02/01/2008, 4:55pm, EST
Friday, February 1stYahoo deal really Microsoft threat?
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 $44.6 billion buyout immediately after the company's underperforming earnings report on Tuesday; the public statement fulfilled a threat to make the offer public if Yahoo did not respond within two days, the insiders report.
Additionally, the suddenness of the approach is said to be triggering a backlash at Yahoo, which described the deal as "unsolicited" in an official statement. The search engine giant is allegedly investigating "any other option but Microsoft" as a possible partner or buyout candidate, Swisher says. The purported tip also suggests that Yahoo chief Jerry Yang has rejected multiple private attempts in the past and that other top staffers at the company consider Microsoft's move a thinly-veiled hostile takeover.
Neither Microsoft nor Yahoo has responded to the allegations, though a confirmation of the statement would cast doubt on the likelihood of a friendly deal and cloud Microsoft's attempts to suggest the deal would provide a mutual benefit in fighting Google for web advertising and application marketshare. Various reports have noted that Microsoft may resort to using a proxy firm to force a deal on its behalf.
Filed under: industry
Other story tags: Microsoft, Google, Yahoo
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It was a hostile bid I believe. Yahoo should have been the one to make the announcement. Microsoft announcing it puts pressure on YAHOO to accept because yahoo's stock will respond favorably, and it will give the industry the impression that yahoo is weakened and must merge or risk going out of business. If yahoo rejects the bid, or the merger is denied for anti-competitive reasons, Microsoft still wins. Yahoo's value will plummet, and they'll only have Google to compete with.
This was not a merger announcement. It was an offer announcement. Made by the company making the offer. It is as much a psychological play as it is a financial one.
Especially in a thread about M$'s Yahoo bid;-)
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.
Not sure if thats better
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?
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.
"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.