harder for everyone, including Google, to make money.
Google wants yahoo in place. They make money from Yahoo. Yahoo wants google in place, they make money with google. Where their businesses do not conflict, they work together. Both Yahoo and Google aren't fighting to destroy one another, they are in business to make money. It is friendly and profitable competition. They way it should be. The that capitalism works best.
Microsoft on the other hand can not compete on a fair market. They never have and never will be able. They must capitalize on their illegally maintained windows and office monopoly to destroy competition and destroy the marketplace leaving only enough business for themselves.
Google is a strong competitor, I don't "trust" them per se'. for The time being, however, they've shown that they understand ethics and the phrase "a rising tide lifts all boats."
Exactly! Google understand this. Innovation is the future, buying old already established businesses is not
Well, no. Basically everyone big in the industry, including both Google and Yahoo!, also buys successful companies to replace their homegrown failing offerings in the same space. Without even leaving the fairly narrow field of online video offerings, I give you Exhibit A: YouTube. Exhibit B: JumpCut.
The enemy of my enemy is my friend
No wonder Ballmer hates Google. Stanford 2, Harvard 0. Wonder how far the chair flew this time. Maybe Ballmer should talk to the X Prize peole.
...when it was revealed Ballmer would chair the meeting
"We live in a global world" - Harvey Pitt, former Securities and Exchange Commission Chairman
... you don't care about the share price.
If you do care so much about the share price, you are an speculator.
IANAL but write like a drunk one.
It hasn't been all peaches and cream for the Wii.
Wii, though less technologically advanced than Microsoft's Xbox 360 or Sony's PlayStation 3, continues to outsell those machines and is now in more than 20 million homes.
So why are retailers having so much trouble selling Wii games?
Take Super Smash Bros. Brawl. It was one the most hotly anticipated video games of the year; it sold more than 1.4 million copies during the first week of its release.
But sales dropped more than 90 percent over the first four weeks.
A number of games that garnered critical acclaim in recent months, notably the cartoonish action-adventure game Zack & Wiki and the off-kilter action-adventure No More Heroes, have yielded disappointing sales.
Over the first three months of the year, only three other Wii titles broke the list of top 10 best-selling games.
Younger children, women and older consumers, who historically have not been sought by the video-game industry, have discovered video games through the Wii -- just not that many of them.
These new gamers are content with the games they have, often going no further than the Wii Sports game that comes with the machine. They don't buy new games with the fervor of a traditional gamer who is constantly seeking new stimulation.
The average Wii owner buys only 3.7 games a year, compared with 4.7 for Xbox 360 owners and 4.6 for PlayStation 3 owners.
"When you make a game like Zack & Wiki or Boogie, which turns the hard core off and doesn't reach the masses, then you're in trouble."
Wii Fit, an exercise game due next month, is expected to receive more marketing dollars than any game in Nintendo's history -- and the money will not be spent wooing young men. "Wii Fit is just not aimed at hard-core gamers. It's definitely aimed at the Oprah crowd. I bet they sell a million units a week for every pound that Oprah says she lost on it."
New Wii Games Find a Big (but Stingy) Audience [April 21, 2008]
Eric Jackson, president of Ironfire Capital, is trying to recruit an alternate slate of directors to present at Yahoo's annual meeting on July 3."We are hoping to turn that (meeting) into 'Independence Day' for Yahoo's shareholders."
Yahoo's board wanted $37 per share -- a price that the company's stock hasn't reached in more than two years.
"It's hard to believe the board could let this happen," Jackson said. "I think they completely misconstrued the situation and thought, 'Microsoft is rich, so let's soak them.' They were bluffing all the way and got caught."
The possibility of revived talks helped lift Yahoo shares by $1.35, or 5.5 percent, to finish Tuesday at $25.72. That left Yahoo's market value more than $10 billion below Ballmer's last offer.
Although he only owns 96 Yahoo shares, a sliver of the roughly 1.4 billion outstanding, Jackson has experience rallying stockholders around a common cause.
Jackson spent several months leading up to last year's annual meeting organizing an online protest against Yahoo's Terry Semel, the CEO at the time. The crusade culminated at the annual meeting, where Jackson confronted Semel and asked the CEO if he still had enough "fire in his belly" to do his job. Semel resigned six days later and was replaced by Yang. Jackson's latest revolt may find two powerful allies in Yahoo's two largest shareholders, Capital Research Global Investors and Legg Mason, whose portfolio managers have both publicly expressed their disappointment with the Yahoo board's demand for $37 per share.
Already, Yahoo stockholders with about 3 million shares have pledged to support Jackson's attempt to replace the board. Yahoo board may face shareholder mutiny at annual meeting
as in Coke and Pepsi dividing the market to prevent any real competition from ever emerging.
I don't need no instructions to know how to rock!!!!
on the internet. big buck corporations with past century's mindset have been dominating everything for way too long. sorry ms fanboiz, but your ms is also one of the corporations that was founded and living on the late 19th and early 20th century big buck mindset. and these companies DO pull a lot of sh@tty stunt, regardless of anything, anyone, to increase their profits. they dont even care for their own customer base, as you can see from the games that are being played in u.s. senate in the recent years - all to the detriment of people, to benefit of them, including trying to abolish net neutrality to immunity for telcos.
it was about time the 'good guys', the companies that are founded on the new, up and coming understanding of the internet age and people had started acting up and standing up. this, was the kind of thing we needed to see all along - pulling a stunt against big buck. even though corporations they may be, in their own right, these two (google and yahoo) are much more the 'people's kind' of corporation than microsoft, at&t, comcast and whatever old big monolithic bastardly hunks of corporations can be.
now, if only those 'new guys' had today's understanding and preemptive mindset since 3-4 years ago, we wouldnt ever risk network neutrality going down the drain, or wouldnt have telco immunity sh@t at our door today.
Read radical news here
It's funny how MS-bashers have created such a finely-honed and specific definition of "monopoly" that it only applies to Microsoft, as if no other company can be evil but them.
Speaking of MS bashers, I think it's funny the first post ranting about Microsoft and monopolies is yours.
FalconShould there be a Law?
It's only dead-cat-bounced about 10%, if I'm not mistaken. That's nothing to sneeze at, but you'd have to buy a ton of it to make a fortune.
...wearing a skin-tight topless leather jumpsuit, with cutaway buttocks and transparent crotch panel.
Yahoo is worth a lot to Microsoft and Google knows this. In a few years most people will have a small terminal with a free (linux) bootstrap OS to get them connected to the Internet. All apps and storage will take place there. Microsoft's entire business is about to go away. Google is already heading in this direction and Yahoo is the only other possibility for MS to get a foothold. The Internet is going to become a mainframe for everyone and who controls the apps you use and the storage you get will be very rich and powerful.
Calling someone a "hater" only means you can not rationally rebut their argument.
Delusional much? Google doesn't actually develop services any more - damn near every new service has been the result of an acquisition!
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
5 dead cat bounces of 10% in a year give you at least a 45% annual rate of return, even after (ridiculously low) US capital gains taxes.
No matter how you slice it, that's good.
The trick is consistently finding the dead cat bounces instead of grabbing something just part way into its slide to oblivion. It's my understanding that the vast majority of day-traders who try to time the market in things like this end up losing money. I wish the author of the parent post good luck, it's not a game I want to play.
Both companies have lots of angry shareholders according to the news.
The day after MS says "nevermind" Yang says hey hey sliding stock, we're still open to MS offers.. (pls stop skidding stock) then old man Gates himself comes up the day after with.. umm Jerry.. no. We're done with you. Screw your weak attempts to stop the slide. (inner voice says "and when it hits $20 a share we'll be back") Shoulda took the money and run Yahoo..
Watch the enemies come together because of their irrational fear of chairs. Next week Extreme Home Makeover will make them a chair-free house!
I still remember when I switched over from using Yahoo's search engine to Google's 7 years ago. I was on an unreliable dial-up connection at the time and had to disable a large amount of features to make browsing the web feasible. It wasn't that Google gave more relevant results or that I wanted to I had some special attachment to the company, it was the fact that I could load up Google's home page in a quarter of the time I could Yahoo's.
This isn't much of a factor for me anymore, as with a broadband connection, the difference in load times is negligible. The main reason I use Google now is familiarity.
There is, however, still a large amount of people on dial up out there, and for these users Google's homepage would still load up the fastest. How MSN and Yahoo could have not picked up on this simple thing over all this time still amazes me.