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Yahoo Filing Reveals Details of Microsoft Deal
CWmike writes "Microsoft will pay Yahoo $50 million a year for three years and will hire at least 400 Yahoo employees as part of the companies' recent search agreement, according to a filing with the US Securities and Exchange Commission. Yahoo's form 8-K, which appeared online on Tuesday, reveals a few additional details about the agreement. The deal, announced last week, will mean that Microsoft's Bing search engine will power Yahoo's search site and Yahoo will sell premium search ad services for both companies. Five years into the 10-year agreement, Microsoft can opt out of the exclusive engagement for Yahoo's ad sales services, according to the filing. If it does, Yahoo will then keep 93 percent of the search revenue generated on sites owned and operated by Yahoo, instead of 88 percent. But Yahoo can also decide to remain the exclusive premium ad sales provider, in which case it will settle for an 83 percent share of the revenue. If Microsoft doesn't end the exclusive arrangement, Yahoo's share of the revenue will go up to 90 percent."
but if they mess up with my email, I'll cut the pay subscription right now.
This deal assumes that people will use anything other than Google. There is no difference between zero dollars times 93 percent and zero dollars times 83 percent.
Conscience is the inner voice which warns us that someone may be looking.
Yahoo search is dead - Long live Yahoo search!
I still think I'd be pretty peeved if I owned Yahoo stock over the fact that they rejected Microsoft's buy-out offers. The last one that Microsoft made had Yahoo valued at $31/share. It's now trading at around $14.50. Given the fact that Google dominates the search engine market and Yahoo hasn't innovated anything in years does anybody really think it's likely that Yahoo will ever see a $31 share price again? They've entered an inexorable decline that will eventually end in them being bought out by someone (probably Microsoft) for a heck of a lot less than $31/share.
I'm kind of surprised that the board didn't sued for breaching their fiduciary responsibility when they rejected that offer. That was one heck of a deal for the shareholders and I'm extremely baffled that it was rejected.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
It is staggering to look at the money and effort Microsoft has put into attacking Google - and what a complete and utter failure it has been.
150 million in advertising, paid for media stories, and astroturfing "I'm a long time Google user and by golly I'm switching to Bing!" posts on web discussion boards. Plus silly marketshare inflating games like using Bing search links pretending to be news items on MSN pages.
All that and all Microsoft managed to do was get their search engine slightly higher than Yahoo's distant second place marketshare for a day or so and then plummeted right back down to last place around 8 percent.
Even worse is the fact that Microsoft's latest rebranding of their search product is at a lower marketshare than it was a year ago without the massive ad and PR campaign.
I was wondering if Microsoft was going to just get all of Yahoo's search data and it was stated that Microsoft gets Yahoo's search technology along with 400 of their engineers. So just how useful is the opt-out feature when you've handed your competition all your data, technology, and engineers and you've not kept the technology up for 5 years? Answer: their opt-out clause is only good for fooling the investors and board into thinking there's a way out.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
"Microsoft will pay Yahoo $50 million a year for three years and will hire at least 400 Yahoo employees as part of the companies' recent search agreement, according to a filing with the US Securities and Exchange Commission.
50 mil and those 400 employees' salaries are pocket money for Microsoft. They have paid a great many times more than that in various out-of-court settlements over the years.
Incidentally, another comment that springs to mind is that Yahoo must be quite desperate: $50M is nothing for a large intarweb company these days.
Microsoft and Yahoo joining efforts will probably produce nothing good at all though: they both have mediocre search businesses, and they'll end up with a mediocre shared search business. Nothing for the big G to worry about I reckon.
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
It seems like it's heavily tilted in Yahoo's favor. MS seems to be grasping at straws to become relevant in search, and I don't think this did anything but enrich Yahoo. Google might keep a wary eye on them, but I doubt they are worried at all.
You know the old acronym, BING: But... It's Not Google!
Quoting: "Microsoft will pay Yahoo $50 million a year for three years..."
How does that fit? Yahoo rejected an offer of $44.6 Billion, but accepts "$50 million a year"?
I'm guessing that if they had just Googled it, they would have found information that indicates the idea is foolish. I'm not saying I know how the idea is foolish, I'm only saying that it seems to me that something is wrong somewhere.
i have just abandoned my yahoo email account and will let spammers fill the inbox & spambox until yahoo either deletes the account or needs the disk space and clears out the spam themselves because i no longer give a damn about yahoo anymore...
Politics is Treachery, Religion is Brainwashing
How does this affect Yahoo's Search API, BOSS?
Yahoo is dead - Long live Yahoo!
Yahoo! shares were between $30-$40 for the last few years before the collapse. Thing is, Yahoo! did not innovate and keep market-share according to this, but they had a slow decline as people turned to Google and others more and more because of better services.
This effectively means that they had an over inflated stock value at the time (also called a bubble). When talks with Microsoft began, a lot of actual value assessments were made, but because of the merge possibility the prices stayed hyped. Then they suddenly went down to reasonable values after the merge talks were canceled.
This is a normal market healing mechanism. People who are into stocks should know this, make some sane assessments on the base of performance, evaluate risks and then make sane purchase decisions.
In reality, everyone in that crowd just wants to make a quick buck without any economic reason what so ever. This is why I have zero pity for Yahoo! stock holders.
All of what you just said sounds like another good reason why Yahoo should have accepted Microsoft's inflated offer and run with the cash while they had a chance......
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
This is why having shareholders can suck for a business's bosses. If you want to do what's best for them, then the stock price pretty much steers your business decisions, regardless of what you might want for your business to do. I imagine that's why MS made the huge offer in the first place - even if the terms are sucky, your shareholders are going to want you to accept if it doubles their investment.
No kidding!!! What do you say at this point?
MS Search 8 percent
Yahoo Search 11 percent
Does that add up to 25 percent retard?
This is why having shareholders can suck for a business's bosses.
I hate to break it to you but the CEO isn't the "boss" unless he owns 50.1% of the outstanding shares.
your shareholders are going to want you to accept if it doubles their investment.
Well duh! And this is a problem, because???? Are you telling me that if you owned a business and someone came along and offered you twice what it was worth you wouldn't accept their offer? Remember to take into consideration the fact that your business is facing both a much more nimble and innovative competitor (Google) and a 500 pound gorilla (Microsoft). Remember to account for the fact that your business has done nothing but decline over the last ten years. Taking all of that into consideration you'd really reject an offer like that?
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
If you want to do what's best for them, then the stock price pretty much steers your business decisions, regardless of what you might want for your business to do.
You're ignoring dividends - that's a way to get a return on your stock investment without constantly "flipping" your stocks. Unfortunately, it seems that most shareholders these days are more interested in short-term results and flipping their stocks, leading too many companies to make decisions based on short-term results and ignoring the issues those decisions create with long-term company stability and results.
Putting the "anal" back into "analyst"...
Doesn't Yahoo employ several key members of the FreeBSD project to work on it as much of their infrastructure (at least at one time) was powered by FreeBSD?
"The problem with socialism is eventually you run out of other people's money" - Thatcher.
You WILL pay his fee.
Microsoft always makes deals that LOOK like great deals for their partners. And then there's always a term in the details for some unlikely contingency that miraculously comes true that allows them to eat their partner. It would be interesting if it weren't the same show over and over.
Help stamp out iliturcy.
You don't have to have 50.1% of the outstanding shares to make significant decisions regarding the company's future. That just gives you the potential to act unilaterally, which no sane individual is going to do anyway.
Your second remark is exactly my point. When you have hungry stakeholders looking for a good ROI there's no concept of turning down a lucrative offer to keep your business identity, or to ensure your tightly-knit board calls the shots, or to preserve Casual Thursdays, or because the offer mandates replacing 90% of your staff with cheap overseas labour. You've got to go where the money is.
No kidding!!! What do you say at this point?
Microsoft will pay Yahoo $50 million a year for three years...
That's about what Marisa Mayer spends on dry cleaning. Okay, not really, but that's a rounding error for Google.
Microsoft and Yahoo teaming up on search reminds me of a fraternity rush when the dorks end up clinging together for survival in the corner. I just can't see anything compelling coming out of this union. Microsoft's online services are clumsy and unattractive, they're always trying to tie it to their desktop OS. And Yahoo...meh. What services do they have that Google doesn't do better? Google has Voice and Labs, are always coming out with something new, pushing into new product areas. Yahoo barely keeps up with what they have.
This is the strategic partnership to nowhere.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Umm, has Yahoo ever paid a dividend? Didn't think so......
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Your second remark is exactly my point. When you have hungry stakeholders looking for a good ROI there's no concept of turning down a lucrative offer to keep your business identity, or to ensure your tightly-knit board calls the shots, or to preserve Casual Thursdays, or because the offer mandates replacing 90% of your staff with cheap overseas labour. You've got to go where the money is.
That's exactly how it's supposed to work. Most investors did not put their money into Yahoo with such lofty ambitions as you describe. Tell me, when you put money into your 401(k) are you doing it so Yahoo can retain it's "business identity" or are you doing it so you can retire one day? Yahoo's "business identity" is toast anyway -- they don't have the cash to compete with Microsoft or the innovation to beat Google.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Sure if your mentality is that you can only be number one once and will be destined for failure after you rein is over.
Peope used think that about games consoles but nintendo bucked the trend when against two big opponents. There is no reason Yahoo can't do the same if they take research seriously.
As Microsoft's search engine share sunk to its lowest level yet, with approximately 8 to 9 queries total worldwide, Steve Ballmer has hooked up with Yahoo! and its 21 queries worldwide.
The press conference was held on a street corner in San Francisco as Mr Ballmer and Jerry Yang sat with their hats on the sidewalk and playing harmonicas with a "WILL WEBSEARCH FOR FOOD" sign behind them.
"Understandably, we expect less activity in the Great Recession," said Mr Ballmer. "Nobody knows what value assets should be ⦠say, you aren't finished with that cigarette, are you?"
Press attendees included a schizophrenic local resident in a tinfoil hat ("to keep Google out"), two teenagers drunk on malt liquor and a policeman keeping an eye on things from a distance. The teenagers taunted, confused and upset Mr Ballmer by suggesting he attempt to locate his own posterior.
"My new search technology is unstoppable! Just look at this netbook!" shouted Mr Ballmer, waving an Etch-a-Sketch in a threatening manner. "IT'S MAUVE! IT RUNS WINDOWS SEVEN! LINUX PUT A RADIO IN MY HEAD! I'LL SHOW 'EM ALL! BASTARDS!"
"Some love stories are eternal," said Mr Yang. "Romeo and Juliet. Heloise and Abelard. Leopold and Loeb. Microsoft and Yahoo."
http://rocknerd.co.uk
I hate fucking Google, I won't use them. Their adwords pricing is extortion (you cannot fix a price over a fixed period).
One thing that Microsoft have done that is very savy is that you with the latest version of Internet Explorer you can pick specialised search providers such as: The New York Times, BBC etc. This is a really clever move on their part.
I am mainly interested in Current Affairs, so if I can target my searches towards a specialised provider, I will have much better results. That is surely a direction that is going to flourish and undercut the dominance of Google.
Google is bollocks as far as I am concerned.
I always cringe when MS and Yahoo do anything together. If Yahoo was smart, they would push Zimbra hard at the Exchange crowd. At least there is money to be made.
Yes, it's a better deal than I said. However, there are others who are skeptical. Someone posted a link to an opinion by Fake Steve Jobs: R.I.P., Yahoo.
Will be interesting to see how soon yahoo messenger stops working for Linux and OS/x.
It's going to happen just how quickly MS kills them, will see.
It's true that Microsoft offered $31/share and Yahoo is now ~$14. However, keep in mind a lot of Yahoo's decline has to do with the economy and market as a whole. The S&P 500 is down 30% since the time of Microsoft's offer. Assuming they took the offer and invested elsewhere, Yahoo investors would have had around $20/share right now. That's still a lot better than $14, but certainly not as good as $31.