Yahoo Spent $79 Million To Fend Off Microsoft

Apologetics Blog writes "Getting bought by one of the biggest companies in the world turns out to be a rather costly thing. Last year when Microsoft was in talks with Yahoo regarding a possible buy-out, in a report recently filed with the Securities and Exchange Commission, Yahoo announced that it cost them $79 million to fight off Microsoft. Most of that money was spent on advisors who examined Microsoft's proposals, and the way it would impact on Yahoo's search agreement with Google. The deal fizzled out when federal antitrust regulators said it would challenge any deal made between the two companies."

Comments

Re:advisors

[nacturation]

If my math is correct, that's about 54 man-years at $500/hour for 8 hours a day, 365 days a year. Wow.

$79 million not terrible.

[Xest]

When our company took over a company worth £43mill it cost us £1mill in legal fees etc. etc. to get everything looked over and sorted out.

I think for something of Yahoo's worth, $79 million isn't massively unrealistic. I'd say it's not unreasonable either, it is to most people including me, but in the world of business I'd say it's probably not.

Still Yahoo, perhaps the most business plan challenged IT company in the last few years, turning down Micrososft, going for Google, getting told to f off by Google because of the potential for monopoly problems and then running back to Microsoft and being told to f off by Micrososft too.

Ballmer is probably laughing his arse off, they offered over the odds to pay for the company but if they had paid that much and then seen the resulting decline of it's worth due to a number of factors from Google to the financial crisis then they'd have wasted literally billions.

Re:So either way MS gains ground...

[nschubach]

I don't know if I'd call it genius or underhanded (people jumped all over Sony for doing something similar with that one import company...) but use the legal system and costs associated with it to drive your competition out of business.

Re:fiduciary responsibility?

[rbanffy]

Actually, I sincerely doubt the MS offer was done in good faith.

Had the MS bid gone forward, MS would have access to a whole lot of Y! internal data, research, plans and so on. If they later retired their offer as they considered the companies were never really a good match, MS would have walked away with a lot of inside knowledge about its biggest competitor in the search market and Yahoo would have gotten nothing but a lot of FUD and a probably mortal wound.

This would be a lot less expensive than buying Yahoo! would be in the first place and Yahoo would be every bit as gone as #2 as if they were bought.

This kind of maneuver is so typical of Microsoft I cannot imagine any other explanation.

I'm in the wrong line of work

[Locke2005]

If it costs you over $70 million to figure out how being acquired by Microsoft would effect your agreements with Google, shouldn't you begin to suspect your agreements with Google are too fucking complicated? Especially when a simple Google search would tell you how Microsoft feels about Google