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Microsoft Offered $40 a Share For Yahoo
fistfullast33l writes "Bloomberg is reporting that a recently unsealed court case by shareholders against Yahoo reveals that Microsoft offered $40 a share for the Internet search company in January 2007 and Yahoo turned it down. We've extensively discussed Microsoft's bid for Yahoo earlier this year for $33 a share, which was rebuffed. Investor Carl Icahn has launched a proxy fight against Yahoo over the spurning of the Microsoft deal." CWmike notes Computerworld's coverage of the revelations: "The complaint places much of the blame on [Yahoo CEO Jerry] Yang, describing him as someone with a 'well-known' antipathy toward Microsoft who acted out of a personal interest to keep Yahoo independent. Something wrong with that? Oh, yeah... public company."
Who hasn't already written off both of these companies? Anyone holding either of them for the long term simply does not grok where the internet and personal computing are going, or how desperately inept these two companies have become due to their size and age.
Microsoft's asset is an OS that people are still locked into, but becoming violently sick of. Yahoo's asset is a rapidly diminishing brand and user base. Combine them and you just get an even faster and more epic fail. This is the next AOL/TW.
The guys who will eat their lunch are the Googles and Apples of the world, who are both innovating and listening to their customers. Size alone won't help you compete with that, you need to get back to innovating. I think people are being way too slow to jump the sinking ship here - if I were a YHOO shareholder, I'd have dumped as soon as the offer hit the table and the stock hit $30. Why on earth would you hold out for $31?
And isn't that what it's all about, folks?
SJW: Someone who has run out of real oppression, and has to fake it.
If he had a 'well known' antipathy for Microsoft then it was known when he was hired as CEO. Presumably the board of directors considered it a good thing or they would have hired someone else. Investment is risk. If you can't accept that risk don't invest.
Fair warning: Rant
Public companies are now being run by the shareholders that take out payday loans, refinance their houses so much they owe money when they sell, cannot build traditional savings since all their income is treated as disposable. Basically the get rich generation with no long term goals other than their next big "fix".
Why does it surprise anybody that the driving force behind these companies is to sell out no matter what the cost to the business, the employees, or even the customers?
) Human Kind Vs Human Creation
) It'd be interesting to see how many humans would survive to serve us.
It's about taking your January share price of $19 and doubling it into $40 over the course of a few short months, not to mention your shareholders, and perhaps most importantly vested employees. Sure, Jerry has a lot of cash with or without Microsoft but employees with shares could literally double their investments overnight with this deal. I'm sure theres a good bit of internal angst.
People used to speak of Microsoft Millionaires, this could have made a few Yahoo Millionaires. Chances are Ichann will get a shot to do what Jerry should have done.
Well, since you asked why:
Maybe not too far off the mark...
Cheers,
"What in the name of Fats Waller is that?"
"A four-foot prune."
.... He made a long-term decision instead of thinking about short-term profits. He's being sued for looking beyond the next few quarters.
If you think Yahoo can't turn it around, then yeah. He fucked up big-time. But if you think (as I'm sure he does) that Yahoo can be an innovative company that can step in to fill the gap as Microsoft declines, then he did the right thing. Hardly matters either way though. (Some profit now > Lots of profit over time) in the eyes of wall street.
Microsoft who acted out of a personal interest to keep Yahoo independent. Something wrong with that? Oh, yeah... public company.
There's nothing wrong with acting in personal interests if there's a reasonable argument that it coincides with shareholder interests. And in this case, there certainly is.
Look at Google's value. Which companies are in any position at all to grab any significant share of what they're doing in the market? It's a short list. Yahoo's on it.
If you were holding onto a significant chunk of one of those companies, would you want to (a) sell it now for a quick but small profit or (b) figure out what changes you need to make in the company to have it better compete with Google and acquire value on that level?
Some shareholders might choose a. But b is certainly reasonable.
Frankly, so is the Microsoft antipathy. People like to talk as if the haters are just irrational folks who got up on the anti-MS side of the bed. Nevermind that there's a significant real technical and business history that would make any sane and competent person wary of them.
The web as a platform is open and expanding. Windows as a platform is stagnating and closed. Which do you want to be invested in for the next 10 years?
Tweet, tweet.
Yahoo would not have survived to 2009 if all it's employees quit. That's why Yang made sure $2 billion of the purchase price would go to employee severance plans. There's probably been some disruption anyway. Wouldn't you have a resume on the street with all of the FUD and BS being flung? The severance plans gave employees a reason to stick around and be fired by M$, or just keep on working if the deal fell through.
Painting this to be a personal thing by Yang is nuts. Yahoo and M$ were getting along famously until M$ decided to launch a hostile takeover.
I hope everyone realises that Carl Icahn isn't a long-term shareholder upset with how the company is being run. He thought he could run it better when Jerry Yang rebuffed MS, and AS A RESULT, bought a significant number of shares. In other words, he bought into the company for the sole purpose of getting Yang tossed out.
In the world of billionaires, not always the most friendly of folks, Icahn is about as pleasant as a rabid shark with PMS. If he gets his way, he'll install a new board, sell Yahoo to MS at $40, help gut the company, and then leave with a few more dollars in his pockets. Yahoo staff will be out of work, the search engine market will become a battle of two titans, and basically everyone will lose except for Carl and his board.
"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban
It's like a fifty year old woman that dresses like a teenager. It's funny, yeah, but... a part of you feels so damn sad for her.
"The fight for freedom has only just begun." - Geert Wilders
Honestly I don't see people getting sick of Windows, there is no alternative on low end machines that people will flock to because there is no software for them. It is human nature to complain and the biggest target is Microsoft. I use Windows and OS X at home. I am strictly restricted to XP or NT at work on PCs. It doesn't get in my way, it doesn't do anything wrong. If anything the same problem I have with OS X I have with Windows; OS X handles it better; and that is bad software. Hell even my iMac wasn't immune to bad video drivers.
Of course the real monster is Office. I know Mac fans who did not move to Intel versions until Office was native. It is more important long term than the OS under it is.
Apple to me seems to be moving away from the desktop trying to redirect us to the living room; one place I refuse to allow a PC to enter (apple or ms or linux)
I know its accepted to ridicule Ms and speak of imminent doom and gloom but its been the same for ages here. I remember day one here for me and it was always Microsoft is going to die. There are just too many smart people there to write them off.
Now Yahoo, yuck. I can't even stand going to their clutter of a page. If anything they probably are the loser here, they need someone to use them because the public isn't
* Winners compare their achievements to their goals, losers compare theirs to that of others.
If it came as a surprise to anyone that Yahoo's founders and high-level managers have an antipathy towards MSFT then they must've been living in a cave, or are total morons. From Yahoo's inception there has been little love for MSFT--if they ever cooperated it was grudgingly, in their own self interest. There is a cultural gap bigger than the Grand Canyon there.
It doesn't help that there is a giant impedance mismatch when it comes to technology and infrastructure. A Netcraft search is telling: Yahoo is almost universally FreeBSD, and what is left is Linux. Yahoo has ZERO Microsoft in their data centres. MSFT, of course, is almost universally Windows Server.
Remember what happened to Hotmail when MSFT bought it? They ripped out all the FreeBSD over the first couple of years, subjecting users to regular periodic disruptions. "To hell with users, we eat our own dogfood dammit!". Not only that, I'd say most of the hotmail employees were abandoned too--wandered away or pushed out.
Hotmail still exists today as a cornerstone to MSFT's "Live" initiative and is probably the biggest webmail provider out there so it wasn't all bad of course, but there is a difference here: MSFT had no webmail service of note before buying Hotmail. In the case of Yahoo, what have they got that MSFT doesn't have? They both have an IM platform and client, a search portal, webmail, advertising services, etc...except NONE of Yahoo's runs on MSFT technology! Within 2 years, the yahoo portal will be gone, the IM client will be gone, the webmail will be gone, everything will be gone. Yahoo is coveted for its customer base and advertising presence. It'll live for awhile as "MS Yahoo! Live" for awhile then it'll be gone. It's employees will be gone. It'll be a footnote in history.
It doesn't matter all that much to me; I have no great love for either company and think they both offer mediocre service and crappy software. However, if Yahoo's directors and Yang himself care about the company and really believe it would grow, they've made the right decision to resist a buyout by MSFT. You'd have to be a fool to think there'd be anything of substance left of Yahoo after MSFT slayed them and feasted upon the corpse. Some of us would cheer to see that, but I'm betting the founder, directors and loyal employees would understandably NOT want to see that.
Anyways, who is to say that Yahoo shareholders would be better off with the MSFT shares tossed their way in a buyout? Right now, I'd say NEITHER stock is going anywhere exiting in the next 2 years. By the way, if you just go by the charts, Yahoo did the right thing; in the past year, YHOO has lost just over 9 percent, but MSFT has lost over 10 percent. If you extend where things have been out to 2010, if you think YHOO is heading towards $11, then MSFT will probably be $10.50.
It seems to me that many of you do not have your fingers on the pulse of the day to day users in a corporate enviornment. That is why you fail to see why companies use, and will continue to use, Windows as a base OS for their client systems.
It's true, I've been out of the cube farm for about a year and a half. And I think it's true that there, Windows still has significant penetration.
But consider the following:
(1) Even in the corporate world, users are ready to get off the upgrade treadmill at Windows XP. Precisely for the reason you mention "It works just fine for what these users need to do." Nobody needs the next version of Windows, nobody really cares, and Vista really isn't that great.
(2) There exist increasingly capable alternatives that also "work just fine for what these users need to do."
(3) More and more work is done on web apps.
It does not 'break' as often as you would like it to, or believe it to break
I'm sure that somewhere, there's a place where seasoned Windows sysadmins correctly administer Windows boxes built from well-selected reliable hardware so well that your statement is true. However, it certainly has not been the case in the business and home environments I've been a part of. And "as often as I'd like it to?" I'd be a happier man if it broke under my use not at all.
But even assuming your statement is truer than I think it is -- the other three points are what I really mean by "Windows is stagnating." Microsoft's licensing revenues certainly aren't going away overnight. But right now, in the main, Windows is pretty much headed to the ignominy of just another commodity.
Tweet, tweet.
Really?
Shareholders give companies money to expand, grow, and operate. More over they do it during times when the company cannot raise money through bank or debt issuances. In fact the restrictions a company takes on when taking out a loan are often much more onerous then the messiest of shareholder revolts.
Have you ever tried to start up a business? Do it, and try to get a loan before you've even set up shop. You'll be laughed out of almost every bank you go to, and if you do get a loan you'll probably be paying 500 basis points (5%) over prime. It's much less onerous to give up some control of your company to outside shareholders for their cash. At least then you don't have the exorbitant interest charges (and other potential restrictions) that come with taking out a loan.
Now specifically about Yahoo, Yahoo did not have to offer its stock publicly. If Jerry Yang wanted to run Yahoo like his personal dominion he didn't have to sell 2.6 million shares to the public in 1996 (plus the countless other secondary offerings Yahoo made). He could have retained control, but he chose take the shareholder's money and the many headaches that came along with it.
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
Of course they are, and they continue to innovate. The iPhone interface isn't an innovation? And are you fucking kidding me about the so-called "Best Page In The Universe"? Anyone who could have such a shitty-looking website doesn't have the least goddamned clue about design, or its importance, especially when it comes to human interface. Microsoft and Dell have also introduced dramatic innovations, and I'm fully aware that that statement is heresy on Slashdot, but give credit where it is due (and I'm saying this as a Mac user). The problem is that the word doesn't mean what most people think it means (apologies to Inigo Montoya). From Dictionary.com:
innovate : to introduce something new; make changes in anything established.
People usually mistakenly conflate "innovate" with "invent", and to say that any of these three companies has not innovated would be wrong. Apple's innovations were to bring geeky technology to the masses in a way that made sense and were useful (GUI, CD-ROM drive, USB, Unix); Microsoft of course were the ones who spread computing far, wide, and deep; Dell's innovations were in manufacturing and sales, and they can be fairly credited with commoditizing the personal computer. In my opinion Michael Dell has done more to drive down the cost of computers, thereby bringing heretofore artificially expensive gadgets into the mainstream, than anyone else. Like him or loathe him, his place in computing history is secure.
People seem to forget what a disaster HP/Compaq was, and what a money sink-hole AOL/TW was.
Yahoo has been known to do most of their web development on open platforms and languages. Microsoft's web services often come in third place. By purchasing Yahoo, you either allow Yahoo to remain Yahoo and abandon existing Microsoft services (never going to happen), or you force Yahoo's users into Microsoft services they didn't want (wasting what you just spent billions on), or you basically keep the two companies as seperate companies.
These two companies were not meant to be merged.
http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
Well, if Jerry Yang and Yahoo really had a vision and really cared so much about achieving it, they wouldn't have sold their shares to a bunch of "capricious, money-grubbing, shareholders." Yahoo's decision to be a public traded company (a 19th Century development, not a 17th Century one), is one they made on their own because they need the money the equity markets provided to reach the status they hold now.
In fact, maybe Yahoo's original (pre-IPO) shareholders including Mr. Yang are the real greedy ones. After all, they obviously cared nothing about the company's long term prospects since they exposed it to the "horrors" of the publicly traded securities markets. It's clear they only cared about "cashing in" and monetizing the value of their Yahoo stock, Yahoo's actual company "be damned."
Just out of curiosity, what exactly to you propose replace the corporate entity in modern day business? Should we nationalize all major industry ala the U.K. in the 1960s and 70s and have the government be the only shareholder? Should we ban the concept of limited liability all together and only allow general partnerships (i.e., make each investor individually liable for the company's debts and obligations)?
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...