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Yahoo May Re-Consider Google Alliance, Rebuff Microsoft

Zonk posted more than 6 years ago | from the now-the-rubberband-is-on-the-other-claw dept.

Yahoo! 273

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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273 comments

I'd be sad if Microhoo goes ahead (5, Insightful)

_merlin (160982) | more than 6 years ago | (#22287198)

Do I like Yahoo? Not really. But I don't really like Google or MS either. The less of these online service providers there are, the worse it will be for consumers. I hope Yahoo continues to exist in some form or another just so there are more players in the marketplace. That means more choice, more competition and a better experience for users.

Re:I'd be sad if Microhoo goes ahead (1)

RJBuild1088 (968537) | more than 6 years ago | (#22287254)

I agree. Microsoft has been down the monopoly path before, and it only shows that no one can win. Though I'm a fan of neither Yahoo nor Microsoft, it would ultimately hurt the industry in this merger.

Re:I'd be sad if Microhoo goes ahead (1)

Jeff DeMaagd (2015) | more than 6 years ago | (#22287392)

Are there specific reasons to not like Google?

Their (lack of) privacy policy (1, Flamebait)

_merlin (160982) | more than 6 years ago | (#22287426)

I think Google's (lack of) privacy policy is obnoxious. They basically say, "You don't pay us, so you agree we can do anything with your data." I use Google Search and Google Talk, but you won't catch me using GMail or Google Docs (or Google Apps or whatever it's called). Also, Google Maps is pretty much useless for Australia - WhereIs does a far better job, so I don't use Google Maps.

Re:Their (lack of) privacy policy (4, Interesting)

cheater512 (783349) | more than 6 years ago | (#22287554)

They handle so much data that to me it doesnt matter too much about their privacy policy.
It is impossible for them to be reading my email or anything else I wouldnt like.

Google Maps is made by Aussies you know. ;)
Its far better than WhereIs for most things although it doesnt function as a phone book.
I hate WhereIs's UI.

Re:Their (lack of) privacy policy (1, Interesting)

Anonymous Coward | more than 6 years ago | (#22287710)

Data mining. Profiling. You don't need to personally "read" your emails to do that.

Re:Their (lack of) privacy policy (4, Insightful)

slyn (1111419) | more than 6 years ago | (#22287966)

I've always wondered, what exactly does/would Google get out of doing that? I use Gmail. If Google data mined my mail, they would get nothing. I don't use email with my friends (i'm in the age bracket that doesn't use email according to that one semi-recent /. article) so all my mail is either from colleges or "click this link" forum activation mail. In theory, the real data worth mining would be either of my parent's as both of them run their own businesses. However, what can they do with the data? Mine it so they can show targeted ad's to them for Quickbooks or Lexus-Nexus or whatever? Oh wait, they already do. Seriously, unless your dating Larry/Sergey/Eric's Ex, why would they ever care to look through your mail?

Re:I'd be sad if Microhoo goes ahead (2, Insightful)

milsoRgen (1016505) | more than 6 years ago | (#22287766)

Well yes, there's already a reason to dislike the dominant player in any given field. People root for the under dogs you know?

Re:I'd be sad if Microhoo goes ahead (0)

Anonymous Coward | more than 6 years ago | (#22287506)

Better if Yahoo merge with Google [kanati.com.ph]

Re:I'd be sad if Microhoo goes ahead (0, Offtopic)

SiggyTheViking (890997) | more than 6 years ago | (#22287514)

Boy, howdy, you're about like a fart in church.
None the less, you do offer a ray of hope, and I agree.
More competition is better.
I, however, am a YUI fan.
Cheers,
Siggy

undervalues? (2, Insightful)

larry bagina (561269) | more than 6 years ago | (#22287202)

Last I checked, $31 is greater than $12.

Re:undervalues? (3, Insightful)

_merlin (160982) | more than 6 years ago | (#22287214)

Well, they obviously don't believe the share price represents the value of the company. No-one accepts a takeover at the current market price for shares. But think about it this way: suppose you had shares in Yahoo: you could take $31 for them now, or hold on to them so you can profit from shareholder dividends, and possibly sell them for much more later, too.

Re:undervalues? (3, Insightful)

Vvaghel1 (1008177) | more than 6 years ago | (#22287292)

first of all, stock prices are a measure of a company's future profitability, or i should say expected profitability. Second of all, measuring expected future profitability is a judgement call, not an exact science i'm not surprised, i figured this was somewhat the case when i heard the story

Re:undervalues? (4, Insightful)

Joe Decker (3806) | more than 6 years ago | (#22287372)

Well, they obviously don't believe the share price represents the value of the company.

So, they could buy the stock for $12, thought it was worth more than $31, and weren't buying more?

I find their lack of faith ... or honesty ... or something ... disturbing.

Re:undervalues? (2, Informative)

larry bagina (561269) | more than 6 years ago | (#22287488)

Microsoft offered $31/share for a stock that was trading at $18 (not $12, my bad)/share. With the recent layoffs, declining profit, being bought looks pretty good.

Re:undervalues? (1)

falconwolf (725481) | more than 6 years ago | (#22287808)

Microsoft offered $31/share for a stock that was trading at $18 (not $12, my bad)/share. With the recent layoffs, declining profit, being bought looks pretty good.

However financial analysts have valued Yahoo! at $38 or $39 a share. If so MS's $31 is undervaluing the stock.

Falcon

Chairs wheres my CHAIRS!!! (1)

dpeltzm1 (706854) | more than 6 years ago | (#22287280)

Ballmer is gonna absolutely lose it when he reads this news ,
  maybe investing in officemax,staples,etc.
(whichever is brave enough to deliver to his office!)
would be a wiser bet? at least for us poor /dotters? ;-)

Lame chair joke (0)

Bill, Shooter of Bul (629286) | more than 6 years ago | (#22287530)

Sorry, they are all lame. Besides, everyone knows the interns have a woodshop ...

No, can't complete joke. Still lame. Not funny. No chair jokes have ever, can ever, or will ever be funny. Stop insulting our humor glands!

Re:Lame chair joke (5, Funny)

gaderael (1081429) | more than 6 years ago | (#22287784)

Sorry, they are all lame. Besides, everyone knows the interns have a woodshop ...
No, can't complete joke. Still lame. Not funny. No chair jokes have ever, can ever, or will ever be funny. Stop insulting our humor glands!

Relax. Pull up a chair.

microyahoogle (1)

Captain Splendid (673276) | more than 6 years ago | (#22287210)

Crunch is coming, and Yahoo is going under one way or another. The current tack to Google is only to squeeze out a little more cash from the deal.

Google don't want 'em, what exactly would they be acquiring? Whereas, depending on the attendant levels of asshattery involved, MS/Yahoo could be better than a disaster.

Re:microyahoogle (1)

Vellmont (569020) | more than 6 years ago | (#22287308)


Crunch is coming, and Yahoo is going under one way or another.

Why? I don't find Yahoo useful, but I also don't find MTV useful either. Is Yahoo losing money, or losing business? They don't have the cachet of Google of course, but they're a more established portal site.

Not being "the next big thing" doesn't mean death. Yahoo has a MUCH better position than say Facebook, or MySpace, who could be gone tomorrow, and no one would really care.

Re:microyahoogle (1)

oldhack (1037484) | more than 6 years ago | (#22287366)

I agree. MS is going to the shareholders, not the management. If I was a shareholder, I'd take MS offer in a second (cash, of course, not share swap). Yahoo's been doing mediocre for years now, before and after the return of Jerry Yang, and is not presenting any plausible growth plan, with/without Google alliance. This is only good for trying to squeeze extra in the MS offer. Not gonna work either - +50% premium is pretty damn big, especially when the economy and ad revenue along are expected to slow down.

Re:microyahoogle (4, Insightful)

Penguinisto (415985) | more than 6 years ago | (#22287520)

At first blush, your post is plausible... but I wouldn't be so certain ab't Yahoo's future prospects. This is the same company that managed to survive the dot-bust in spite of really not being supposed to.

They're #3, but like Google, they came by that position honestly (MSN got to its slot by 'dint of default'). It may be anecdotal, but Yahoo has a lot of income that comes in from places that you and I may find unlikely. They also have a rather solid set of services that 1) doesn't require Windows or a Passport Account, and 2) is relatively uncluttered and straightforward when compared to MSN. When it comes to non-search functions, Yahoo is actually IMHO better than Google in a lot of areas, simply because those areas don't have that 'beta' feel to it that Google sometimes does, or that 'we require possession of your soul before installing this' feel that the MSN does (e.g. messenger services*).

While I pretty much use Google for most of my stuff nowadays, There is still Yahoo Finance, among a bucket of little things that make it useful to me.

This is just anecdotal, but I know I'm not alone, and Yahoo does have a large and loyal following. I could see them diminish over time perhaps, but not necessarily die off.

/P

* I use Pidgin everywhere now, but long ago, my Mac wound up with MSN and Yahoo Messenger on it due to social and work demands... and GAIM wasn't IMHO a viable option there.

Re:microyahoogle (1)

falconwolf (725481) | more than 6 years ago | (#22287974)

and 2) is relatively uncluttered and straightforward when compared to MSN.

Check out Live.com [live.com], Microsoft's new search engine.

Yahoo is actually IMHO better than Google in a lot of areas

Except as a portal and the Yahoo! Groups, I'm a member of some groups, I think Yahoo! isn't as good as Google. Of course I don't know about Gmail. But for search and as a directory I think Google is better.

Falcon

Google acquiring Yahoo! (1)

falconwolf (725481) | more than 6 years ago | (#22287884)

Crunch is coming, and Yahoo is going under one way or another. The current tack to Google is only to squeeze out a little more cash from the deal.

Google don't want 'em, what exactly would they be acquiring?

Well considering Yahoo! was one of Google's Angel investors [wikipedia.org] before the Google IPO, there ma be a good reason for Google to help Yahoo!

Falcon

Re:microyahoogle (1)

Kamokazi (1080091) | more than 6 years ago | (#22287930)

Yahoo is still fairly dominant in many Asian markets...and there are a lot of people in those markets. A lot of people are getting internet access there that never had it before, it's going to grow substantially over the next five years, unlike the US and European markets. Google could use Yahoo just as much as Microsoft.

You want to know what Google would be acquiring? (2, Interesting)

RavenLrD20k (311488) | more than 6 years ago | (#22288000)

The exact same thing that Microsoft would be acquiring. Granted it would be more of a benefit to Microsoft than to Google at this stage in the game, but who wouldn't want the #1 Website ranked in the world? [alexa.com]. MSN had the position for the first half of 2007, but now they're crashing hard, and they never could beat out yahoo in the five years before that. Now the question is this: Which would you rather see, MSN fall further from the #5 slot, or Microsoft acquire Yahoo and be in control of the current #1 position?

Granted, M$ takes control of Yahoo, it's probably not going to be #1 for much longer (I know I'd be dropping my Yahoo mail accounts and probably joining my wife on Gmail), but since when do investors care what's going to happen, they want immediate returns on investment. And having their company say "We just bought the #1 spot" sounds real good to stupid masses with money to burn.

But then, that's just my $0.02USD (has the Peso out-done us yet on the conversion rate?)

What's in it for Google? (5, Insightful)

EmbeddedJanitor (597831) | more than 6 years ago | (#22287222)

Google has 4 times the search hits of yahoo and is growing. Why spend 45bn on a sinking enemy? Just wait a year or two and yahoo will be no more anyway. MS + yahoo are individually sinking in the service space and together they'll just sink faster. Sure Google must make some anti-trust grumblings, but in reality they must love the sight of their worst competitors sinking eachother.

Google can use the 45bn in far better ways by cutting into new markets & technologies (eg. Android).

Re:What's in it for Google? (0, Troll)

Crizp (216129) | more than 6 years ago | (#22287258)

this is the truth, right above here.

But the gPhone better think about non-USians and have HSDPA -- or _at least_ UMTS.

Re:What's in it for Google? (1)

Crizp (216129) | more than 6 years ago | (#22287276)

or it will tank, I mean. 'cause people won't be buying it for the design alone, as with the iPhone. Coming out with a business phone without 3G(+) is insane.

Re:What's in it for Google? (1)

Zach978 (98911) | more than 6 years ago | (#22287402)

It's just software...there will be lots of gphones (probably 3 or more this year), so you should be able to find one that works for you...

Re:What's in it for Google? (3, Interesting)

ScrewMaster (602015) | more than 6 years ago | (#22287282)

The interesting thing is going to be whether Google successfully monetizes technological forays outside their core competence. Microsoft has been trying for decades to come up with a major moneymaker other than the Windows/Office duo and has largely failed.

Re:What's in it for Google? (3, Informative)

EmbeddedJanitor (597831) | more than 6 years ago | (#22287344)

Android is not really a seperate venture. It mainly facilitates extending their core business into mobile space so that your whole Google existance can fit in your pocket meaning more searches and uses of Google services --> more Google business.

This is very different from MS doing, say, Zune or MSN. In both the MS cases these are independent strategies that have no synergy with Windows or Office (ie. Windows and Office don't really benefit from Xbox and MSN).

Re:What's in it for Google? (1)

Amorymeltzer (1213818) | more than 6 years ago | (#22287568)

That's one of the reason why Google has been so successful. Instead of saying "Let's make an mp3 player now that the market is owned by our competitor" or some such, they asked themselves the logical progression of their current service. They made life easier, better, and more convenient for their users. They slowly expanded while never stepping, but always pushing, out of their comfort zone.

Re:What's in it for Google? (1)

jo42 (227475) | more than 6 years ago | (#22287676)

Google's core revenue generating business is not search, nor email, nor online apps, it is advertising. Google uses the revenue from advertising to give away all the other services - this is truly evil because it makes it impossible to compete with them. If Google's advertising revenue dried up, absolutely everything would blow away in the dust.

Re:What's in it for Google? (5, Insightful)

Amorymeltzer (1213818) | more than 6 years ago | (#22287334)

Yahoo is ANYTHING but sinking. Yahoo.com is still the number one most visited site on the web (check alexa [alexa.com]). Now, Google happens to be number two, followed by youtube. Who in their right mind wouldn't want the top three websites? I'D shell out $45B if I had it.

Not that it would happen, but imagine if Google acquired Yahoo. They'd have vast resources of hardware and user accounts at their dispense - two things that Google especially wouldn't mind having. A merger between Yahoo and Google groups? News? Oh, and did I mention they're the number one site on the web?!

A more likely option, avoiding the anti-trust nonsense, would be Google purchasing some stock in Yahoo, or the two coming to some sort of mutual agreement such that Yahoo can consolidate and focus funds and Google gets some new toy.

By no means is it a dumb idea for either of them. The only person who loses is Microsoft, and I think everyone can agree that's an acceptable loss.

Check your stats (5, Informative)

EmbeddedJanitor (597831) | more than 6 years ago | (#22287406)

http://www.alexa.com/data/details/traffic_details/yahoo.com [alexa.com]

Google and yahoo are neck and neck (with google slightly ahead for the last while). That gives google 1 & 3, or 50% vs 30% if you combine youtube + google.

Now look at http://finance.yahoo.com/q/bc?s=YHOO&t=2y&l=on&z=m&q=l&c=GOOG [yahoo.com]

Yahoo on the way down and Google (relatively) up.

Sure, Google could buy Yahoo for a quick rush, but in the longer term (1-2 years) yahoo will just fade by themselves unless they do something very interesting (which they have not done in a long time).

Re:Check your stats (4, Interesting)

Amorymeltzer (1213818) | more than 6 years ago | (#22287550)

Ambiguous graph aside, alexa still ranks yahoo.com number one. Over the past three months, yahoo beats google by 0.5% of the internet population. Digging through the info pages on both, Yahoo has twice the page views for each individual user. Putting together equivalent users with twice the page views is probably why Yahoo is ranked number 1 and Google number 2 over the past three months (1 and 4 for a week and 42 and 53 for yesterday). As far as my math goes, it seems that an ad on Yahoo would get seen on average twice more than one on Google.

Can't argue with stocks, but Yahoo's never been good with making money - Google and Microsoft are. Yahoo is good because it's got controlling stakes in instant messaging and an enormous amount of people backing them and their community. If you can get any sort of money earner on those pages, that finance page won't count for shit.

(I'd also like to point out you had to link to yahoo for that page)

Re:Check your stats (2, Insightful)

Lehk228 (705449) | more than 6 years ago | (#22287870)

remember, those numbers are not "of the internet population" it's "of the internet population infected with alexa toolbar"

and the more savvy uninfected users are more likely to do serious business over the internet.

Re:What's in it for Google? (1)

OakLEE (91103) | more than 6 years ago | (#22287666)

Yahoo's clicks and page view may be high, but unlike Google they have failed to turn that into corresponding ad revenue, which significantly hampers their top and bottom line. In that sense they are not sinking so much as slowly falling behind Google. I'd analogize it to the Detroit Automakers versus the Japanese ones back in the late 1970s and early 1980s. They weren't doing bad, but they were not doing enough to maintain their lead over the Japanese. The automakers did that out of shear arrogance, and while I don't think Yahoo is as arrogant as they were, I get the sense from some of my friends working there that they are a lot smugger than they should be. For example, they were shocked at the new of job cuts, which is something anyone objectively following the company saw coming due to its declining profit margins.

As for a Yahoo-Google merger, I don't really think the *buzzword* synergies match up. Yahoo is a content producer. They make a lot of their money off of things like fantasy sports leagues, and revenue from their various blogs. Google on the other hand is a content aggregator and makes all of its money off of collecting and organizing other people's content. While they share things in common like email, groups, and stock quotes (Yahoo's financial section is by far one of the best free ones out there), the company's operate off two different strategies, and unless Google wants to get into content generation a straight out merger makes not sense whatsoever. If however you split off (i.e., fire) the content generation section and just take the technology though I think to a Google, buying Yahoo makes sense. After all, that's basically what Microsoft is after in my opinion.

Your right on anti-trust though. The DOJ will have a field day with this one just like they are having with the Sirius-XM deal. IMO, neither of these would be worse for the market than all of the oil company consolidation we saw at the turn of the century.

But make no mistake, Microsoft needs Yahoo more than Google needs Yahoo.

Re:What's in it for Google? (1, Informative)

Anonymous Coward | more than 6 years ago | (#22287674)

Funnily enough, Alexa gives a rank by 3 month average - Google.com really overtook Yahoo.com a few weeks ago and is only going up, yahoo is only going down. Wait a few weeks and the position will surely reverse (look at the graphs if you don't believe me).

Number one in browser hijacks... (1)

Joce640k (829181) | more than 6 years ago | (#22287754)

I've seen how most of those "hits" happen.

A user opens their browser and says "damn, why does that page always come up?" before navigating away from it.

Re:What's in it for Google? (1)

HisMother (413313) | more than 6 years ago | (#22287764)

> Yahoo.com is still the number one most visited site on the web (check alexa [alexa.com]) Alexa only tells you the ranking among [i]asshats who install the Alexa toolbar.[/i] For this reasosn, their numbers aren't worth the electrons they're printed on.

could be useful in a few ways (2, Interesting)

Trepidity (597) | more than 6 years ago | (#22287412)

Yahoo Mail has many more users than Gmail, and tends to have a more mass-market (less techie) demographic, especially if you consider Yahoo Groups sort of related. Yahoo Messenger is of course orders of magnitude more popular than Google Talk.

Re:What's in it for Google? (1)

Ambidisastrous (964023) | more than 6 years ago | (#22287664)

Google has 4 times the search hits of yahoo and is growing.
The breakdown of search hits reported by comScore is:
    52.6% Google sites
    26.9% Yahoo sites
    10.4% Microsoft sites

In the article, it says Google has 75% of the worldwide search revenue, and awkwardly implies that Microsoft and Yahoo take another 20% together. Elsewhere, I've seen that in terms of unique visitors, Google is only slightly higher than MS. Together, I think these numbers mean:
- Google is much better than MS and Yahoo at converting searches into money
- Lots of people have Yahoo or MSN as their startup page but don't do searches from there
- Either Yahoo and MSN users don't know how to do online searches (unlikely), or a large number of them use Google for searches despite having a search box already on their homepage

Incidentally, Google's stock price fell when the bid was announced, so investors (note that Yahoo Finance is a pretty definitive hub for market info) don't see Yahoo as a lead balloon currently. That doesn't mean it isn't a lead balloon (given that its stock price was $18 and the article values the company's assets at $39-45 a share), but if the two companies merge they'll float along on investor money for awhile regardless.

Re:What's in it for Google? (1)

DerekLyons (302214) | more than 6 years ago | (#22287978)

Google has 4 times the search hits of yahoo and is growing. Why spend 45bn on a sinking enemy?

Probably the huge number of users that Yahoo! has that Google doesn't. Yahoo! isn't a search company, and hasn't been for years - they are a portal, pretty much the only one to thrive. (And they are far from sinking.) Google isn't a search company, they are an ad agency.
 
You do the math.

some other company (4, Interesting)

FudRucker (866063) | more than 6 years ago | (#22287262)

too bad TimeWarner or CNN or some other big media company could not bail yahoo out, i rather see something like that than for microsoft getting their dirty paws on them...

Re:some other company (4, Insightful)

OakLEE (91103) | more than 6 years ago | (#22287570)

Oh you mean like this [cnn.com]? Yah I think we've seen that one played out before and it didn't end well for the big media company. And just remember, AOL merged at its peak, Yahoo has clearly seen better days.

Re:some other company (1)

The Analog Kid (565327) | more than 6 years ago | (#22287612)

too bad TimeWarner or CNN or some other big media company could not bail yahoo out, i rather see something like that than for microsoft getting their dirty paws on them...

CNN is owned by TimeWarner.

What does Yahoo do exactly, that gives them worth? (2, Interesting)

urbanriot (924981) | more than 6 years ago | (#22287266)

Yahoo thinks they're worth more than $44.6 billion? What exactly does yahoo do, or own, that makes money?

Re:What does Yahoo do exactly, that gives them wor (4, Insightful)

protohiro1 (590732) | more than 6 years ago | (#22287364)

500 million users. $3.75 billion a year in profit. Market cap of $40 billion.

Re:What does Yahoo do exactly, that gives them wor (4, Insightful)

timmarhy (659436) | more than 6 years ago | (#22287416)

i have to wonder about figures like that. 500 million users might be every account ever created, i bet there's 1/50 of those that are active.

i have a sneaking suspicion there is another smaller .com bubble forming. especially when yahoo start talking about being under valued at 44 billion.

Re:What does Yahoo do exactly, that gives them wor (3, Insightful)

Telvin_3d (855514) | more than 6 years ago | (#22287704)

Well, I'd agree that many of those accounts are no longer active. On the other hand, I suspect that all that personal information sitting in those dead accounts is worth quite a bit to some people. Page views is not the only way to make money.

Re:What does Yahoo do exactly, that gives them wor (2, Informative)

OakLEE (91103) | more than 6 years ago | (#22287708)

500 million users might be every account ever created


Remember Yahoo isn't just used in the US, it has international versions as well. There's six billion people in the world and probably over 2 billion have regular internet access by now (my guess, no source). 25% of internet users using Yahoo regularly is not a stretch of the imagination by any means.

i have a sneaking suspicion there is another smaller .com bubble forming


Not really, remember the first dot-com bubble was caused by people trying to value companies that produced no profit and used business model's no one had ever tried out before. (My favorite was pets.com which insisted on selling most of its merchandise at below cost. Genius move guys!) It's been over 10 years since then and company's have figured out how to make money online, which makes valuing the price of their stock much easier.

You're right in thinking Yahoo's vision of themselves is inflated though. Remember their market cap was about 2/3 of what it is now before the bid, and that's right about were they belong given management's horrendous execution.

I shouldnt dignify this with a response... (1)

keepper (24317) | more than 6 years ago | (#22287732)

But, i'll bite. I like feeding the idiots/trolls.

12 billion dollars in cash and off US investments.
close to 7 billion in revenue yearly.

This doesnt include their assets in the US, buildings, technology, etc. EASILY worth OVER 20-30 billion.

So, again, do you get why its undervalued?

Microsoft was willing to pay 80Bill for yahoo in 05/06. Now they feel they are getting the bargain of the century. Yahoo may not be doing as good as golden child google, but its by no mean a slouch.

Yeah Yeah Yeah Just trying to get the bid up (4, Interesting)

olddoc (152678) | more than 6 years ago | (#22287272)

Yahoo is just acting like this in order to get a higher price from MS.
Google + Yahoo! wouldn't fly with the antitrust regulators.

Re:Yeah Yeah Yeah Just trying to get the bid up (2, Interesting)

Vvaghel1 (1008177) | more than 6 years ago | (#22287328)

i doubt they would have to buy a big stake in yahoo, just enough to keep microsoft out. They could even make it where google had no voting rights or any influence, i hear thats the raw deals middle eastern companies get when they invest in the likes of stock exchanges and other large western companies. should settle any qualms antitrust regulators have

Re:Yeah Yeah Yeah Just trying to get the bid up (4, Insightful)

Jeff DeMaagd (2015) | more than 6 years ago | (#22287448)

Google + Yahoo! wouldn't fly with the antitrust regulators.

And they would automatically let Yahoo! + MS through?

It might, actually (1)

Sycraft-fu (314770) | more than 6 years ago | (#22287682)

Believe it or not, Windows Live Search is used quite a bit. I think it is large enough to stave off any anti-trust complaints. I agree this is just a bluff on their part for pricing, however I do think they could honestly merge with Google if they wanted to. You aren't a monopoly if there's another big player in the market.

Re:Yeah Yeah Yeah Just trying to get the bid up (1)

stefanlasiewski (63134) | more than 6 years ago | (#22287724)

Google + Yahoo! wouldn't fly with the antitrust regulators.

Yahoo is looking at an alliance with Google, not a merger. Antitrust regulators don't have much power over two companies entering a business agreement.

just jacking up the price (4, Insightful)

wannasleep (668379) | more than 6 years ago | (#22287304)

They are just jacking up the price. The company will be sold. Once a company is in play, it is very hard to take it off the market.
Once the directors receive an offer, it is their duty to figure out whether their shareholders are better off with Yahoo alone or not. If they figure out that it is better selling (I am sure they did already), it is their obligation under current Delaware law to auction the company. That's exactly what they are doing. There isn't a single transaction that closes at the starting price.
If the directors decide that it is better going alone, it will end up with a Proxy fight and a lot of lawsuits (those will happen anyway)
Right now, arbitrageurs are going long on Yahoo and short on MS.

Re:just jacking up the price (5, Interesting)

cookedchicken01 (1232626) | more than 6 years ago | (#22287700)

They are just jacking up the price. The company will be sold. Once a company is in play, it is very hard to take it off the market.

Once the directors receive an offer, it is their duty to figure out whether their shareholders are better off with Yahoo alone or not. If they figure out that it is better selling (I am sure they did already), it is their obligation under current Delaware law to auction the company. That's exactly what they are doing. There isn't a single transaction that closes at the starting price.

If the directors decide that it is better going alone, it will end up with a Proxy fight and a lot of lawsuits (those will happen anyway)

Right now, arbitrageurs are going long on Yahoo and short on MS.
I really doubt this. They are not doing this just to jack up the price, I really think they are trying to avoid the takeover and are taking steps to try and defend themselves. This is a classic hostile takeover defense strategy. I'm pretty sure Yahoo! doesn't want to be acquired or merged with Microsoft. This takeover attempt was obviously hostile. Yahoo! has rebuffed Microsoft according to reports for a year. Do you really think a Stanford guy like Yang wants to see his life's work swollowed up by "the borg." There only chance to avoid the takeover is to find a white-knight like Google who can bail them out:

From: http://investment.suite101.com/article.cfm/posttakeover_defense_strategies [suite101.com]

White Knight and White Squire Techniques

Employing a white knight defense is often the best solution available
to target companies. It involves finding a third party, a white
knight, that a target company can partner with and which is considered
a good strategic fit with the target. Finding such a white knight can
result in justifying higher market capitalization of the target and
making it more difficult/expensive for an acquirer to go through with
the bid.

Finally, a white squire defense involves finding a friendly and
strategically suitable third party to buy a considerable minority
holding in the target company that could be sufficient to block a
hostile takeover without selling any of the crown jewels, selling of
the entire company, or making any foolish counter bids.

Hype on something unlikely to happen... (4, Insightful)

webword (82711) | more than 6 years ago | (#22287348)

From the article...

"Few natural bidders exist beside Google
that could engage in a bidding war, and
Google would be unlikely to win approval
from antitrust regulators, some Wall Street
analysts said on Friday."

So, um, it's not likely to happen.

** Yawn **

It's safe to move along.

Yahoo is popular outside of the US (5, Informative)

kylehase (982334) | more than 6 years ago | (#22287382)

Here in Japan Yahoo is huge. Yahoo is the default portal for many Japanese on their computer and mobile browsers, in fact all Softbank (formerly Vodafone in Japan) phones don't have an Internet button but instead a Y! button. Unlike Americans who favor simplistic websites with lots of space for easy readability, Japanese tend to like cluttered pages with noisy interfaces [yahoo.co.jp]. Perhaps it reminds them of the crowded streets and electronic billboards in Shibuya.

Yahoo is also an ISP in Japan with a rather large penetration.

Re:Yahoo is popular outside of the US (2, Funny)

Anonymous Coward | more than 6 years ago | (#22287518)

Yahoo is also an ISP in Japan with a rather large penetration

ahah! their popularity is explained.

Re:Yahoo is popular outside of the US (0)

Anonymous Coward | more than 6 years ago | (#22287534)

Thanks for using the keyword "penetration". That's why the mods here are interested in the post.

Re:Yahoo is popular outside of the US (0)

Anonymous Coward | more than 6 years ago | (#22287540)

Yahoo is also an ISP in Japan with a rather large penetration.
Really!

Re:Yahoo is popular outside of the US (0)

Anonymous Coward | more than 6 years ago | (#22287628)

Yahoo Japan is a separate company, the aforementioned Softbank is the main shareholder. Yahoo being taken over will not directly affect Yahoo Japan, though the new owner will end up with some shares in Yahoo Japan.

Re:Yahoo is popular outside of the US (0)

Anonymous Coward | more than 6 years ago | (#22287776)

Yahoo is also an ISP in Japan with a rather large penetration.

Ewww... I did *not* need that mental image.

Google? No way. (4, Interesting)

rudy_wayne (414635) | more than 6 years ago | (#22287394)

Over the past 3 months, Yahoo's stock has been dropping like a rock -- from $33 to $19. It jumped back up to $28 after the Microsoft takeover announcement, but that just means Microsoft will have to kick in another couple billion to get the deal through.

And it also means that Google would have to pay *EVEN MORE* than that in order to make a better offer than Microsoft. Why would Google spend $46+ Billion just to buy a competitor who is sinking fast? Just doesn't make sense. Google has a lot of money, but I doubt they're willing to spend *THAT MUCH* just to piss off Microsoft.

Are they kidding? (1)

DesScorp (410532) | more than 6 years ago | (#22287404)

"At $31 a share, Yahoo believes the bid undervalues the company, two sources said."

Undervalued? Do they really believe that? Or is that just negotiation strategy, because Microsoft offered much more per share than what the stock was going for.

Re:Are they kidding? (3, Informative)

TubeSteak (669689) | more than 6 years ago | (#22287446)

Undervalued? Do they really believe that? Or is that just negotiation strategy, because Microsoft offered much more per share than what the stock was going for.
When they say "undervalued" it usually means "the company is worth more than [offer], in assets alone & we could get more money if we chopped Yahoo! up and sold it off piecemeal"

Re:Are they kidding? (1)

Apu (325126) | more than 6 years ago | (#22287548)

Its certainly possible they believe it. Think of the breakup value of the company, not the current stock price.

Yahoo is a lot more than a search engine. In fact, for those that remember Yahoo back when it had a stanford.edu URL, it was intended to be an Internet directory not search engine. Sites were added manually, categorized, etc. not crawled.

But now there is Yahoo Mail, Yahoo Groups, and Yahoo Messenger which are all (individually) very popular in their respective fields. And there is Yahoo Stores which tons of small businesses use to run their online operations -- my company does consulting for one (in-house systems maintenance) that easily moves millions of dollars of merchandise each year exclusively through a Yahoo store.

Short-term, $46 billion might look nice. But there is a lot more to Yahoo and the Board can certainly consider the long-term as well as other options, internal or external. Remember, this is not the first offer from Microsoft they turned down; Microsoft just went public this time trying to force their hand.

Yahoo Need Microsoft (2, Interesting)

hotcalsun (1052190) | more than 6 years ago | (#22287454)

Whether or not Yahoo! knows it -- they need Microsoft. They've been bleeding the last several years with missteps and delays with Panama. Let me see if the DOJ would approve a deal that would give a 90%+ search engine monopoly to Google. Doubt it. Microsoft like it or not is the best option for Yahoo!

Re:Yahoo Need Microsoft (2, Insightful)

Amorymeltzer (1213818) | more than 6 years ago | (#22287576)

As ars [arstechnica.com] said, "Combining two companies that are losing market share doesn't guarantee that the trend will be reversed." Yahoo needs a better game plan, and a way to generate money from their portal. That they can do all on their own.

Re:Yahoo Need Microsoft (1)

hotcalsun (1052190) | more than 6 years ago | (#22287608)

Just because we quote someone else, does not make it so. Yahoo! has been trying to reverse the trend the last 4 years. Jerry Yang has been back for almost 2. At some point you really need to shake things up. This is the best shot Yahoo! has, like it or not.

Re:Yahoo Need Microsoft (0)

Anonymous Coward | more than 6 years ago | (#22287762)

Two years isn't nearly enough time to reverse the damage that Terry Semel did. Google isn't the answer, and Microsoft DEFINITELY is not the answer. This is a hostile takeover and Yahoo is doing everything it can to get it's stock up above a price that MS could bludgeon it's way through the front doors.

Timing of the bid (2, Interesting)

Fractal Dice (696349) | more than 6 years ago | (#22287490)

This is interesting given the timing of the Microsoft bid and the state of the wireless auction. Could Microsoft have waited until they believed Google had committed its resources to a spectrum bid before making a move to take Yahoo?

Re:Timing of the bid (1)

customiser (150740) | more than 6 years ago | (#22287648)

Although your idea is intriguing, I think in such cases the simplest explanation is probably the one closest to the truth. Yahoo had just announced lackluster results and their stock price was considerably lower than even a couple of months ago. It was great timing from Microsoft that allowed them to offer a significant premium to the price the stock was trading at. Anyway, as others mentioned before, a merger between Google and Yahoo would probably be blocked on anti-trust grounds.

Re:Timing of the bid (5, Interesting)

cookedchicken01 (1232626) | more than 6 years ago | (#22287650)

Did anyone else find it funny that the bid also came the day after the DOJ stopped its oversight over all but one area of Microsoft's business practices? Unfortunately, slashdot and others reported it like the DOJ actually extended some kind of meaningful oversight, but in truth, just the opposite. "The US Department of Justice has extended its anti-trust oversight of Microsoft by two years. This only applies to the requirement that Microsoft make protocol documentation available to competitors, though. All of the other requirements have expired, and Judge Colleen Kollar-Kotelly did not give the states complaining the full five years of oversight they requested."

I have an idea (-1)

Anonymous Coward | more than 6 years ago | (#22287532)

Exxon-Mobil recently made enough profit to just about buy Yahoo! at Microsoft's offering price. Maybe Exxon-Mobil should buy Yahoo!. Then Exxon will have access to a lot of free advertising, and Yahoo! will have all the energy it ever needs.

Just a thought.

cough Zimbra cough alternative cough (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22287542)

Where is the Exchange/groupware killer the FOSS zealots were bragging about a couple of years ago?
Not that Zimbra was it, but it had some potential.

Goggle (0)

Anonymous Coward | more than 6 years ago | (#22287544)

I keep hearing about this Goggle search thing. Where might I find it?

Why is there this weird "above/below" moderation thingy on Slashdot now? Is this the "innovation" Microsoft keeps talking about?

A dose of reality (2, Insightful)

wonderdogger (1231610) | more than 6 years ago | (#22287574)

You know - the thing that bugs me most about the tech crowd is when I compare what I hear the real world's opinion of the competitive framework with what users on rags like Slashdot have to say. It is an incredibly huge gulf. It makes the tech community look hopelessly naive and biased.

I am a postgrad of competition law right now so I know quite a lot about it. Firstly, the real world doesn't believe Microsoft is any more or less evil than any other monopoly - past or present. In fact the opposite is more likely to be true. All of the conduct ultimately condemned by the courts (primarily restrictive licensing practices) were instigated by people who have since left the company. Further, Microsoft is now under close scrutiny by the US and EU authorities.

Google on the other hand is not.

One thing the shapers of modern competition law understood (yes these issues were thought about long before any of us were born) was that lasting unregulated monopolies are inevitably harmful to consumers. Google might have the right spirit of innovation and openness at the moment but one day working for Google won't be sexy anymore, an innovative culture will be harder to nurture and Google shareholders will still demand that Google returns a profit. The next best thing to innovation is infrastructural lock-in like what Microsoft (and Bell, IBM etc) have achieved. Which means the company can earn ongoing monopoly rents with minimal ongoing investment.

Best way to prevent this inevitable evil? Force the infrastructure to become a shared resource of multiple companies by making it economically less efficient for all of them not to inter-operate. If competition doesn't achieve this, the regulators will and history has shown that regulation of monopolies often leads to even worse effects than the alternative.

Re:A dose of reality (4, Insightful)

ZombieRoboNinja (905329) | more than 6 years ago | (#22287690)

>>Best way to prevent this inevitable evil? Force the infrastructure to become a shared resource of multiple companies by making it economically less efficient for all of them not to inter-operate.

Fortunately, part of Google's current "sexiness" comes from them embracing various standards and open-source projects that allow them to "interoperate", whereas Microsoft famously tries to hold on to its "infrastructural lock-in" with stuff like MS Office document formats and file-system formats.

Re:A dose of reality (1)

cookedchicken01 (1232626) | more than 6 years ago | (#22287746)

All of the conduct ultimately condemned by the courts...were instigated by people who have since left the company.
LOL You got a dose of something, but it certainly isn't reality.

Re: A dose of reality indeed (4, Informative)

Anonymous Coward | more than 6 years ago | (#22287882)

I don't think you understand what Google does. Your post infers that you see it as a technology company (you used the words innovation and openness, then go on to use the term "infrastructural lock-in like..." followed by "inter-operate" in the final paragraph). But in reality, Google is, at the moment, an advertising company that just so happens to specialize in technology... From Wiki:

"Most of Google's revenue is derived from advertising programs. For the 2006 fiscal year, the company reported US$10.492 billion in total advertising revenues and only US$112 million in licensing and other revenues."
-http://en.wikipedia.org/wiki/Google

So, I congratulate you on being a postgrad of competition law, but knowledge of the law doesn't mean anything if you don't understand the subject that you are trying to apply it to (IE: an advertising monopoly, NOT a tech monopoly). But what do I know? I'm just a naive and biased "techie" after all.

It's up to Google now (1)

Imperial B (1232628) | more than 6 years ago | (#22287582)

It's between embarrassing M$ by making a useless alliance thus breaking M$ deal and making them look bad, or letting them waste more money on a hopelessly doomed and misguided venture: Yahoo! Live Web Pack Premium Paid Advantage! Yahoo! shouldn't be competing with Google anyway, they should put everything into building the ultimate casual gaming lounge in 3D.

Google Wants to Stop This Takeover (5, Interesting)

cookedchicken01 (1232626) | more than 6 years ago | (#22287602)

Check out this blog post by Google's Senior Vice President and Chief Legal Officer, David Drummond on Google's Corporate Blog. Google clearly sees this deal as a direct threat to the future of the Internet. They are not going to let Microsoft walk all over them like Netscape. Microsoft's bid for Yahoo! was a declaration of war:

Yahoo! and the future of the Internet

2/03/2008 11:45:00 AM

Posted by David Drummond, Senior Vice President, Corporate Development
and Chief Legal Officer

The openness of the Internet is what made Google -- and Yahoo! --possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It's what makes the Internet such an exciting place.

So Microsoft's hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the Internet: openness and innovation.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.

Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to
unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.

This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first --and should come first -- as the merits of this proposed acquisition are examined and alternatives explored.

My own soapbox... (1)

pravuil (975319) | more than 6 years ago | (#22287610)

Alright, it's been a while. I might need to dust off my cobwebs.

What is there to say about this? It really doesn't make too much sense because Microsoft is a company whose main focus has been on their operating system. I can understand MS wanting to adapt to an already mature market considering what they might lose if they don't. What does any of this mean really? Yahoo has done well with their deals they have made with various ISPs to help carry their brand name presence. Yahoo does have good presence overseas as well. There are die hard Yahoo fans out there that scoff at google. There are a lot of thing that Yahoo has done which has beat out google many times in innovation. Geocities was on of the first online hard drives / personal web space companies next to Tripod and AOL. They were one of the first to provide POP3 email accounts commercially to the general public for free. They had their own customized homepages, calenders, online note taking utilities and a whole slew of other innovations which took years for google to adopt. While most of the innovations are minor and pretty much found everywhere now, Yahoo has shown to be extremely active in terms of keeping up with current trends and developments. Yahoo has held its own and shows it by staying alive in the market. Microsoft could learn a lot from this company and to keep step with Google, they need someone like this on their side.

In terms of resources however, it still isn't a good enough reason to go through something like this. I don't care how big MS is, 44 billion is a lot of money even for them. The problem isn't in terms of how much they spend up front, it's how much they will spend in order to accommodate the merger. It will be several billion dollars more after Yahoo is acquired that will make the full transition complete. With the problems the market is having with Vista, Microsoft needs some sort of cash cow on their side in order to back them up with this merger. It's a very risky move on Microsoft's part to do something so big especially when the majority of Vista machines on the market are due to deals made with computer manufacturing companies like Dell, and Gateway. If individual sales of their product was stronger than there would be little risk involved but from where they stand now, it does blur the edges.

Microsoft is making a mistake on this one (4, Insightful)

Christianfreak (100697) | more than 6 years ago | (#22287672)

MSN is the default on new computers so the only people that use it are the ones that don't know any better. On the other hand pretty much everyone who uses Yahoo does so because they chose to do so. Microsoft has too much hubris to keep Yahoo's technology, they're going to change it all to Windows and .NET and just like what happened with Hotmail it will suck in then end.

Where are those users going to go? I'd wager the vast majority of them will go straight to Google.

Google doesn't need to buy Yahoo, they're going to get the users anyway

Re:Microsoft is making a mistake on this one (1)

dufachi (973647) | more than 6 years ago | (#22287872)

This is true for me. I had been using Yahoo! and Yahoo! 360 for blogging/social networking until Yahoo! decided they didn't want to keep running 360 any more and turn it into a junk-fest that they're looking to change in the next two months. I closed my account and moved my blogging to Blogger (Google). Yeah, I could run wordpress directly on my site, but it's too much of a hassle to bother with.

I suppose you can argue that Google is getting "too big for it's britches" but for some strange reason I tend to offer them a bit more trust than Microsoft.

Valuation misconceptions... (2, Interesting)

Fulg0re- (119573) | more than 6 years ago | (#22287684)

I think there have been a good number of misconceptions about Microsoft's $45 billion offer for Yahoo!, and there are a few points that we ought to make note of.

Firstly, Microsoft's valuation indicates their valuation of Yahoo! being part of Microsoft. Synergies account for the higher value!

Secondly, with the offer, Yahoo! is now "in play", and there is a consequent expectation that someone such as Google may come along and make an offer. Since it is in play, people expect an offer that comes at a premium (which of course gets priced in!). Now, this is implicitly priced into the 62% premium that Microsoft has offered, and they have set it high enough (in their estimate) so as to price out any potential offers from others.

If Google decides to get involved, they have plenty of antitrust concerns in terms of an overall takeover bid. Can they take a play out of Microsoft's playbook (e.g., 1.6% stake in Facebook) and offer a larger premium for a substantial stake of the company (e.g., $60/share for say 35% of Yahoo!)? I would not be surprised if we see such a strategy.

Alliance doesn't mean buy outright! (0)

Anonymous Coward | more than 6 years ago | (#22287806)

Again, the slashbots don't use their brains....

A Yahoo!/Google alliance wouldn't mean Google buys out Yahoo! and pays $45 billion plus. Instead, in an alliance like the one described, Yahoo! goes back to the prior arrangement of having Google run the search on all of Yahoo's sites. The combined Yahoo!/Google search traffic this would send to Google would so dwarf Microsoft's current share, that it would be all but hopeless for Microsoft to win in the search/advertising space and would eliminate one of the prime rationales behind them buying Yahoo! Yahoo! could win in such a scenario (stays independent, focuses on mail, IM, and portals where it is leading) and Google clearly wins.
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