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Why Yahoo Turned Microsoft Down

Posted by kdawson on from the you-scratch-my-back dept.

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."

9 of 161 comments (clear)

  1. Jerry has an irrational fear by Nimey · · Score: 5, Funny

    of chairs.

    --
    Hail Eris, full of mischief...

    E pluribus sanguinem
  2. Time will tell... by HerculesMO · · Score: 5, Interesting

    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.
    1. Re:Time will tell... by vertinox · · Score: 5, Insightful

      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)
    2. Re:Time will tell... by lilfields · · Score: 5, Interesting

      Why would Microsoft axe Yahoo? They would just put them on the same search index and advertising algorithm. Live actually has a good index...I think Microsoft could wait 2 years and they could get Yahoo at half the price, especially the way Jerry Yang is driving it into the ground. He makes Terry Semel look like a genius for crying outloud; Yang needs to let go, he's getting a steal. Microsoft, is good with money pits, they turned the Xbox franchise into a profitable entity and forced Sony to take massive losses in their PS3.

    3. Re:Time will tell... by MightyMartian · · Score: 5, Insightful

      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.
    4. Re:Time will tell... by Omestes · · Score: 5, Insightful

      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
  3. Re:good luck yang by elrous0 · · Score: 5, Funny

    The opening of his speech will be "Okay, so I lost you all of a shitload of money. But the important thing is, we stuck it to the big, bad Microsoft! WHO'S WITH ME?" There is more to the speech, but it's unlikely he'll be able to speak coherently after that, what with his lungs filling with blood.

    --
    SJW: Someone who has run out of real oppression, and has to fake it.
  4. Re:Google and Yahoo should team up by cwgmpls · · Score: 5, Insightful

    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.

  5. The Wii's big - but stingy - audience by westlake · · Score: 5, Interesting
    Nintendo slipped in. The Wii already has more marketshare than the Xbox and is profitable.

    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]