Microsoft Bids $44.6 Billion For Yahoo
Posted by
kdawson
on Fri Feb 01, 2008 10:01 AM
from the big-deal dept.
from the big-deal dept.
The news is everywhere this morning about Microsoft's $44.6B offer to buy Yahoo. The offer represents $31 a share, a 62% premium over Thursday's closing price; and Yahoo's stock price has been rising in after-hours trading. Microsoft has been making overtures to Yahoo since 2006, according to the CNet article, including a buyout offer last February that was rebuffed. Mediapost.com has some perspective on the deal from the point of view of ads and eyeballs. Such an acquisition, which would be Microsoft's largest by far — it bought Aquantive last year for $6 billion — would need approval by US and EU authorities. A European Commission spokesman declined to comment.
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Yahoo May Re-Consider Google Alliance, Rebuff Microsoft 273 comments
anastasd writes "Reuters is reporting that Yahoo might consider a business alliance with Google as a way to top a $44.6 billion takeover proposal by Microsoft. 'Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, that source said. At $31 a share, Yahoo believes the bid undervalues the company, two sources said. A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.'"
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News: Carl Icahn Takes on Yahoo's Board 279 comments
narramissic and several others have written to point out that Carl Icahn has initiated a proxy battle with Yahoo's board of directors over their rejection of Microsoft's bid for the company in February. Icahn has purchased millions of Yahoo shares over the past week and assembled a group of nine other investors (including Mark Cuban) to persuade the board to resume talks with Microsoft. Yahoo remains unimpressed. Icahn's letter to Yahoo accuses:
"It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet."
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Technology: Microsoft Offered $40 a Share For Yahoo 301 comments
fistfullast33l writes "Bloomberg is reporting that a recently unsealed court case by shareholders against Yahoo reveals that Microsoft offered $40 a share for the Internet search company in January 2007 and Yahoo turned it down. We've extensively discussed Microsoft's bid for Yahoo earlier this year for $33 a share, which was rebuffed. Investor Carl Icahn has launched a proxy fight against Yahoo over the spurning of the Microsoft deal." CWmike notes Computerworld's coverage of the revelations: "The complaint places much of the blame on [Yahoo CEO Jerry] Yang, describing him as someone with a 'well-known' antipathy toward Microsoft who acted out of a personal interest to keep Yahoo independent. Something wrong with that? Oh, yeah... public company."
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Very odd (Score:5, Insightful)
Re:Very odd (Score:5, Insightful)
In fact just like about everything MS has ever done (eg SQL, IE, PowerPoint
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Re:Very odd (Score:5, Insightful)
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Re:Very odd (Score:5, Insightful)
In fact just like about everything MS has ever done (eg SQL, IE, PowerPoint
I checked Live.com the day it was announced. When it bitched about not using IE (when I tried to login my passport account) , I never visited it back. That is what makes every MS attempt unsuccessful. They can't live with the fact that there is a thing called HTML standard, TCPIP standard and Internet is platform neutral from beginning. They use every opportunity to alienate other OS/Browser users.
I could never see Yahoo as a great search engine although it seems spammers/blackhats/SEO junk targets them less. For the record, Google has always been a spammer heaven for me too.
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Re:Very odd (Score:5, Funny)
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Re:Very odd (Score:5, Insightful)
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And then there were two (Score:5, Insightful)
Maybe, but the possibility of there only being two [hitwise.com] main search engines out there, with the next largest competitor Ask.com at a paltry 4.1%, is fairly scary.
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Re:Very odd (Score:5, Insightful)
Seems so unlikely to ever be allowed by the regulators, yet they're willing to throw billions at it anyway. They must feel confident for some reason.
If they allowed Google and Doubleclick, they'll probably allow this too. This doesn't give anyone a monopoly or anything close to it, since Google's still #1 in search.
The question is, how long until MS feels compelled to screw up Yahoo like Hotmail?
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Re:Very odd (Score:5, Interesting)
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Re:Very odd (Score:5, Insightful)
You can bet yahoo would go the same way, migrating to windows, spending a ridiculous amount on new hardware and suffering significant problems in the process.
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Implications for open source (Score:5, Interesting)
Re:Implications for open source (Score:5, Informative)
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Re:Implications for open source (Score:5, Interesting)
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Microsoft is "innovating" again... (Score:5, Funny)
Judging by this blurb, I think the answer is going to be a big, fat yes.
Pirate Bay (Score:5, Funny)
Letter from Ballmer to Yahoo! Board (Score:5, Informative)
January 31, 2008
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer
Dear Members of the Board:
I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft's closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.
Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.
We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!'s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft's share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.
Microsoft's consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.
In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that "now is not the right time from the perspective of our shareholders to enter into discus
Re:Letter from Ballmer to Yahoo! Board (Score:5, Funny)
Eliminating unnecessary, extraneous keystrokes on a corporate scale represents a compelling efficiency realization event for your shareholders.
So there.
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Re:Letter from Ballmer to Yahoo! Board (Score:5, Insightful)
1) Microsoft is indicating that they are challenging Google "Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. ". However, This statement should apply to Microsoft. Microsoft is the 800lb gorilla yet they are making it sound like they are a bit player and Google is the gorilla - more management doublespeak.
2) Microsoft is indicating they would replace all non-Microsoft at Yahoo with Microsoft technology with phrases like "combination enables synergies related to scale economics". This is great market speak for lay off all that oppose the Microsoft initiatives and move to a common, Microsoft-centric platform.
3) Microsoft wants their search as, I guess, MSN has not been effective: "single search index".
4) Phrases like "eliminating redundant infrastructure and duplicative operating costs" are management speak for layoffs, firing middle management at Yahoo, moving to Microsoft's management and benefit structure, and similar. In my experience through many corporate buyouts, all are very negative to the employees at the company being purchases - Yahoo. However, Microsoft attempts to temper this with "offer significant retention packages to your engineers, key leaders and employees", which is more corporate double-speak.
5) The "exceptional display and search advertising capabilities" sounds like a tighter integration with Microsoft's technology, i.e., Windows and MSIE. Maybe they want to have tighter integration between Vista and their ad revenue stream. Could "new advertising platform capabilities" indicate ad-supported Vista (get a free ad when you log in, when you fire up Office, etc.)?
Overall, it sounds like Microsoft is saying that Yahoo should sell to them because Yahoo didn't meet their goals, the combined company can better challenge Google, and Yahoo has tech that Microsoft needs.
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So This Means... (Score:5, Insightful)
Theoretically Microsoft could buy up anything good about the internet so we can all shut our computers down and settle in w/a trip to the library and a good book.
Priceless quote. (Score:5, Funny)
The only thing that matters: EMAIL (Score:5, Interesting)
Interesting that - imagine building a business using online apps, only to have your supplier go under and get bought out in some botched effort, and then lose history...
I think there are a number of serious implications in this MS/Yahoo deal. The monopoly aspect is actually the least problematic: the loss of history is a greater problem.
But then, maybe the Feds under a Democratic Admin will say "nuh uh!" and kill the deal...
RS
The Empire Strikes Back (Score:5, Insightful)
It was only a matter of time before Microsoft decided to try to get a final regulatory pass from the Bush administration before the inauguration of a less-sympathetic President in 2009.
This deal makes a lot of sense for Microsoft (sort of - I'm assuming Yahoo!'s ad business really is worth the cash), but I can't see how this is at all good for Yahoo! or the marketplace at large.
Is the plan to re-brand everything as Microsoft Live! (keeping the exclamation mark) - thus destroying pretty much the only thing Yahoo! has going for it - brand recognition?
I would be very sad to see Yahoo! and their odd collection of services get subsumed and destroyed in a merger with Microsoft. Yes, I'm assuming much of Yahoo!'s tech portfolio would be wiped away or left to die - this wouldn't be the sort of merger Adobe engineered with Macromedia by a long shot.
flickr (Score:5, Insightful)
I contacted the FTC to complain (Score:5, Interesting)
I know about the other solutions, but none are as feature complete IMHO as Zimbra. Two words: Blackberry integration.
Re:nice to see (Score:5, Insightful)
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