Slashdot Mirror
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."
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.
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.
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
Yo dawg, I herd you like search, so I put this search engine in a search engine.
"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
How does this affect Yahoo's Search API, BOSS?
Remember that's $50 million a year, plus 9£% of all revenue from their own sites for JUST search, plus they free up 400 peoples wages. Also Yahoo have still got Flickr, Delicious, Yahoo Mail and others to rely on. There's also a number of get-out clauses too so Yahoo can just walk away, Microsoft have come out on top of this deal but Yahoo it's not all bad for 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.
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?
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.
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
If you knew anything about the business, you wouldn't say that.
Microsoft's search strategy is long-term. Giving up a sizable profit for now (I strongly doubt that they're losing money on it, but the numbers tell you their overhead pretty clearly) gives them:
-Yahoo's search engineers, who will move to Microsoft
-A company with experience in ad sales and portal development
-Over twice the market share
This is a long-term run at Google, not something to keep Slashbots entertained for the next week or so.
"You can either have software quality or you can have pointer arithmetic, but you cannot have both at the same time."
Oh, and keep in mind that this lets them tie in and monetize Flickr (huge), Del.icio.us (also huge), and Yahoo's other services.
"You can either have software quality or you can have pointer arithmetic, but you cannot have both at the same time."
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