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Yahoo Spent $79 Million To Fend Off Microsoft

CmdrTaco posted more than 5 years ago

Yahoo! 82

Apologetics Blog writes "Getting bought by one of the biggest companies in the world turns out to be a rather costly thing. Last year when Microsoft was in talks with Yahoo regarding a possible buy-out, in a report recently filed with the Securities and Exchange Commission, Yahoo announced that it cost them $79 million to fight off Microsoft. Most of that money was spent on advisors who examined Microsoft's proposals, and the way it would impact on Yahoo's search agreement with Google. The deal fizzled out when federal antitrust regulators said it would challenge any deal made between the two companies."

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82 comments

1st (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27040119)

first

Re:1st (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#27040175)

I was first, but kept on refreshing the page to become second.

advisors (3, Insightful)

sveard (1076275) | more than 5 years ago | (#27040157)

Shows that consultants win, as they so often (always?) do

Consulting (2, Funny)

Anonymous Coward | more than 5 years ago | (#27040659)

If you're not part of the solution, there's plenty of money to be made prolonging the problem.

http://despair.com/consulting.html

:D

Re:advisors (1)

Wandering Wombat (531833) | more than 5 years ago | (#27041327)

So... Yahoo basically paid out $179,000,000 to have someone do their homework assignment for them? Maybe if they applied themselves a little harder, they wouldn't be in this situation.

Re:advisors (1)

Tubal-Cain (1289912) | more than 5 years ago | (#27041715)

Yahoo Spent $79 Million To Fend Off Microsoft

Yahoo basically paid out $179,000,000...

Either inflation is really bad this year, or you are using Excel.

Re:advisors (1)

Wandering Wombat (531833) | more than 5 years ago | (#27042513)

Doh-eth, positive it said 179... still, doesn't change the general gist of my post.

fiduciary responsibility? (2, Insightful)

Shakrai (717556) | more than 5 years ago | (#27040161)

Does Yahoo! have a viable business plan besides merging with someone else at some point? If I was one of their shareholders I might have gotten pretty annoyed that they dismissed the MSFT offer out of hand the way they did. What's the future of Yahoo! without a merger? They have a platform in the works that can pose a serious challenge to Google and secure marketshare against them or Microsoft? Didn't think so.....

Re:fiduciary responsibility? (4, Funny)

biscuitlover (1306893) | more than 5 years ago | (#27040559)

Actually, compared to Microsoft's flailing in search, Yahoo are a pretty solid number two.

Hang on, let me rephrase that.

Microsoft has been greedily eyeing up Yahoo's number two slot.

Oh, forget it.

Re:fiduciary responsibility? (1)

Lumpy (12016) | more than 5 years ago | (#27040755)

Glad you're not one of their biggest investors with your money,money,money blinders.

You can be #2 and be wildly profitable and stable. In fact many time #2 is the most stable company to invest in.

Beamish is the #2 beer in Ireland. Guiness being #1 does not make all Beamish executives poor and destitute. They are actually very rich and doing very well. The company is thriving.

And honestly Beamish tastes far better than that Bitter Guniess garbage.

Re:fiduciary responsibility? (2, Insightful)

Shakrai (717556) | more than 5 years ago | (#27040883)

You can be #2 and be wildly profitable and stable. In fact many time #2 is the most stable company to invest in.

Thanks for telling me what you can be. Now tell me if you honestly think Yahoo has any future outside of slowly bleeding to death after Microsoft overtakes them and Google becomes even more entrenched.

Re:fiduciary responsibility? (2)

hairyfeet (841228) | more than 5 years ago | (#27041043)

I'm sorry but HAHAHAHAHAHA! Did you say MSFT overtakes them? Have you TRIED MSFT Search? Hell it was shit 10 years ago and it is shit+ extra stink now. The searches are total crap and most of what you find is simply crap trying to sell you junk that has NOTHING to do with what you are looking for.

Yahoo may not be making any headway on the mighty Google,although personally I use Yahoo Search as I find it has better features, it is simply leagues above anything MSFT has or has tried in the last 10 years. Why do you think MSFT wanted to buy it so bad? Because Ballmer could see the "ideas" they were working on for Search and I'm willing to bet the entire division's ideas sucked the big wet titty. They just don't know squat about search and throwing more money at it won't fix it in this case.

Re:fiduciary responsibility? (3, Informative)

Shakrai (717556) | more than 5 years ago | (#27041189)

I'm sorry but HAHAHAHAHAHA! Did you say MSFT overtakes them? Have you TRIED MSFT Search? Hell it was shit 10 years ago and it is shit+ extra stink now. The searches are total crap and most of what you find is simply crap trying to sell you junk that has NOTHING to do with what you are looking for.

I'm talking about the odds of success which strange as it may seem have little to do with the quality of Microsoft search. I hate Microsoft as much as the next guy but if you look at it objectively I think it was a bad deal for Yahoo's shareholders when management rejected Microsoft's offer. Microsoft offered $33/share, which was more than they've been valued since 2006 (and only for a brief time in 2006 at that).

Do you honesty see Yahoo crawling back up to $33/share on their own with either their current product portfolio or anything they have on the drawing board? I hear a lot of people bashing Microsoft but I don't hear too many people defending Yahoo. I still say I would have been pretty pissed if I was a Yahoo shareholder.

excuse me (1)

unity100 (970058) | more than 5 years ago | (#27044421)

but if those odds of success were AT ALL any good, microsoft would have a better search by now than the shit they had for aeons. they dont. they didnt improve. i dont see the trend changing.

you dont need to have a 'product' on drawing board to make money. most of the internet businesses sell SERVICES, ADS and etc and make profit. all yahoo needs to do is to become profitable and earn money. not be 'innovative' and create products etc.

Re:fiduciary responsibility? (1)

DannyO152 (544940) | more than 5 years ago | (#27048641)

I don't know. At the time, I was fairly sure that the shareholders were behind management. You also have to figure that an investor with tech stocks probably already held as much Microsoft as they wanted. (I forget, was the offer strictly cash or cash and stock).

Meanwhile, frankly, I thought Microsoft got lucky that the deal fell through. They would have gone into debt for the privilege of overpaying for Yahoo, and all because of Ballmer's obsession with search. I was noticing today that Microsoft's stock has had a consistent slope downward since the deal, 13 months ago. How does Ballmer keep his job?

Re:fiduciary responsibility? (1)

Shakrai (717556) | more than 5 years ago | (#27049627)

I was noticing today that Microsoft's stock has had a consistent slope downward since the deal, 13 months ago. How does Ballmer keep his job?

Well, to be fair to our chair throwing friend, every stock not related to pasta or firearms has had a consistent slope downward in the last 13 months......

Re:fiduciary responsibility? (1)

hairyfeet (841228) | more than 5 years ago | (#27078241)

Actually calls for his firing [extremetech.com] have already started. When you see that The Win7 hype [engadget.com] is just that, and when it comes to enterprise, which is where the big bucks are and where MSFT has always made boatloads of cash, that Win7 doesn't cut it [infoworld.com] anymore than Vista, I can't say that I blame them.

We have seen that under his watch he has gone from one idea to another like the whole company has ADHD, with Zune(trying to be Apple), trying to shell out WAY too much money for Yahoo(trying to be Google) and finally his very own Spruce Goose Vista [wired.com] , which even MSFT board members [nwsource.com] couldn't get to work with programs written by MSFT. His tenure has frankly been nothing but one failure after another, and mark my words, when Win7 comes out it will be just as bloated and slow and sell just as badly as Vista.

What the company desperately needs is a new leader that will focus on their core strengths instead of trying to be Apple. Their big money comes from corporations NOT home users who frankly as long as it doesn't crash and runs their games are happy little campers anyway. Yet instead of releasing a low resource backwards compatible enterprise OS it looks like with Win7 they are AGAIN releasing this giant bloated pig of a multimedia OS with more bling per square inch than something off of "pimp my ride". There is a REASON why you find lots [tipsfor.us] of articles including on MSDN [msdn.com] giving step by step instructions on turning Win2K8 into a workstation OS. Because WinVista is too damned bloated to be a good enterprise OS and frankly Win7 will most likely be more of the same.

They had better change their direction, starting with a good firing for Ballmer and the bringing in of someone from Office or Win2K8 that knows business. Because I have never seen this kind of mass abandonment of a MSFT OS ever, even when WinME came out. My customers happily pay me chunks of money to make Vista go away, and more and more SOHOs and SMBs are asking me "what do you know about this Linux thing?" and yet Ballmer still tries to force everyone into this multimedia nightmare of an OS instead of keeping business/home separated like it was for WinNT/Win9x. But he ain't Steve Jobs and Win7 ain't no OSX. If they don't change their direction, which I seriously doubt will happen under Ballmer, then their stock price and sales are going nowhere but down. I mean have you EVER seen companies BRAG [tigerdirect.com] about giving you the previous MSFT OS THREE YEARS after the new version came out? Nope, me neither.

Re:fiduciary responsibility? (1)

robthebloke (1308483) | more than 5 years ago | (#27041089)

Yes actually I do, though I'd call it crapware. Almost every PC I've ever serviced for a friend (read: re-install windows) has had the yahoo toolbar installed into firefox or IE. Normally I do a nice clean install sans the Yahoo Bar (You've got a google bar, so what's the point?). I've been surprised at the number of (sane and intelligent) people who for some maddening reason, actually want it back?!?

I'd call it crapware, but it's actually one of the most commonly installed bits of crapware you'll find...

Re:fiduciary responsibility? (1)

cheftw (996831) | more than 5 years ago | (#27041399)

Mod parent insane. Beamish is awful and a joke. People buy it because it is cheap, or because they feel sorry for it, or because they are incredibly old. I fully support them and think they are wonderful people and businessmen but their stout is just not good.

Re:fiduciary responsibility? (3, Interesting)

rbanffy (584143) | more than 5 years ago | (#27041207)

Actually, I sincerely doubt the MS offer was done in good faith.

Had the MS bid gone forward, MS would have access to a whole lot of Y! internal data, research, plans and so on. If they later retired their offer as they considered the companies were never really a good match, MS would have walked away with a lot of inside knowledge about its biggest competitor in the search market and Yahoo would have gotten nothing but a lot of FUD and a probably mortal wound.

This would be a lot less expensive than buying Yahoo! would be in the first place and Yahoo would be every bit as gone as #2 as if they were bought.

This kind of maneuver is so typical of Microsoft I cannot imagine any other explanation.

Re:fiduciary responsibility? (1)

Darkk (1296127) | more than 5 years ago | (#27047621)

Problem with merges is that people assume they will have access to everything. Not entirely true. It depends on the merger agreement. They could stipulate that Microsoft can't access their "trade secrets" for a period of time, say for a year or so. This prevents a company milking them dry and toss em out like an empty beer can.

Yahoo! could have had the upper hand in the merger but CEO didn't play his cards right so he screwed up....twice. So now the new CEO is cleaning up the previous CEO's mess with little hope of recovery at this point in time due to economic downturn.

Re:fiduciary responsibility? (1)

rbanffy (584143) | more than 5 years ago | (#27047665)

I have to disagree. Had MS been denied access to more sensitive information, any proposal would collapse at once. The damage (disturbing business, casting a shadow on Y!'s future viability, destabilizing the workforce and creating an uprising of shareholders) would have largely been already done.

There is no way Yang could have spun this in a favorable way and there is no way he could have prevented the damage.

And, BTW, I don't get the way the press portrayed Icahn as "activist-investor". The term "corporate raider" would seem far more appropriate.

Re:fiduciary responsibility? (1)

vertinox (846076) | more than 5 years ago | (#27041379)

If I was one of their shareholders I might have gotten pretty annoyed that they dismissed the MSFT offer out of hand the way they did. What's the future of Yahoo! without a merger?

I don't know about their current future, but I know the future of Yahoo merged with Microsoft would be short lived.

As in... If you didn't sell your shares shortly after the merger, then you would not be receiving much for your investment if you were long term seeing MS only useful option would be to dismantle the company.

Secondly, if I were an MSFT shareholder, I'd be wondering why Microsoft is purchasing a company that duplicates their own services with MS Live.

Seems like a waste of time and money to me.

Re:fiduciary responsibility? (1)

sexconker (1179573) | more than 5 years ago | (#27041637)

IS MS buys Yahoo, Yahoo dies off, and shareholders are paid off at $x ($33 was the offer) a share, which they can then turn around and invest in MS if they choose.

The reasons MS wanted Yahoo were:

Yahoo Mail
Yahoo Answers

Combining Yahoo Mail users with Hotmail users would give them the biggest piece of the e-mail pie.

Yahoo Answers is the one thing MS doesn't have an analog to, and it's one area where Yahoo beats the pants off of Google. (Yes, it's retarded and filled with morans, but that's the point - it's filled to the brim with the internet moran demographic.)

In terms of search quality, I find no real difference between google, yahoo, and live search. The only meaningful difference I've seen is that Google boosts results for local businesses and such, and the easy integration of maps.
Google plays around with search results so much though (fuck seeing a wikipedia entry in the top 3 for every single noun, just because it's wikipedia), and is a huge target for manipulation, that I often find myself searching on all 3 if I'm looking for something esoteric.

Re:fiduciary responsibility? (0)

Anonymous Coward | more than 5 years ago | (#27042887)

... a wikipedia entry in the top 3 for every single noun ...

[citation needed]

Re:fiduciary responsibility? (1)

jbengt (874751) | more than 5 years ago | (#27045923)

IS[sic] MS buys Yahoo, Yahoo dies off, and shareholders are paid off at $x ($33 was the offer) a share, which they can then turn around and invest in MS if they choose.

Not quite
The offer was more MS stock than cash, and if the merger had gone through, MS stock woud've tanked.
Really, Yahoo did Microsoft a favor by turning it down.

Re:fiduciary responsibility? (1)

Tubal-Cain (1289912) | more than 5 years ago | (#27041999)

Secondly, if I were an MSFT shareholder, I'd be wondering why Microsoft is purchasing a company that duplicates their own services with MS Live.

They acquire a completely different search ecosystem.
Not only do they get to pick-and-choose the best Y! technologies for integration into MSN, having two different portals allows for experimentation. Wondering if a new feature will be a dud or a hit? Implement it on Y!. If it falters, kill it. If it becomes the Next Big Thing, duplicate on MSN. But make your MSN implementation better. For example: offer 1 gig online drive space to Y! users... if it does well offer >1 gig on MSN (and you have more time to work out the kinks and bugs).

Re:fiduciary responsibility? (2, Informative)

DerekLyons (302214) | more than 5 years ago | (#27041735)

If I was one of their shareholders I might have gotten pretty annoyed that they dismissed the MSFT offer out of hand the way they did.

Why? Yahoo! is number two in a lot of it's business areas, but it's a solid number two and continues to perform solidly if modestly. The deal with Microsoft brought nothing to the table for Yahoo! subscribers but a short term injection of cash and a long term marriage to a company with uncertain future prospects.
 
As a Yahoo! shareholder I'm glad they fended off Microsoft.
 
 

What's the future of Yahoo! without a merger? They have a platform in the works that can pose a serious challenge to Google and secure marketshare against them or Microsoft? Didn't think so.....

Yahoo! already has a larger marketshare than either in many areas - it's portal is stable and widely used. There's more to Yahoo! than search - and it's Google who is consistently, if poorly, attempting to catch up.

Google - Yahoo Sale? (1)

foxalopex (522681) | more than 5 years ago | (#27040171)

I could be wrong but wasn't Google trying to buy Yahoo as well but got stopped by the regulators because then google would be considered too big? Nice to see that the door swings both ways. If you ask me Yahoo is the one that really got hurt in all this. I guess the lesson is never get in between two giants battling it out. ;)

Re:Google - Yahoo Sale? (5, Informative)

larry bagina (561269) | more than 5 years ago | (#27040341)

The google/yahoo deal was an advertising agreement, not a merger/acquisition.

Between Two Giants (1)

troll8901 (1397145) | more than 5 years ago | (#27042923)

... never get in between two giants battling it out. ;)

Sounds just like what I do on the toilet bowl every day.

Or what the lucky married men do every night.

Correction (4, Funny)

BlindSpot (512363) | more than 5 years ago | (#27040183)

Getting bought by one of the biggest companies in the world turns out to be a rather costly thing.

That should read "Not getting bought out..." since the deal never went through. If they had only just given in to Microsoft... then all it would have cost them is their souls.

Re:Correction (0, Troll)

nicolas.kassis (875270) | more than 5 years ago | (#27040783)

Hahahahahah dude, getting bought out cost money. It's not cheap to hire lawyers to review everything an make sure there are not issues. Oh and I guarantee that Google would have brought the merger justice dept because Microsoft is just extended it's reach again. 60% of the search market is nothing compared with 80% of the desktop market.

Re:Correction (1)

elrous0 (869638) | more than 5 years ago | (#27042629)

I'd say they lost whatever souls they had back when they started to help China [washingtonpost.com] throw journalists in prison.

That was the old CEO (1)

wombatmobile (623057) | more than 5 years ago | (#27040189)

The $79 million dollars of advice was ordered by and for the previous CEO, Jerry Yang. The new CEO, Carol Bartz, is a different kind of business person. She doesn't need $79 million dollars of advice to talk with Microsoft.

seventy-nine million dollars dollars (0, Insightful)

Anonymous Coward | more than 5 years ago | (#27040239)

The $79 million dollars...

79 = seventy-nine
$79 = seventy-nine dollars
$79 million = seventy-nine million dollars
$79 million dollars = seventy-nine million dollars dollars

Re:seventy-nine million dollars dollars (2, Insightful)

Vectronic (1221470) | more than 5 years ago | (#27040495)

$79 million dollars = Dollars seventy-nine million dollars.

$79 million dollars = Seventy-nine dollars million dollars.

$79 million dollars = Dollar sign seven nine space letter m letter i letter l... .. . . . .

$ can mean dollars, or pesos.

Who gives a fuck.

Re:seventy-nine million dollars dollars (0)

Anonymous Coward | more than 5 years ago | (#27041079)

> Who gives a fuck.

Your mom. For about $79. Pesos.

Re:seventy-nine million dollars dollars (2, Funny)

Dishevel (1105119) | more than 5 years ago | (#27041279)

> Who gives a fuck.

Your mom. For about $79. Pesos.

79 Dollars Pesos?

Re:seventy-nine million dollars dollars (0)

Anonymous Coward | more than 5 years ago | (#27041449)

'sperging nerds.

advisors (1, Funny)

Anonymous Coward | more than 5 years ago | (#27040227)

$79 million for advisors? Seriously?
I think I'm in the wrong line of work.
Can anyone explain that to me?
How can that possibly cost that much?

Re:advisors (2, Insightful)

ZeroExistenZ (721849) | more than 5 years ago | (#27040253)

How can that possibly cost that much?

Good salespeople.

Re:advisors (4, Interesting)

nacturation (646836) | more than 5 years ago | (#27040329)

If my math is correct, that's about 54 man-years at $500/hour for 8 hours a day, 365 days a year. Wow.

Re:advisors (4, Informative)

bogaboga (793279) | more than 5 years ago | (#27040477)

Not only that.

I work for a major consulting firm handling bank accounts on the west coast. Consultants are not cheap.

My company charges in excess of $350/hr on top of mileage and any extra work that may cause delay is charged at $519/hr. But again, we handle very important and sensitive data/work.

Of course I make much less and sometimes, there might not be any serious work for months.

Re:advisors (4, Funny)

Shakrai (717556) | more than 5 years ago | (#27040307)

How can that possibly cost that much?

They hired Dogbert Consulting?

Re:advisors (1)

Goffee71 (628501) | more than 5 years ago | (#27049623)

A simple "No thank you" and maybe a box of consolation chocolates would have done it!

Re:advisors (5, Funny)

larry bagina (561269) | more than 5 years ago | (#27040375)

maybe they searched for "cheap advisors" and accidentally clicked the sponsored result.

Re:advisors (2, Funny)

Anonymous Coward | more than 5 years ago | (#27040383)

I would be glad to explain it to you and guide you in your desire to switch occupations

For my trouble all I ask is the small sum of (cue Dr Evil voice) $79 million dollars

Re:advisors (2, Insightful)

Anonymous Coward | more than 5 years ago | (#27040395)

I don't know how advisors work but consultants have a simple business plan:

  • Employ clueless CS graduates for cheap.
  • Hire them to clueless company wanting software project as "consultants" for $100 per hour.
  • Profit.

The advisors probably replace "CS graduate" with "newly qualifed lawyer" and charge 10x the amount.

Profit.

Re:advisors (0)

Anonymous Coward | more than 5 years ago | (#27040483)


Can anyone explain that to me?

I'll explain it to you...for 79 million $.

Re:advisors (1)

Alphager (957739) | more than 5 years ago | (#27040729)

$79 million for advisors? Seriously? I think I'm in the wrong line of work. Can anyone explain that to me? How can that possibly cost that much?

I could tell you, but i charge 1000$/word.

Re:advisors (1)

AlXtreme (223728) | more than 5 years ago | (#27041987)

I could tell you, but i charge 1000$/word.

You owe me $80k for reading your $8000 comment, you insensitive clod!

Re:advisors (1)

Richy_T (111409) | more than 5 years ago | (#27040787)

You know, it's hard to put a price on such things...

I mean, if you're a manager using other peoples' money to make sure the blame falls on someone other than you, that is.

Way overpriced (1)

MxTxL (307166) | more than 5 years ago | (#27040875)

I have an MBA... I could have told them how to royally screw their investors for no more than $78 million...

Two thoughts for major shareholders of Yahoo (3, Insightful)

OneSmartFellow (716217) | more than 5 years ago | (#27040457)

1.) Immediately investigate Jerry Yang's connection with the "advisors".
2.) Ensure that the current CEO understands that any future "advisment" of this nature will come out of her pension.

That's $215K per day for a whole year !

Do you expect me to believe that the 100 top flight lawyers and accountants were working every day of the year on this ? Or did they just hire Accenture ?

Re:Two thoughts for major shareholders of Yahoo (1)

noc007 (633443) | more than 5 years ago | (#27040907)

They may have hired Remington.

Re:Two thoughts for major shareholders of Yahoo (1)

robthebloke (1308483) | more than 5 years ago | (#27041223)

Ah! Now I understand. Ensuring all Yahoo employees are well groomed men [remington-europe.com] wearing fuzz free suits [ciao.co.uk] doesn't come cheap!

Re:Two thoughts for major shareholders of Yahoo (1)

OneSmartFellow (716217) | more than 5 years ago | (#27044011)

Yeah, I'm lost too. I thought perhaps it was a reference to a T.V. show.

So either way MS gains ground... (1)

VinylRecords (1292374) | more than 5 years ago | (#27040465)

If MS takes Yahoo! over they succeed in their long term goal of a takeover.

If MS fails, like what happened here, there was still a short term gain for MS, as Yahoo! was 'forced' to spend $79 million on keeping MS at bay. Regardless of how people fell about Yahoo! overspending for their consultants, they still would have had to allocate some money that would have been used for other services or generating new content and ideas.

This means Yahoo! was forced to expend a significant amount of money and that they take a moderate hit in the media publicity wise as this brings up the news that Yahoo! faltered enough to have a takeover a possibility, and it shows that Yahoo! might have used erroneous amounts of funds warding off said takeover. Though perhaps any amount of money is worth it to keep MS from taking over your company.

Writer Dawn Kawamoto from CNet sums the situation up nicely:

For Yahoo, however, the true cost was much greater than just $79 million.

In the process, Yahoo founder and CEO Jerry Yang stepped down after enduring the brunt of shareholder anger and has since resumed his role as chief Yahoo. Sue Decker, who was Yahoo's president during the tumultuous year, lost out her bid to become the next CEO when Yahoo's board named former Autodesk chief Carol Bartz to oversee the troubled Internet company. And Yahoo saw an exodus of executives in June 2008.

Re:So either way MS gains ground... (3, Interesting)

nschubach (922175) | more than 5 years ago | (#27040557)

I don't know if I'd call it genius or underhanded (people jumped all over Sony for doing something similar with that one import company...) but use the legal system and costs associated with it to drive your competition out of business.

Re:So either way MS gains ground... (0)

Anonymous Coward | more than 5 years ago | (#27040573)

It costs money to fight a war.

At least the outcome was good (for now).

$79 million not terrible. (4, Interesting)

Xest (935314) | more than 5 years ago | (#27040509)

When our company took over a company worth £43mill it cost us £1mill in legal fees etc. etc. to get everything looked over and sorted out.

I think for something of Yahoo's worth, $79 million isn't massively unrealistic. I'd say it's not unreasonable either, it is to most people including me, but in the world of business I'd say it's probably not.

Still Yahoo, perhaps the most business plan challenged IT company in the last few years, turning down Micrososft, going for Google, getting told to f off by Google because of the potential for monopoly problems and then running back to Microsoft and being told to f off by Micrososft too.

Ballmer is probably laughing his arse off, they offered over the odds to pay for the company but if they had paid that much and then seen the resulting decline of it's worth due to a number of factors from Google to the financial crisis then they'd have wasted literally billions.

Re:$79 million not terrible. (0)

Anonymous Coward | more than 5 years ago | (#27047833)

Actually, that's cheap. It was reported that the failed BHP bid for Rio Tinto cost BHP 500 million AUD.

What a waste of $79 Million (0)

FadedTimes (581715) | more than 5 years ago | (#27040547)

Yahoo should have just let business happen. Being eaten by Microsoft is not always a bad thing /.'rs make it out to be.

Re:What a waste of $79 Million (0)

Anonymous Coward | more than 5 years ago | (#27040979)

It's not about "letting business happen," it's about determining whether the proposed deal is the best thing for the company. It costs money to have lawyers review legal documents at that level.

Most of that money was actually spent on... (0)

Anonymous Coward | more than 5 years ago | (#27040615)

...a pointy stick.

Typical Nonsense Slashdot Post (2, Informative)

briancarnell (94247) | more than 5 years ago | (#27040683)

Does anybody at Slashdot ever actually check *anything* before they post?

"The deal fizzled out when federal antitrust regulators said it would challenge any deal made between the two companies.""

The link is about the deal between *GOOGLE* and Yahoo!. Google != Microsoft.

The deal between Yahoo! and Microsoft fizzled out because Yang did everything he could to prevent it, not because of antitrust concerns.

Re:Typical Nonsense Slashdot Post (1)

Ninnle Labs, LLC (1486095) | more than 5 years ago | (#27041099)

I think you need to re-read the previous sentence again:

Yahoo announced that it cost them $79 million to fight off Microsoft. Most of that money was spent on advisors who examined Microsoft's proposals, and the way it would impact on Yahoo's search agreement with Google.

The italicized part is the "deal" that was referred to in the following sentence and what that linked story was about. Their investigation in how it would affect the Google deal was part of the total 79 million dollars that was spent when Microsoft made them the offer.

Re:Typical Nonsense Slashdot Post (0)

Anonymous Coward | more than 5 years ago | (#27042313)

Yes, but that search agreement didn't exist until AFTER Microsoft's proposal.

Sounds more like they are cooking the books (1)

molotovjester (1273662) | more than 5 years ago | (#27040727)

Sounds more like Yahoo is cooking the books a little bit to hide some losses, instead (creatively) funneling it into this consulting gig.

"But a loss on the balance sheet is still a loss, right"?

Not exactly, when PR and taxes are concerned.

$79 million? (1)

Nybble's Byte (321886) | more than 5 years ago | (#27040835)

Meh, that's probably less than Microsoft's annual budget for office furniture, especially chairs. Now, Google might be a different story.

$79 million for everything (3, Informative)

UnknowingFool (672806) | more than 5 years ago | (#27040925)

the increases in outsourced service provider expenses were primarily the result of incremental costs incurred in general and administrative expense of $79 million for 2008 for outside advisors related to Microsoft's proposals to acquire all or a part of the Company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defense costs.

The way I read it, there's a lot of fees rolled into one.

  • consulting to analyze the MS offer or find an alternative (Google)
  • lawyers fees once they decided to reject the offer
  • consulting and lawyers fees to fight Carl Icahn's involvement (proxy contest) into the MS-Yahoo deal when he tried to have the board replaced
  • administrative fees to set up the Google deal (a deal worth $250 million to $450 million per year would require some initial investment)
  • lawyers fees to setup the Google deal

Some of you may ask why so many lawyers. Well there a 3 separate legal issues here. Fight MS, Deal with Google, and fight Carl Icahn. You might get the same lawyers to fight MS and figure out the Google deal, but they really are different areas of the law and the large scope would mean you need more more bodies. For the proxy contest, you probably want a law firm that specializes in that.

Misleading summary (0)

Anonymous Coward | more than 5 years ago | (#27040981)

Federal regulators said they would challenge any deal between Yahoo & Google, not Yahoo & Microsoft.

136th largest (3, Informative)

dotwhynot (938895) | more than 5 years ago | (#27041275)

Getting bought by one of the biggest companies in the world turns

Microsoft is the worlds 136th largest company [cnn.com]

Re:136th largest (1)

gateep (643001) | more than 5 years ago | (#27047467)

By revenue maybe, but it looks like they're #1 in terms of profits.

Re:136th largest (1)

gateep (643001) | more than 5 years ago | (#27047481)

Nuts, i was only looking at #101-#200 - still, they're a lot higher up when ranked by profit rather than in terms of revenue.

Valuation killed the deal, not anti-trust threats (3, Insightful)

aunt_jamima_sr (668433) | more than 5 years ago | (#27041321)

> The deal fizzled out when federal antitrust regulators said it would challenge any deal made between the two companies. The way I understand it, the deal actually fizzled out because some Yahoo C-level egos couldn't agree on a valuation with Microsoft. Yahoo, whose stock currently trades for $12.60, wouldn't sell to MS for $33 / share because they felt they were worth $37 / share, and also because they are idiots. Slashdot actually covered this story at the time. [slashdot.org]

Re:Valuation killed the deal, not anti-trust threa (1)

wannabgeek (323414) | more than 5 years ago | (#27049001)

I think one thing people keep forgetting is that, the $33 is a misleading figure. Only half of the amount was in cash, and the rest in MS stock. Given the complexity of the deal involved, and the monopoly concerns (MS and Y! are big players in instant messaging and mail), the deal would have been AT LEAST a year to happen. And look at what MS price is a year after that (nearly down by 50%), so the effective price for the shareholders would have been $24-25, and not $33.

This is of course, assuming that the deal would not have changed the price of MS at all, but I think it would have negatively impacted MS because they would not be cash-rich any more, and the integration issues of such a large size are going to bog down any company.

I'm in the wrong line of work (2, Interesting)

Locke2005 (849178) | more than 5 years ago | (#27041657)

If it costs you over $70 million to figure out how being acquired by Microsoft would effect your agreements with Google, shouldn't you begin to suspect your agreements with Google are too fucking complicated? Especially when a simple Google search would tell you how Microsoft feels about Google [google.com]

Denial of service, injection (1)

SgtChaireBourne (457691) | more than 5 years ago | (#27041853)

So, on a whim, MS can
  • zap $79 million from Yahoo!'s budget
  • get multiple representatives on the board

These appear like real-life versions of a DOS and an injection attack. Along similar lines, the FAT lawsuit against TomTom looks also like a case of doing damage for that sake of damage.

Don't blame Microsoft this time (1)

wealthychef (584778) | more than 5 years ago | (#27042419)

The $79 million was not due to the size of Microsoft, as the summary implies. It was because of the size of Yahoo. A small company would not have to spend $79 million to figure out the impact of MS buying it.
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