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Yahoo deal really Microsoft threat?

updated 04:55 pm EST, Fri February 1, 2008

MS 2 Day Yahoo Ultimatum

Microsoft may have made its Yahoo buyout offer public as part of a threat to push Yahoo into a deal, says tech journalist Kara Swisher of the Wall Street Journal. While Microsoft has characterized its discussions with Yahoo as "off and on" and suggested only that Yahoo turned down an offer roughly a year earlier, sources inside Yahoo claim that Microsoft publicly proposed the now $44.6 billion buyout immediately after the company's underperforming earnings report on Tuesday; the public statement fulfilled a threat to make the offer public if Yahoo did not respond within two days, the insiders report.

Additionally, the suddenness of the approach is said to be triggering a backlash at Yahoo, which described the deal as "unsolicited" in an official statement. The search engine giant is allegedly investigating "any other option but Microsoft" as a possible partner or buyout candidate, Swisher says. The purported tip also suggests that Yahoo chief Jerry Yang has rejected multiple private attempts in the past and that other top staffers at the company consider Microsoft's move a thinly-veiled hostile takeover.

Neither Microsoft nor Yahoo has responded to the allegations, though a confirmation of the statement would cast doubt on the likelihood of a friendly deal and cloud Microsoft's attempts to suggest the deal would provide a mutual benefit in fighting Google for web advertising and application marketshare. Various reports have noted that Microsoft may resort to using a proxy firm to force a deal on its behalf.



By Electronista Staff
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  1. koolkid1976

    Fresh-Faced Recruit

    Joined: May 2003

    0

    Hostile Bid

    I could have told you that. And I'm not a tech journalist. I posted this comment on news.com when I first heard about it:

    It was a hostile bid I believe. Yahoo should have been the one to make the announcement. Microsoft announcing it puts pressure on YAHOO to accept because yahoo's stock will respond favorably, and it will give the industry the impression that yahoo is weakened and must merge or risk going out of business. If yahoo rejects the bid, or the merger is denied for anti-competitive reasons, Microsoft still wins. Yahoo's value will plummet, and they'll only have Google to compete with.

    This was not a merger announcement. It was an offer announcement. Made by the company making the offer. It is as much a psychological play as it is a financial one.

  1. Feathers

    Grizzled Veteran

    Joined: Oct 1999

    0

    woohoo!!!!

    As a long standing Minolta user with a Dynax (Maxxum) 7D in my bag and a host of (good) MAF lenses, initially I was worried about the Sony buyout of Konica-Minolta's imaging division. Any photographer will tell you that their real investment is lenses not bodies. This 24MP puppy is a dream come true with the icing being that Sony refers to this camera as a high-end enthusiast device which assumes a price to match, so it shouldn't be anything like Canon's 1Ds Mk III $5,500 price tag (although I'm sure in many ways it's not a fair comparison). Can't believe I'd ever hear myself rooting for Sony!

  1. garmonbosia

    Fresh-Faced Recruit

    Joined: Aug 2002

    0

    especially...

    "Can't believe I'd ever hear myself rooting for Sony!

    Especially in a thread about M$'s Yahoo bid;-)

  1. chas_m

    Moderator

    Joined: Aug 2001

    0

    Bad move

    I think this will shortly result in a backlash against MS rather than Yahoo. I think Yahoo's investors would have to be pretty short-sighted not to see that Yahoo may not be performing fabulously at the moment, but there's plenty of room for a good alternative to Google and Yahoo has been fairly innovative in their own right. They'll be fine if the stockholders aren't idiots (which could well be the case).

    MS certainly comes off as bellicose and bullying and more than a little desperate to me, I'm sure others see this as well. Maybe I'm the only one, but I sure read this as MS saying "we're really, really scared of Google."

    If it comes down to Google + Apple versus Yahoo + MS, I know which side I'll be investing with. And it has nothing to do with my fondness for Apple.

  1. MhzDoesMatter

    Fresh-Faced Recruit

    Joined: Jul 2002

    0

    Then...

    Does that mean it has everything to do with your disdain for Microsoft?

    Not sure if thats better

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    re: hostile bid

    It was a hostile bid I believe.

    Of course it was 'hostile'. But all 'hostile' means is that they're making a bid that wasn't solicited.

    Yahoo should have been the one to make the announcement.

    Um, MS is making a bid to buy a company. They're they ones that should be announcing it. Yahoo has actually no business announcing it (and if they did, they'd look like they were either endorsing it or at least solicited it).

    Microsoft announcing it puts pressure on YAHOO to accept because yahoo's stock will respond favorably, and it will give the industry the impression that yahoo is weakened and must merge or risk going out of business.

    Actually, it does nothing of the sort. Yahoo's stock will respond favorably because MS offered more then it's worth (which you do when submitting a 'hostile' or unsolicited bid for a company).

    And I don't see how driving the price up all of a sudden makes the stock seem weakened and about to go under. If that were the case, MS would be really, really stupid for offering more than it is worth, they'd be offering less.

    So, on the face of it, the offer actually makes Yahoo seem like it's worth some money (and could drive other investors/corps to offer more for their own buyout).

    If yahoo rejects the bid,

    It's not a merger, it's a buyout (there's a big difference). And it isn't really up to yahoo so much as the investors (unless yahoo controls a majority of the stock).

    ..., or the merger is denied for anti-competitive reasons,Microsoft still wins. Yahoo's value will plummet, and they'll only have Google to compete with.

    Sorry, but the only stock I see plummeting is Apple's stock (anytime you want to go back up to $200, I'd appreciate it guys!). Yahoo's price will 'plummet' back to $18, where it was before the buyout offer. That's it, nothing more. There's no reason why anyone would think differently about Yahoo because it doesn't sell-out with MS all of a sudden.

    This was not a merger announcement. It was an offer announcement.

    It was a buyout announcement. A merger would imply a merging of corporations. A buyout is one taking over the other.

    And of course it was an offer announcement. They've got to tell the stockholders they want to buy their stock at some point, right? They just can't go out and try to sneakily buy up 51% of the company.

    Made by the company making the offer. It is as much a psychological play as it is a financial one.

    Who would you expect to make the announcement? You want to buy a house, you make an offer to the owners of the house that you want to buy it. MS wants to buy a corporation, so they have to tell the owners (the stockholders) they want to buy it. What do you expect them to do, just send everyone a note, and wait for the news to leak to the media?

  1. LunarMoon

    Fresh-Faced Recruit

    Joined: Jan 2008

    0

    Crappy Microsoft

    I hope the deal to go forward as this will be the end of Microsoft. Microsoft will never win the battle against Google. M$ is a destructive company that just cares for money, not people. They don't give a s*** to people. This deal is very good news for Google. Google guys must be laughing their asses off because Microsoft think Google is a threat and forget they are a software company designed to produce crappy software to the masses. It is very amusing to see M$ trying to destroy Google and failing every time. This deal is a certificate that says: our ad delivering system and our search engine sucks, we want yours to see if we can make it work.

  1. chas_m

    Moderator

    Joined: Aug 2001

    0

    to mhzdoesmatter

    No, it hasn't got much to do with my disdain for MS (though I certainly have plenty of that). It's got everything to do with the track record of innovation of the two "sides". Apple + Google have an awful lot of innovation under their belt. MS? Not so much. Yahoo? Some, but nothing like Google.

    Winner if this whole thing played out? Of course it's impossible to say, I was just saying I'd bet on Apple + Google to come out ahead. IOW, Microsoft buying Google wouldn't help MS and it wouldn't help Yahoo.

  1. tmedia1

    Fresh-Faced Recruit

    Joined: Dec 2007

    0

    MS = Borg

    The Borg will try assimilate everything. Resistance is futile.

  1. malax

    Fresh-Faced Recruit

    Joined: Aug 2006

    0

    re: testudo

    I agree with most of what testudo said (ugh), but there are a few errors:

    "Of course it was 'hostile'. But all 'hostile' means is that they're making a bid that wasn't solicited." Actually it'll only be "hostile" if the Yahoo board decides to oppose it.

    "And it isn't really up to yahoo so much as the investors (unless yahoo controls a majority of the stock)." That's right except for the parenthetical part. It is impossible for a company to control itself. Control consists of half the shares (plus 1) of the outstanding (i.e., not owned by the company) shares. It can be a little more complicated with voting and non-voting shares, but in no case can a company vote its own shares.

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