MS Buying Yahoo? Bad Idea, Even At a Discount

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MS Buying Yahoo? Bad Idea, Even At a Discount

Posted by timothy on Friday October 7, 2011 @05:50PM from the bing-bing-bing-we-have-a-winner dept.

jfruhlinger writes "Nearly four years ago, Microsoft tried to buy Yahoo, but eventually withdrew the offer in the face of resistance from Yahoo's leadership. This week rumors resurfaced that Microsoft was once again bidding on the struggling Internet pioneer, this time for significantly less money. But even at a discount, it might be a pretty bad idea for Microsoft to get involved in the unfocused, money-losing Yahoo."

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Leave it for Alibaba by mark_elf · 2011-10-07 17:59 · Score: 3, Interesting

Jack Ma wants to regain control of Alibaba http://money.cnn.com/2011/10/01/technology/alibaba_yahoo/index.htm/, makes more sense for them than for Microsoft. I wonder if the MS interest is just to drive the price up for some reason.
Who, exactly, is losing money? by JakiChan · 2011-10-07 18:01 · Score: 4, Informative

Say what you want about Yahoo! but it is not "money-losing". Yahoo! is profitable. Yes, top-line growth has been a problem but management of the bottom line has driven profits UP not DOWN. Bing may be losing money hand over fist but Yahoo! is still bringing in the cash.
I bet the folks who love to keep beating on Yahoo! also kick puppies for fun...

--
"Where quality is like a dead stinking rat - you just can't miss it."
1. Re:Who, exactly, is losing money? by Anonymous Coward · 2011-10-07 18:33 · Score: 3, Insightful
  
  MICROSOFT is losing money fast
  You mean the company that made $23 billion last year? Nearly as much in profit as Google's revenue and 3x their profits. 65% more profits than Apple. That company? That company is losing money fast? Really?
  Really?
  No seriously.. really?
2. Re:Who, exactly, is losing money? by Hadlock · 2011-10-07 21:16 · Score: 5, Interesting
  
  They're a revenue stream for some hedge fund or conglomerate, sure. You can bank on them having level revenue for the next 2-5 years, but there's no growth left there. R&D got the axe years ago, and they haven't developed a noteworthy product or championed a cause that anyone can remember since free email (yahoo mail) and yahoo maps... which are third rate backwaters these days. All that is left is a bunch of degree mill MBAs looking to pump up the company to sell it to investors... same as AOL. The trade name doesn't hold the glamour or instill the brand pride it did in the first half of the 00's.
  
  Sure, profits are UP, but at what cost? Employee morale must be at an all time low, they are hemorrhaging long time employees, the board of directors is directionless and they have had no CEO with a sense of direction since they kicked out Jerry Yang. The soul of the company is dead and the product they sell is a commodity; no one has faith that you could reasonably improve the shareholder value by 20% in five years.
  
  They could bring back Jerry Yang, but that would involve scrubbing the entire board of directors to get him back; not likely. Yahoo is circling the drain, investors are looking for a way to cash out without alarming anyone, but nobody is buying, which only drives their stock price lower. So long, Yahoo, and thanks for all the free email!
  
  --
  moox. for a new generation.
3. Re:Who, exactly, is losing money? by Dunbal · 2011-10-07 22:36 · Score: 3, Funny
  
  I bet the folks who love to keep beating on Yahoo! also kick puppies for fun...
  Hey!
  
  --
  Seven puppies were harmed during the making of this post.
I seriously doubt it. by blackicye · 2011-10-07 18:02 · Score: 3, Interesting

It was a bad idea then, it's no better of an idea now (and some would argue worse.)
Why not wait another year or two and buy Yahoo for an even bigger discount, something closer to free.
Are we talking about the same Microsoft? by Required+Snark · 2011-10-07 18:09 · Score: 4, Interesting

"a pretty bad idea for Microsoft to get involved in the unfocused, money-losing Yahoo."
Am I wrong, or is the phrase "unfocused, money-losing" pretty much the definition of the stuff that Microsoft is rolling out these days? SilverLight, Bing, Zune, .NET languages, ...

--
Why is Snark Required?
1. Re:Are we talking about the same Microsoft? by Alex+Belits · 2011-10-07 19:23 · Score: 3, Informative
  
  I typically make applications/daemons on a POSIX platform, but I always prototype in .net
  No, you don't.
  
  --
  Contrary to the popular belief, there indeed is no God.
2. Re:Are we talking about the same Microsoft? by Locutus · 2011-10-08 03:57 · Score: 3, Insightful
  
  that "focus" on languages has always been more about locking developers( and therefore software ) to their Windows platform. Silverlight is about limiting or stopping Adobe Flash because not only did Adobe become cross platform but Flash is a development platform which works across all platforms. This kind of thing is a threat to Microsoft's revenue stream( Windows ). So that's why Silverlight was created. As for MS .NET, that was in response to Java which is cross platform and the same rules apply regarding protection of the revenue stream. The kind of protectionism I talk about is evident in most all of the exposed emails from court cases which made public internal Microsoft email and depositions.
  
  Because Microsoft's entire revenue base is tied to the Windows OS and it is a substantial revenue stream, protecting it at all costs( in the billions annually ) is business as usual and has worked for them for 20 something years. The funny thing is, they never had to compete in the portable space( disconnected mains power ) much and it never was much of a threat to the desktop or server. Apple changed that with the iPod/iTunes and how it showed great usability outside of the Microsoft ecosystem. It also expanded the Apple brand and sold desktops. Along came the iPhone and the Vista crapware and people really started taking non-Microsoft platforms seriously. GNU/Linux on the server side was doing quite well too. Zune was an attempt to curb the iPod craze but nobody fell for it since the Apple brand meant more than the Microsoft brand and you were not cool if you were Zuned. BING is Microsoft's attempt to limit Google's growth and brand and it too is failing and costing Microsoft billions. long story.
  
  LoB
  
  --
  "Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
Yahoo is just a website by satuon · 2011-10-07 18:37 · Score: 4, Interesting

I think of google as a search engine that happens to have a web page which you can use if you don't have a search bar in your browser. But when I go to yahoo's page, it looks more like a news site than a search portal. To me it looks like an ordinary website, not much different from cnn.com.
1. Re:Yahoo is just a website by msobkow · 2011-10-07 19:26 · Score: 3, Interesting
  
  Very true. I have an email account at Yahoo (had it for years), but other than that I've never knowingly used any of their services since Google beat them at the search game. They're a good news aggregator, but if they disappeared there would still be hundreds of sites filling that niche. In fact, the only reason I end up reading their news is that I get taken to the page when I log out of my email account.
  But I wouldn't say they're "unfocused" as the summary says, and it's been made clear that the summary is completely wrong about them losing money. Like most web-based companies, they're constantly on the lookout for "the next big thing." Their big problem is they've never really found "the next big thing", though they've developed and deployed a lot of "me too" services.
  Despite that, they're a far more recognizable brand than "Bing", and unlike Bing, their search results seem to be on-topic (just checked a couple queries.) Apparently Yahoo still has a few tricks in their search engine that they could teach Microsoft.
  
  --
  I do not fail; I succeed at finding out what does not work.
Money-losing!?! by Dahamma · 2011-10-07 18:38 · Score: 4, Interesting

I know Yahoo isn't particularly trendy right now, but their 2010 EPS was 0.88 and they have made a profit so far every quarter on 2011.
Calling them "money-losing" in a slashdot post isn't only completely incorrect and horrible journalism (thanks, Timothy), but lesser publications and individuals have been sued for libel for this sort of thing when it affects the stock price...
1. Re:Money-losing!?! by Dahamma · 2011-10-07 19:16 · Score: 3, Insightful
  
  Actually, I agree with everything you said (other than the horrible grammar) - but it doesn't really have anything to do with my post :) Regardless of all the ways they can and should fail, they are making a profit, and stating otherwise is incorrect.
2. Re:Money-losing!?! by bloodhawk · 2011-10-07 20:41 · Score: 4, Interesting
  
  but lesser publications and individuals have been sued for libel for this sort of thing when it affects the stock price...
  umm lesser publications? what could possibly pass as a lesser publication when it comes to financial information than /.? seriously if anything EVER said on here was used for stock decisions then the moron making said decisions was going to lose his money from the next guy that tried to sell him a bridge anyway.
Re:Why? by teg · 2011-10-07 18:42 · Score: 3, Informative

But they already have their own search engine Bing, or is that worse than Yahoo? Why would they be interested in Yahoo @ all? The only company that could make a good case for buying them is Apple, so that they can use something other than Google for their native search services on the iPad and others.
Yahoo! has stopped doing search themselves, search has been handled by Microsoft for a couple of years now. So there is no value there... the value would be in yahoo.com, Flickr and various other web services.
Better idea by Anonymous Coward · 2011-10-07 19:15 · Score: 3, Interesting

Earth to Microsoft: Yahoo! is not worth $44 billion.
You could buy General Motors lock, stock, and barrel for $14 billion, name all the cars "Google Sucks,"
and get more bang for the buck. Heck, you'd have enough left over to buy Ford for around $16 billion,
and you could name all those cars "Google Sucks More" and still have $14 billion left over for a big party
-stolen from a post here a long while ago the first time this came around. still true-
Re:Why? by Hadlock · 2011-10-07 21:40 · Score: 5, Insightful

To further your point, within a week of installing the new CEO at Yahoo, they signed on Microsoft to do both their search and advertising for them. This is snarky to say, but it's true - Microsoft already owns them. Yahoo is a revenue stream for Microsoft, without any of the risk involved for Microsoft's share price or litigious liability. Next to installing their own executive at Nokia last year, this was the ultimate un-acquisition. All of the benefits with no downsides and zero long term liability.

--
moox. for a new generation.