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Rumors Flying On $20 Billion Microsoft Offer For Yahoo

gadgetopia is one of many who wrote to tell us about the many rumors flying around that Microsoft may be aiming another deal at Yahoo, this time for $20 billion. The story was apparently originally broken by the UK-based site Times Online, and contained lots of details about the supposed deal. Since then, Ross Levinsohn, reported to be part of the new management team, has denied there is any truth to these rumors, leading to questions about where all of this supposed information came from. Yahoo has declined to comment officially.

33 of 112 comments (clear)

  1. Sounds like pump-n-dump by dsanfte · · Score: 5, Insightful

    In this climate I don't see Microsoft buying -anything- for a $20B outlay unless it were the next Google. And Yahoo isn't.

    --
    occultae nullus est respectus musicae - originally a Greek proverb
    1. Re:Sounds like pump-n-dump by Freaky+Spook · · Score: 4, Insightful

      I agree, Yahoo's revenue streams have been dropping and their annual profit's have not been good. MS would have to have a compelling reason to buy Yahoo as the acquisition would probably not give them a competitive advantage over Google.

      With all this talk of Windows in the cloud, and seeing what Microsoft have just done by adding Netflix to the Xbox 360, it appears like they are looking seriously to selling appliances/subscription services. If they could convert even a fraction of their OEM market into hosted services, it could be as lucrative as their Office and Server licensing streams.

    2. Re:Sounds like pump-n-dump by westlake · · Score: 4, Insightful
      I don't see Microsoft buying -anything- for a $20B outlay unless it were the next Google

      Microsoft has money to spend and AAA corporate credit. Exxon-Mobil grade credit. Why shouldn't it be out shopping for bargains?

    3. Re:Sounds like pump-n-dump by cheater512 · · Score: 3, Insightful

      Microsoft doesnt want Yahoo to make money, they want Yahoo for the hits and content.

    4. Re:Sounds like pump-n-dump by Anonymous Coward · · Score: 3, Insightful

      Microsoft doesn't want Yahoo. It wants Yahoo out of the way.

    5. Re:Sounds like pump-n-dump by jcnnghm · · Score: 2, Informative

      They'd definitely buy, this is a great buyers market after all. The trouble is that this story was pretty thoroughly debunked yesterday.

      --
      You don't make the poor richer by making the rich poorer. - Winston Churchill
    6. Re:Sounds like pump-n-dump by morgan_greywolf · · Score: 5, Funny

      Microsoft has more cash than Jesus right now. They have nothing to worry about.

      Not likely. According to this website, in the year 2000 alone, American evangelical Christians raked in $2.66T (yes, that's trillion, no, that's not a typo.) If, according the site, 9% of these 'born-again' Christians tithed -- contributed 10% of their income -- then that should be about $23.94B in 2000 alone. If we count all 9 years between 2000 and 2008, and people are giving to Jesus at the same rates, I figure since 2000, Jesus must've raked in at least $200 billion or so, probably more. Let's be conservative and say the number is closer $300 billion.

      That makes Microsoft's $30 billion or so in current cash (according to Google Finance) seem a bit puny in comparison, huh?

    7. Re:Sounds like pump-n-dump by The_Beige_Volvo · · Score: 2, Interesting

      Such as for the email traffic. Merging hotmail and yahoo would yield approx. 2/3 all webmail traffic routing through MS owned sites. I use webmail clients for all my email these days - could be a pretty powerful piece of market share to have (all users that is - I'm not that obsessive about checking my email). Volvo

    8. Re:Sounds like pump-n-dump by Anonymous Coward · · Score: 3, Funny

      Microsoft doesn't want Google to not have Yahoo. Microsoft wants Google's cute sister.

    9. Re:Sounds like pump-n-dump by f0dder · · Score: 4, Insightful

      Microsoft wants Yahoo patent portfolio.

    10. Re:Sounds like pump-n-dump by Whiternoise · · Score: 2, Funny

      So why can't the church solve the credit crisis =P
      It's not like God needs it?

    11. Re:Sounds like pump-n-dump by Sunshinerat · · Score: 5, Informative

      Correct, Yahoo owns a great deal of Google stock due to the patent dispute around online marketing.

      Why Google is not taking care of this is kind of beyond me.

      --
      Load New Commander (Y/N)?
    12. Re:Sounds like pump-n-dump by fatwilbur · · Score: 5, Informative

      Takeover offers are always, ALWAYS at a large premium to current share prices. This is what entices the shareholders to sell their shares to Microsoft (or whoever).

    13. Re:Sounds like pump-n-dump by morgan_greywolf · · Score: 2, Funny

      Miracles are free, of course. Hell, Jesus' frickin' father supposedly created the flippin' Earth and everything on it in 7 days with $0!!! (Money hadn't been invented yet...) Certainly something as relatively mundane as turning water into wine must be even cheaper than free.

  2. Hmmm. by Adambomb · · Score: 4, Funny

    44 billion to 20 billion.

    Are they trying to actually buy the company or do they just happen to have cameras in place at the Yahoo Shareholders Meetings. Maybe Ballmer just wants to have some footage of some other hypertensive sweaty jumping exec to replace his favorite internet memes.

    --
    Ice Cream has no bones.
  3. Feds won't allow it by QuantumG · · Score: 2, Insightful

    They better get their sale concluded before next year.

    --
    How we know is more important than what we know.
  4. Hostile takeover by PenguinX · · Score: 5, Interesting

    I recall reading an article a while back that Microsoft wasn't able to pursue unless Jerry Yang was ousted.

    Well, from now to then:

    * Ichann was elected to the board
    * Yang received severe criticism from the FUD machine
    * The project management of Yahoo services just went plain crazy (like deleting all of your user information in an 'upgrade')
    * <<insert more stupid crap here>>
    * Yang "stepped down"
    * And now report are that the 44.6 billion dollar deal is a mere 20 billion.

    Say what you will, but this isn't mere chance. Yahoo was one of the companies that helped to make the internet what it is today, and I am very suspicious about most nearly everything on the list above.

    Think what you will, but the only sane one in this deal was Jerry Yang from the start. Microsoft is ruthless - and this shows just how ruthless they are.

    1. Re:Hostile takeover by Ron_Fitzgerald · · Score: 4, Insightful

      Think what you will, but the only sane one in this deal was Jerry Yang from the start. Microsoft is ruthless - and this shows just how ruthless they are.

      How could you blame Microsoft on this? They offered the 44.6B and were turned down by Jerry Yang. Let me repeat that last part....Jerry Yang, the sane one, turned down the deal. His decisions resulted in a lesser valued company and now according to this article Microsoft is making another offer. How this leads to M$=EVIL I don't know.

      --
      ~ Ron Fitzgerald
    2. Re:Hostile takeover by cyberjessy · · Score: 5, Funny

      At his sister's wedding, Michael Corleone tells his then girlfriend Kay Adams the story of how Don Corleone helped his godson Johnny Fontane. Michael explains that his father went to convince Les Halley, the bandleader, to release Johnny from a personal service contract that was holding back Johnny's singing career. Halley refused both the initial offer of $20,000 and the following offer of $10,000, completely missing the significance of that lower offer.

      You know what happened then.

      --
      Life is just a conviction.
    3. Re:Hostile takeover by toby · · Score: 4, Insightful

      Jerry Yang is the reason Yahoo is in the toilet

      Uh, probably not. Over past 12 months Yahoo! is down 60%. But guess what? AMD is down 80%, the Dow is down 40%, Sun is down 85%, MSFT themselves are down 45%, even Apple is down 50%.

      Shall we blame Jerry for 12 months of decline across the board?? If you correct for the market downturn, even just the Dow index, then Yahoo! has barely dipped.

      (Actually the offer was made around 1 Feb, but the dips since then are about the same.)

      --
      you had me at #!
    4. Re:Hostile takeover by Mex · · Score: 2, Insightful

      Think what you will, but the only sane one in this deal was Jerry Yang from the start. Microsoft is ruthless - and this shows just how ruthless they are.

      Man I agree MS is ruthless and I respect Jerry Yang but I just can't blame Microsoft here. They gave Jerry a 44 BILLION offer, and a few weeks later, the company loses almost 25 billion in value directly because of his refusal to sell.

      You mention some mistakes that Yahoo made but how is all that not his fault?

  5. Yahoo is not an end-all solution... by Khopesh · · Score: 5, Interesting

    Yahoo represents the "old web" that Google is beating the pants off of. I wouldn't be surprised if Microsoft/MSN's own resources are as good or better. What Microsoft is trying to do is get a leg up on Google, and purchasing Yahoo just won't do that.

    Microsoft is better off buying something smaller, perhaps InterActiveCorp (IAC), owners of Ask.com and Excite, Evite, and Match.com, but even then it's only accomplishing the same thing. Whatever base they draw from, be it Yahoo, IAC, or MSN itself, they're going to have to do some radical building of new technology to go anywhere.

    They are going to have to invest in actual development firm(s), and buy some up-and-coming companies like 37signals to get some real innovation. However, Google has already been doing this, so MS is getting sloppy seconds, and when you add that to the fact that Microsoft is horrible at the this concept (it's more typical that MS buys a company, takes its most salable product and integrates it into the MS product, then shelves the rest of the company and fires the staff).

    ASP.NET is going to need some serious help gaining AJAX support if it wants to be a contender (or is this Silverlight's aspiration? *shudder* ... Silverlight should contend with Flash. None of the big web2.0 apps use Flash). This absolutely must be key to their web services plan if they want to stay a "leader" in the PL field. Remember when Hotmail went offline because they couldn't successfully port it from BSD to Windows? They still managed to do it eventually (or does it just run though a proxy?) ... porting languages is MUCH harder.

    --
    Use my userscript to add story images to Slashdot. There's no going back.
  6. Why? by Darkness404 · · Score: 4, Insightful

    Honestly, why is MS trying to get Yahoo? Yahoo is everything you would find in a dying company, a loss of public interest and a loss of revenue. Sure, MS could say that they owned a large portion of the search market, but what does that get them? Just about everyone is heading to Google and no doubt MS would manage to mess up Yahoo enough to make their few loyal searchers go elsewhere.

    --
    Taxation is legalized theft, no more, no less.
    1. Re:Why? by justinlee37 · · Score: 4, Funny

      There's something you're overlooking -- neither Youtube.com nor Google Video allow the posting of porn. Yahoo! does, making it one of the few mainstream providers who do. After that you have specialty niche sites like redtube.com and pornhub.com.

      Maybe Microsoft wants to get into cataloging porn? lulz.

    2. Re:Why? by blind+biker · · Score: 3, Informative

      and a loss of revenue

      I bet this is going to get modded down or thoroughly ignored by everyone in this thread, but I like to remind tha Yahoo is profitable to the tune of several hundreds of million USD per quarter. That's not money one would spit on, not in this climate or in any financial climate!

      If that didn't quite sink in: Yahoo puts in the bank several $100.000.000/quarter.

      --
      "The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
    3. Re:Why? by Darkness404 · · Score: 3, Informative

      Profitable as in financial profitability currently, but might I remind you that Yahoo had to lay off 7% of their employees recently. That isn't a mark of a profitable company, or one that will be profitable a year or two into the future.

      --
      Taxation is legalized theft, no more, no less.
    4. Re:Why? by DragonWriter · · Score: 3, Informative

      If that didn't quite sink in: Yahoo puts in the bank several $100.000.000/quarter.

      Which certainly doesn't make it worth even $20,000,000,000, especially if there is no indication that that profitably is increasing.

      Yahoo! is a mature company, not an up-and-coming star. Unless you've got some real synergies to realize by acquiring it, that means that its current profitability has to justify the cost of the acquisition. Even if it was making $1 billion per year in profit and showing signs of doing that indefinitely into the future, that would only be a 5% annual return on a $20 billion investment, which is decent, but not stellar; but its not doing that much, and its not showing a lot of promise of keeping up what profitability it has, either.

    5. Re:Why? by mcpkaaos · · Score: 5, Funny

      After that you have specialty niche sites like redtube.com and pornhub.com.

      This, my friends, is why I love Slashdot. I learn something new every day!

      --
      It goes from God, to Jerry, to me.
  7. Re:What the heck!? by Anonymous Coward · · Score: 2, Funny

    Whoever mods parent Funny gets their privileges revoked.

  8. Go away, leave us alone by onescomplement · · Score: 3, Interesting

    It is Microsoft's board goodbye to Ballmer. He could not exist outside of Microsoft so giving him half of their cash to watch him go down in a self-involved ball of flames is reasonable. The bleeding will stop far short of that. His ego will not let him do something else. After all, he never dated. He married an employee. He is a weak thinker and undisciplined, at best. I keep remembering the desparate "I need a boot loader" email I got from his sorry ass via UUCP. I contributed one out of common grace. And in that he fucked me. At that point I came to realize the poor quality of many people in our business and Ballmer in particular. My butt still hurts. It is time for you to go, Ballmer. You are not interesting, you were never interesting, you are a clown that makes development at Microsoft incredibly difficult if for no other reason than you are an incompetent developer.

    1. Re:Go away, leave us alone by westlake · · Score: 3, Informative
      The bleeding will stop far short of that

      Microsoft isn't bleeding. It saw a modest growth in profits in its first quarter of FY 2009. If holiday sales are poor this season. it is far better positioned than most to weather the storm.

    2. Re:Go away, leave us alone by Mex · · Score: 2, Insightful

      " I keep remembering the desparate "I need a boot loader" email I got from his sorry ass via UUCP. I contributed one out of common grace. And in that he fucked me."

      Wow, care to share that story?

  9. Yahoo is closer to Google than you think by weston · · Score: 2, Insightful

    Yahoo is one of the few companies that's positioned anywhere near a place where they could grab a share of what Google's doing.

    They have some of the web's most trafficked destinations -- I think they're still #1 in traffic even with the rise of the social networking sites. Part of it's mindshare and brand recognition, part of it is the sheer variety the apps in their portal portfolio (flickr, delicious, groups...).

    Microsoft right now is in a position where they are losing control of the web as a platform. Even with some huge advantages leftover from their desktop dominance, they don't seem to be able to do all that great at creating compelling destinations, and what's more, there's an increasing number of destinations that don't require any of their technology at all.

    Frankly, if I were betting on which company were more likely to be relevant in 10-15 years, I'd bet on Yahoo.... assuming it survives investors who've forgotten there's such a thing as a decade, and suits and others who can't get their heads around Yahoo's assets, much less put together the engineering culture and talent the company does need to make its bid for resurgence.

    Be sure that Microsoft understands this. Getting their hands on these web properties could do wonders for their efforts to shoehorn their proprietary tech back into popular usage. They may not be able to execute, but it's quite probably worth even more than a $20 billion shot.

    I don't like the idea so much, because I think their product "management" of IE from 2001-2006 shows that rather than deserving any kind of trust, they're all too happy to leave their products in a state that should constitute criminal theft for sheer number of hours of productivity it stole from web developers, if they can get away with it, which, even in the current environment where their grip is looser than it used to be, they more or less can. But it's a very real possibility if MS acquires Yahoo.