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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."
The merger of the company with the vast majority of web searches with its next-closest rival would never win the approval of the Federal Trade Commission.
Google needs Yahoo! to stick around just like Microsoft needs Apple. Each company would have an effective monopoly of their respective markets if it weren't for their smaller rival, and would risk being broken up by the FTC.
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.
What about the MS Shareholders?
Buying a house that is a money hole at half off is still buying a money hole.
Strategically, MS buying Yahoo makes no sense at this point because they already have MSN and if they simply axed yahoo it will benefit Google more than MSN. If I owned MSFT at this point, I'd be breathing a sigh of relief.
"I am the king of the Romans, and am superior to rules of grammar!"
-Sigismund, Holy Roman Emperor (1368-1437)
You're completely missing the point. Yahoo is still way up since the announcement of the offer months ago and has essentially done as well as any other tech company since it's inception.
http://chart.finance.yahoo.com/c/6m/y/yhoo
http://chart.finance.yahoo.com/c/my/y/yhoo
With the current administration, they might not bat an eyelash at a Google-Yahoo merger, but the FTC doesn't break up monopolies just because they're monopolies. That's perfectly legal--the rules are in place to prevent companies from "cheating" to maintain their monopoly or leverage a monopoly to create new ones . . . like using an OS monopoly to establish an office suite monopoly, corporate e-mail monopoly, web browser monopoly and/or media player monopoly.
(as you can see, these rules have been working quite well in recent years. *rolls eyes*)
Managing a company is also supposed to take care of it in the long run. Making one small onetime financial income at the expense of the company isnt god for the shareholders that are in it for the longer run. You are talking about day-traders and not real investors. A marriage with Microsoft would most surely spell certain doom for Yahoo as a company.
Its also not sure a Microsoft would be allowed to use its monopoly money from the Windows division to create another monopoly in search further on. Google buying Yahoo on the other hand shouldnt be a problem since its only when you use your monopoly in a bad way that US laws come into action or if you use one monopoly to subside taking over an adjecent market.
Shareholder value is not equal to stock value, its about what the company does in the longer run. Stock value is often completely useless as a measurement for how well a company is doing. Look at how long SCO had roaring high stock value? Was their moves good for their shareholders, except for hedgefunds and daytraders and other scum?
Yahoo has acted to continue living and not being bought up and then dismantled quickly after being gutted of its users. A shareholder cant just sue because its board do not favour short onetime gains at the expence of the companys future. If that was the case we would see companys gutting themselves and selling the pieces and totally disregard any possible future incomes down the line from products not yet released to the market.
HTTP/1.1 400
I don't think it really has anything to do with that at all.
When companies merge (or are acquired) their stock prices tend to go up in the short term. So it makes a lot of sense for buyers to buy Yahoo stock right before the merger (and sell shortly after) and for the current shareholders to sell.
In other words, with Yahoo refusing to sell, the shareholders can not cash in and make a shit load of money.
Yes the stock is down right now, but by "loose money" I interpret that as "now you can't sell when the stock price immediately jumps up due to the acquisition and get filthy stinkin' richer than you already are".
The only people who would care in the slightest what happens to MS or Yahoo in the long term are people looking at long term investments. I think the only people in that camp are the top Microsoft shareholders (obviously or they wouldn't be looking to acquire them). The rest of the Yahoo shareholders just wanted to cash in and go retire on their yachts.
I don't think that's true. Stock prices usually respond in anticipation of an event. Investors know that this is going to happen so they have already factored it into their willingness to buy or sell. Later, when the event actually happens, the response in share price will be a correction to do with how well expectations were met.
...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.
Or, to put it concisely:
Yahoo: Established and large customer base.
MSN: nth incarnation and still nobody gives a shit.
It's pretty clear here. Microsoft needs a web portal presence that someone is actually going to lose. MSN has been around since what, 1995, and has never really gained any traction. Yahoo was the early king, and Google became Supreme Search Overlord a little later in the game, but the key point here is that at no point in Microsoft's history on the Internet has it ever been in any meaningful way associated with web searching and web portals. It's pretty obvious to anyone (and that includes Ballmer) that no matter how hard Microsoft tries it will never achieve any kind of meaningful market share, meaning there's at least one major (and arguably becoming THE major) platform on which Microsoft has been utterly scooped and apparently cut out of.
Microsoft would very likely dump MSN if it could get its hands on Yahoo (not the other away around). MSN has little brand power, whereas Yahoo, while hardly the big guy, is at least a distant second, and thus still has something left to its name.
Of course Google is going to keep Yahoo alive, for the same reason that Microsoft through a lifeline to Apple in the 1990s. Sure they're competitors, but if you keep them alive, to some extent you can control them. Google sees little threat from Yahoo. It's likely to stay at its market share for the forseeable future. Yahoo backed by Microsoft $$$ is more of a threat (though not nearly the one that Microsoft envisions). Keep the company going, and at least you're dealing with the devil you know.
Of course, if the stock keeps heading south, at some point Yahoo's shareholders will probably give a hearty "fuck you" to Yang and deliver Yahoo into Microsoft's hands. But if they don't, I'd say the most obvious casualty isn't going to be Yang, but Ballmer. He's damned close to having a Eisner moment here.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Wow, such vehemence over a silly video game console... There are three choices to pick from here...
A) Your a troll (probably true)
B) You still can't find a Wii (perhaps)
C) Your suffering from cognative dissonance for buying an over priced console, and this need to justify why it is uber1337(!!!one1!1eleven!) compared to the popular one (from your tone, I'd guess this is true, along with option A)
There is no 7th generation technology, all of the various consoles are different, but all of them are in the 7th round of the console wars, therefore ALL of them are 7th generation. The Wii bag of tricks, though, just happens not to be playing the same horsepower game that has been the rule since SNES and Genesis. So graphically it IS a glorified Gamecube, but lucky for them, that isn't the point.
I didn't know there was a correlation between what console's you buy, and what your IQ is, btw. Do you have a study to cite on that? I would argue that the people who bought PS3s would be the ones with a lower trend, since it costs more than the alternatives, but does the same things. Oddly, I bought a Wii because I'm an adult, I don't have the time to play 4000000 hour graphical frag fests anymore, and am too old to actually equate graphics with good games. Its part of the equation, but not the equation itself.
The Wii is about fun. I respect that, even if I have to check my 1337 haxx0r badge off at the door.
Back to playing Mario Kart now. Troll away.
A patriot must always be ready to defend his country against his government. -edward abbey
Yes, Microsoft does have a good index, that doesn't mean they have a better search algorithm for all terms. A lot of Google's indexed sites consist of link farms; and you are making an assumption in saying that people keep switching their browsers over to Google. I'm willing to bet, that in most cases people leave IE with Live Search. Why? Because generally IE users aren't "power users", they aren't going to search as often as users on Firefox or other third party browsers. Google is a powerful engine no doubt, it's the only engine I use, but my point is Live has a good index, and their technology is comparable to Google's. Microsoft is simply making a mistake in their algorithm as they aren't focusing on power users are much as they are general users. Their search engine usage, I have no doubt would explode (in terms of percentage) if they would focus on people who search the most instead of on all peoples; Google because of it's large market share, knows what people click on which makes Microsoft and Yahoo's jobs much harder. Google seems to focus on its power users, but sadly Google's index is so big, that it consists of a lot of spam. That has improved lately, but I remember getting top search results being link farms not long ago. This is one advantage that Live has, they can have a more agile index that may in time, be more relevant with the correct algorithm.
I was being a bit harsh, I admit. Sorry. I was mostly putting in the context of the "consoles are bling" context of the AC I was replying to. He, I presume, was equating horsepower with quality, I just wanted to bring it back down to where it is supposed to be, by overstating.
The 360 is fun, as is the PS3 (as is the SNES, PS1/2, Atari 2600, etc...), no debating that. The 360 and PS3's 60 bajillion horsepower, though, don't make them any more fun, or less fun, than the Wii. I just get annoyed with people bashing the Wii only based on its power, or lack off. Game selection, though, sadly is a valid gripe.
There are only so many party games one can play, and so many Nintendo sequels one can lust over.
A patriot must always be ready to defend his country against his government. -edward abbey
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.