Yahoo To Reject Microsoft Bid

Many outlets are echoing a subscribers-only report in the Wall Street Journal that Yahoo's board has decided to reject Microsoft's takeover offer. The NYTimes offers the only other independent reporting so far confirming this claim. The report says that Yahoo will formally reject the offer in a letter on Monday, since they believe it "massively undervalues" the company. Microsoft offered $31 per share, a 62% premium on the stock price at the time, for Yahoo; but the latter believes that no offer below $40 per share is tenable. The AP has some background on Yahoo's options in responding to the bid.

In other news...

Redmond weather reports are predicting thunderstorms, with a 90% chance of scattered chair showers.

Ballmer: "Google's not a real company..."

There may be some Slashdot readers who don't know the story about the chair: Ballmer Throws A Chair At "F*ing Google" [battellemedia.com].

Quotes:

At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: "Fucking Eric Schmidt is a fucking pussy. I'm going to fucking bury that guy, I have done it before, and I will do it again. I'm going to fucking kill Google." ....

Thereafter, Mr. Ballmer resumed trying to persuade me to stay... Among other things, Mr. Ballmer told me that "Google's not a real company. It's a house of cards."

Quoted from legal papers in a court case brought by Microsoft.

Re:Ballmer: "Google's not a real company..."

Of course Google is not a real company. If Google was a real company, then Steve wouldn't be buying their competitor. They'd be buying Google.

Re:Ballmer: "Google's not a real company..."

The catch with that logic is it was not a 100% cash offer. It was a 50% cash and 50% M$ stock offer, now attempting to dump $22.3 billion dollars worth of M$ stock would mean in effect a substantial collapse in the purchase offer as the M$ stock price collapsed. After all M$ already took a substantial negative hit as soon as M$ admitted defeat in the Internet marketplace and was forced to make the offer to buy Yahoo.

While the yahoo board would obviously be tempted with a cash only offer, getting stuck with M$ stock at this time would be nothing the Yahoo board could, in all good conscience, recommend to its share holders. Oddly enough, a substantial portion of the rise in Yahoo share price that resulted from M$'s bid will remain because of M$ admission of defeat in the Internet market place, simultaneously that admission of defeat does not bode well for M$.

Of course it's not a "real" company...

If it were a "real" company, like, say, Netscape (was), the Empire could cut off its air supply. Same with "Linux" (_not_ a "real company", doesn't need to make money or stay "in business" in order to survive and continue to challenge The Monopoly). "Real Companies"(tm)(r)(c) can be eliminated using "real" monopoly business abuse. This is what _really_ has SteveB pissed off and frustrated to the point where he's reduced to swearing and throwing things.

He has viable competitors out here, about which he can't do a fsckin' thing.

Oh, and _zero_ market loyalty, after ten years of abuse. Make that negative numbers...

TEN years of abuse?

Somebody can't count.

MS was a customer hostile enterprise (eventually proved criminal, time and time again) from the day Gates crawled out of bed and set it up in 1975, with mission: Enrich ME, fuck everyone else. (Remember the anti-hobbyist memo [wikipedia.org] (first of many famous incriminating memos)? [google.ca] The leopard doesn't change its spots.)

I make that 32 years. The cost to civilisation is incalculable, and we'll be paying for decades to come. Millions of lives are made worse by Windows and every other worthless MS product, every day.

Ballmer was hired and retained to continue the disgusting legacy.

Frankly, my dear, I don't give a damn.

There may be some Slashdot readers who don't know the story about the chair

--- and a good many more who wish the joke could be retired along with the other long-since-gone-stale running gags that pass for humor on Slashdot.

Re:Ballmer: "Google's not a real company..."

Buyout offers are consistently above market prices, consider the following.

1/2 of 1% of a company's outstanding shares being traded in a given day is a VERY high volume. This means that even on a big news day, well over 99% of shareholders still think owning the stock is a good idea. They value it therefore at some amount higher than the going price.

In order to get these people to sell to a buyout offer, you have to make it go from 1/2 of 1% thinking that they should sell to 50%+1. To convince all the shareholders between .5% and 50.0000001% to sell means you have to raise the price, substantially.

Re:Ballmer: "Google's not a real company..."

> Ballmer is correct to an extent - google and yahoo ARE a house of
> cards, completely reliant on the fickle advertising market and pumped
> up share prices.

This would be the same market Ballmer proposes to run Microsoft into debt in order to buy into?

c.

Re:Ballmer: "Google's not a real company..."

Good luck using the Internet and its vast store of information without Google or Yahoo! or any decent search engine. What are we going to do instead? Use Gopher? Google is what makes the Internet accessible to people. There's a TON of value in that alone. I realized the other day that instead of buying a book, doing traditional research, etc. I usually just Google for an answer when I have a technical problem. Do you realize the immense value in that? If Google suddenly started charging for search, I would pay for it. The search engine is a vital part of the Internet or any vast collection of information.

Any tech company can be called a "house of cards". After all, what real assets do they own other than some buildings and equipment? The value of a tech company isn't measure that way. The foundation is the people they have and the talent pool they can draw from. Google has an immense talent pool that has shown itself being capable of solving many, many problems that bring value to people's lives. Advertising is just one avenue they use to monetize that value.

Re:Ballmer: "Google's not a real company..."

There are at least 3 search engines with quality competitive to google that are not yahoo.
If google started charging for search, would you seriously not investigate the nearly equally good alternatives?

Re:Ballmer: "Google's not a real company..."

Sure he would ... he's just saying that Google has value, that's all. And I agree: no library is of much use without an index.

Re:Ballmer: "Google's not a real company..."

"completely reliant on the fickle advertising market"

When is somebody going to step back and look at this phrase? Yeah, come to think of it, every media format on Earth, from newspapers to radio stations to magazines to TV stations, has companies that are completely reliant on the fickle advertising market. Been going on for 200 years+ of American capitalism; I don't see it stalling any time soon.

Re:Ballmer: "Google's not a real company..."

The majority of users don't hate advertising, they hate the advertising they have been given. Google is a unique company on the net; their success is largely due to the fact that there is not a concentrated effort to remove their advertisements at all costs. Why? There is a perception by the users that Google's advertisements are not intrusive and annoying. So what's special about Google's advertising methodology:

• They don't use images - Advertisements that uses images, and in particular large flashing animate images, on a web page speaks the following to me:
  
  • The organization believes I am too stupid to read their single line entry telling me about their product.
  • The organization doesn't value my time because they are using their advertisement not simply to compliment my experience, but they are trying at all costs to waste my time in finding the information that they pushed off the page with their advertisement.
  • I do not want to do business with this organization ever. In fact, I might want to take note of their name and consider using a competitor who hasn't shown this disregard for their customer's time.
  
  
• Most, if not all, of the advertisements are in some way related to what I am viewing.
  
  • I am out there searching for a news article on a recent event and having the main advertisement tell me about a new medicine for something.
  • The advertisements are only slightly different from the search results (shaded background) and may actually be a valid choice for what I'm trying to find.
  
  
• The front page doesn't have advertisements. If you are a search company, your front page should be a search page. It shouldn't have a ton of news and advertisements on it. If I want news, I will click on a news link or go to news.whatever.com. I don't need a page like www.yahoo.com that during network slowness is going to take time to load.

Good to have more search engines

As much as we all love Google, I think there needs to be a variety of search engines. Microsoft-Yahoo might have been a bigger player, but we'd lose the variety. Ask.com almost doesn't count.

What happens next

Either:

1. Microsoft ups their offer. Yahoo board indicated they wouldn't consider anything under $40.

2. Microsoft walks away. Shareholders revolt after stock drops big time.

3. Microsoft wages a proxy fight and tries to win over shareholders over the board's head.

(3) is the most likely outcome. Microsoft already said something like "we won't take no for an answer".

Re:What happens next

2. Microsoft walks away. Shareholders revolt after stock drops big time.

You know, the paranoid in me thought that this might be Microsoft's strategy all along.

Surely Ballmer knows many/most Yahoo! engineers aren't happy with the idea of being Microsoft employees (even if they do endure it, they won't do so happily, which affects productivity). Also most/all of Yahoo! is built using tools not easily integrated into Microsoft's (but this could be mitigated with a slow integration process). So the actual value of Yahoo! for Microsoft isn't all that great. Is this worth wiping out all of Microsoft's war chest and going into debt to boot? I doubt it.

Instead, imagine what would happen if Yahoo! vanished overnight. Yahoo! users would migrate either into Google services or Microsoft ones. Ballmer might believe that he can woo the majority of them; even if not, it still raises Microsoft's market share, even if while doing so it does the same for Google. And this might be achievable by doing exactly what Ballmer is doing: getting Yahoo! directors (and employees) to fight with Yahoo! stockholders. Yes, it might not wipe out Yahoo! overnight, but as a consequence the stock might topple downwards, and who knows what might happen then - the board might get replaced, internal turmoil, etc. etc. Even if it doesn't kill Yahoo!, it might make it less competitive, again, something that is good for Microsoft.

Idiots

Their P/E is 62. *SIXTY-TWO*

That means they don't make money. At least not compared to the already-inflated value of their stock. The value of their shares should be down in the single digits right now based on their income -- a P/E from 15-20 would be much more reasonable. Microsoft comes along and offers to buy them out for an amazing amount of money, and they turn it down?

Refusing this deal borders on illegal, assuming their job is to act in the interests of their shareholders.

Re:Idiots

Refusing this deal borders on illegal, assuming their job is to act in the interests of their shareholders.

Instant profit is not always in the long term benifit if it comes along with total destruction of the company. And who says short term profit is what Yahoo!'s shareholders want?

Buying Yahoo will not make Microsoft smarter.

It's possible to learn a lot by examining the world around you. For example, what am I bid for this half-eaten, moldy burrito? I am accepting no offers below $40.

Microsoft has proven, over many years, that it does not know how to run a search engine. Buying Yahoo will not magically make Microsoft smarter, especially since Yahoo has proven, over many years, that...

This is done

YHOO board comes out against, MSFT will rail that YHOO isn't worth that much, a month from now MSFT will offer a sweetened offer - call it $34 and propose its own slate of directors for the annual meeting. YHOO board will accept because they don't have a choice. MSFT will complete the purchase Jerry Yang and his cronies will go back to the bars in the Valley start their own venture capital firms or become part of one of the VCs like Kleiner-Perkins. Deal closes in the 4th quarter.

Thank God.

As a share holder in Microsoft I think that Microsoft has way better things to do with my retained earnings than pay too much for nothing right before the whole economy tanks.

He's an idea. Sell you stupid DRM pipe dreams down the river of wasted time and turn into what you should be, a DIVIDEND paying LOW GROWTH utility company. Make a good operating system with no bells or whistles that will pass any anti-trust case, sell it for a low enough price that the trouble of downloading a bit torrent crack isn't worth it. Make it so I can add/remove modules over the Internet at will for low low prices. Then make a a version that looks fucking fantastic and sell it like a Mac for a premium to fanboys and people who think translucent colored baubles are the shit.

Someone over there has finally woken up. I have been teaching Office 2007 and for god's sake it's a great product. 90% of the things that have made want to skull fuck the assholes in the Office department to death are gone. The menu system is great. The Page layout break controls are great. The automatic formating is now controllable. Best of fucking all you can now set the default action for paste to be text only.

I want Microsoft to stop being a bitch like Sony. (Don't FUCKING sue yourself.) Don't get delusions of being a media company or and Internet company you twits. Give me my fucking retained earnings as a dividend, make Office for a profit, make Server for a large profit, and make Windows so it works underwater in space, in the future, across standards, platforms, without a hoot because it is a god damn utility that doesn't give a fuck because everyone has to use it and doesn't hate it because it just fucking does its job come hell or high water.

It is compatibility problem really

FreeBSD doesn't work well with Windows. It is not a joke. If it worked (or works) it could be a huge disaster for both companies. Yahoo buyout is not some "dotcom startup invented something, lets buy it" thing, 46 billion is a huge money even for Microsoft. They can't say "Oh it didn't work" and turn their backs.

Companies are not compatible with each other. Yahoo is a open source powered services giant. MS is Windows maker who struggles to make Windows more credible in large installations. Would MS pay $46 billion to further advertise open source technologies and operating systems like FreeBSD?

I suggest Slashdot people who thinks Yahoo is lame because of their homepage check http://developer.yahoo.com/ [yahoo.com] to see what Yahoo actually is.

Re:Excuse me?

There's an equilibrium, though. When a large block of stock is sold, the price of the stock may drop momentarily, but then it is undervalued and hedge funds and mutual funds snap it up until it is back to where it was. This effect is born out empirically. The demand curve for a stock is extremely steep: if it drops even a dollar, everyone and his mother wants to buy, which pushes it back up to its equilibrium price.

The one exception is when insiders sell large blocks of stock -- then the market assumes there must be bad news coming, and the price does drop and remain low. But this effect is informational, and the magnitude of the drop has much less to do with how many shares are dumped onto the market than it does with what the dump says about the insider's opinions (e.g. what proportion of his stock he dumps, and how many other insiders do the same simultaneously).

In any case, the fact that there are "loose shares" dumped onto the market does not by itself affect the price.

Re:Not smart

The problem with American business and the financial "industry" built around it is that there is actually no interest at all in sustainable business, but rather exponential profit growth at all cost, even the death of the company itself. The company dies, the money vultures move on to the next target.

I challenge you to show how Yahoo is a sustainable business. Before the MS offer, they just announced that they would have to fire 1000 employees [google.com]. The company's revenues year over year are shrinking [nwsource.com] because their management cannot find a way to translate all of their site traffic into money. They have a history of failing to meet their own projections. At the very least this a poorly run company, and with the coming recession, I do not think its sustainability is out of the question.

Second as an individual that owns stock, and thus is one of these "money vultures," why should I or any investor want to own Yahoo's stock, outside of takeover speculation. The company offers no dividend, which means the only return on investment I will see in it is from the company's growth, something it has clearly failed to predict, manage, or deliver on.

You claim that the entire financial industry is built on "exponential growth" but you fail to ignore the fact that Yahoo abd most tech stocks choose to hold their stock out as a growth stock, meaning they can only justify their stock price by *gasp* growing. If Yahoo were too come out tomorrow, declare a dividend (like say Altria), and pay some of the $1.5 billion dollars in cash they have to their shareholders, than their stock would finally have some intrinsic worth NOT tied to their rate of growth. (Note: For an explaination of growth stocks vs. value stocks, check this link [axaonline.com] out.)