×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Yahoo! Rejects Microsoft's Offer, Says 'Still An Option'

Zonk posted about 6 years ago | from the oh-just-get-a-room-already dept.

Yahoo! 213

mikkl666 writes "In response to an open letter from Steve Ballmer, Yahoo! posted a press release claiming that Microsoft's offer 'substantially undervalues Yahoo!' and is therefore not in the best interest of the company. They also bemoan that the letter 'mischaracterizes the nature of our discussions' and that the threat to make an offer directly to the shareholders is 'counterproductive and inconsistent with the stated objective of a friendly transaction'. Nevertheless, they explicitly point out that a transaction with Microsoft is still an option, but only if they are willing to pay 'a price that fully recognizes the value of Yahoo!'"

cancel ×
This is a preview of your comment

No Comment Title Entered

Anonymous Coward 1 minute ago

No Comment Entered

213 comments

crack smoker (4, Interesting)

timmarhy (659436) | about 6 years ago | (#22995756)

MS are offering 2x the going share price. what secret pot of gold does yahoo managment think they have that's worth so much?

oh and he must be pretty dense to think "friendly negotiations" are still an option if MS goes to the shareholders directly.

Re:crack smoker (5, Insightful)

d3vi1 (710592) | about 6 years ago | (#22995910)

I think that it's just another nice way of refusing.

I think that the Yahoo! folks realize that Yahoo! and Microsoft don't really mix together.

Microsoft only wants the userbase and the brand, not the products. If Microsoft were to acquire Yahoo!, all their technology (Apache, Oracle, MySQL, PHP, Java, etc running on top of Linux and BSD) would be replaced by Windows servers running IIS. That would make most of the Yahoo! engineers redundant.

I am pretty sure that they would just add the missing features to their Live products, and rebrand them as Yahoo! The Yahoo! products will start a short (i.e.: 1-2 years) death as soon as Microsoft buys them, to make room for Yahoo! branded MSN/Live ones.

Imagine a .NET/Mono based Zimbra.

Furthermore, I assume that at that level all negociations are 'friendly'. Unless they fail, when they become friendly only for the winning side.

Finally, I do believe that Yahoo! is worth more than that ammount, because there are countries where no competition exists (see Romania). In a blog from one of the Fedora Art Group members, the blogger said that over 90% of the email addresses in Romania were Yahoo! ones. I can confirm this with the Messenger part. I've never seen anyone giveout a GTalk or MSN id in Romania, only Yahoo!.

My yahee, my yahoo (5, Funny)

tepples (727027) | about 6 years ago | (#22996050)

the blogger said that over 90% of the email addresses in Romania were Yahoo! ones. I can confirm this with the Messenger part. I've never seen anyone giveout a GTalk or MSN id in Romania, only Yahoo!.
So that's what the Numa Numa guys were singing about: "My yahee, my yahoo."

Re:crack smoker (4, Interesting)

Mongoose Disciple (722373) | about 6 years ago | (#22996084)


Microsoft only wants the userbase and the brand, not the products. If Microsoft were to acquire Yahoo!, all their technology (Apache, Oracle, MySQL, PHP, Java, etc running on top of Linux and BSD) would be replaced by Windows servers running IIS. That would make most of the Yahoo! engineers redundant.


Ok, so devil's advocate / tinfoil hat time.

I'm not exactly going to predict this because, come on, Microsoft, but I could sort of see them leaving Yahoo! alone technologically, at least in the short term.

Let's assume there's some viable evil reason for Microsoft to want expertise with PHP/MySQL/etc. in their stable. Microsoft basically cannot grow something like that organically from within. You can't create Microsoft MySQL without essentially admitting there's something wrong with SQL Server, etc.

But you could plausibly buy Yahoo, point to the past migration nightmares of Hotmail, and say that you were wisely letting Yahoo continue with their current technologies due to those experiences.

Re:crack smoker (5, Insightful)

liquidpele (663430) | about 6 years ago | (#22996580)

No, they'll do what they did with hotmail.
They'll leave them alone until it makes sense to move over to windows/IIS. Hotmail stayed on BSD for years, but it's been IIS for quite a while now. they're not stupid, they'll treat it as business and move them over when it makes sense to do so. But the Golden rule in most markets is you sure as hell better eat your own dogfood if you expect your customers to, and eventually they'll have to move Yahoo! over if they do buy them.

Re:crack smoker (0)

Anonymous Coward | about 6 years ago | (#22996596)

... Or you could point to the fact that they did eventually port Hotmail to their platform and turn it in to a festering pile of shit that Ballmer HAS to be proud of, saying "Look at how much VALUE ADD we introduced to the product!"... and then expect the worst if they buy Yahoo!

Tin hat time (0)

Anonymous Coward | about 6 years ago | (#22996754)

Ok, so devil's advocate / tinfoil hat time.

Naw - that position is held by this thinking:

Microsoft wants FreeBSD dead. Buying Yahoo! would help in doing that. Microsoft knows how well FreeBSD works (Due to the Hotmail experience)

Reasons:

1) When Microsoft unloads on GNU/Linux - a place to go to would be gone.
2) Hurts Apple.

Re:crack smoker (1)

HalAtWork (926717) | about 6 years ago | (#22996778)

It's possible that they've already done stuff such as made a Yahoo-like front end to their Live mail web software, and other such stuff in preparation for this.

Re:crack smoker (2, Insightful)

imstanny (722685) | about 6 years ago | (#22996100)

Finally, I do believe that Yahoo! is worth more than that ammount, because there are countries where no competition exists (see Romania). In a blog from one of the Fedora Art Group members, the blogger said that over 90% of the email addresses in Romania were Yahoo! ones. I can confirm this with the Messenger part. I've never seen anyone giveout a GTalk or MSN id in Romania, only Yahoo!.
Microsoft's original $31 per share offer represented a 62% premium to where Yahoo's shares had been trading before the offer. The market determines price, and they were valuing Yahoo at $19/share. Also, look at the current trading price = MSFT's offer is $31, yet YHOO is trading at under $28. By your logic it should be trading above $31, but it isn't because Market thinks it's worth less than what Microsoft is offering them, and if they keep rejecting Microsoft, then their stock will go down - regardless of what they believe their stock is worth.

Re:crack smoker (1)

TooMuchToDo (882796) | about 6 years ago | (#22996306)

There are almost always stocks out there that the market undervalues. The market isn't all-knowing. Being a savvy investor is picking up undervalued stocks before the market determines their true (hopefully, higher) value. Example: I bought Google a couple of days after their IPO for around $220-$230/share. The market has valued it as high as $700+/share. Now, you're not always going to beat the market (actually, you'll probably lose more than you'll win), but if done properly you'll still be ahead dollar wise.

Re:crack smoker (1)

wellingj (1030460) | about 6 years ago | (#22996434)

Now, you're not always going to beat the market (actually, you'll probably lose more than you'll win), but if done properly you'll still be ahead dollar wise.
Off-topic but, the dollar is behind and falling quick so what does that mean?

Re:crack smoker (1)

TooMuchToDo (882796) | about 6 years ago | (#22996466)

It means that not every trade you make is going to be profitable, but if you know what you're doing, you should still come out ahead across all your trades. I wasn't referring to currency value (dollar vs euro vs yuan).

Re:crack smoker - if they replace the technology (1, Interesting)

Anonymous Coward | about 6 years ago | (#22996200)

http://reviews.cnet.com/web-mail/msn-hotmail/4864-9236_7-30980702.html?messageID=2512903 [cnet.com]

If you google "hotmail reliability" you get lots of hits complaining that hotmail lacks reliability. If Microsoft replaces Yahoo's technology, there will probably be massive breakage.

If I were a Yahoo shareholder and Microsoft offered me a substantial premium, I would take it. Yahoo hasn't gone up over the last two years, it has gone down. http://finance.yahoo.com/q/bc?s=YHOO&t=2y [yahoo.com] At best it could be called stagnant in a volatile kind of way. The price was around twenty bucks and going down until sometime around February when it shot nearly to thirty. To my untrained eye, it looks like the only thing keeping Yahoo's stock price from tanking is the Microsoft offer.

Maybe Yahoo execs want to keep their jobs? (1)

walterbyrd (182728) | about 6 years ago | (#22996300)

If you a job like that, wouldn't you want to keep it?

If msft buys yahoo, msft won't need those execs anymore.

Good reasoning, Wrong Conclusion (2, Insightful)

dmadzak (997352) | about 6 years ago | (#22996454)

"Finally, I do believe that Yahoo! is worth more than that ammount," If that was true, Yahoo would already be valued at that much. While it may be true at some point in the future that may be the case, but if I was a Yahoo investor considering the economy is entering a recession and Google is starting to slow down I would take the money and find a better investment. The Yahoo board doesn't have its shareholders best interest in mind here. Whether it is good for the internet, computers, world peace, global warming or the war in Iraq it doesn't matter. The CEOs have a duty to the shareholders that they seem to be neglecting here.

Re:crack smoker (2, Insightful)

Kalriath (849904) | about 6 years ago | (#22996474)

I think that the Yahoo! folks realize that Yahoo! and Microsoft don't really mix together.

Doesn't matter. What does matter is whether the executives refusing this offer is in the best interests of the owners, which is to say shareholders, of the company. If "they don't mix well together" is the excuse for refusing the offer, then the Yahoo! board has just broken the law.

Re:crack smoker (1)

andydread (758754) | about 6 years ago | (#22997266)

Imagine a .NET/Mono based Zimbra.

Not happening. Microsoft will start an aggressive campain to migrate all Zimbra users to Exchange and kill it. No need have competition to your cash cow based on all open source competing technologies. Stick a fork (no pun intended) in Zimbra if Microsoft gets a hold of Yahoo!.

Re:crack smoker (3, Interesting)

ozmanjusri (601766) | about 6 years ago | (#22995932)

MS are offering 2x the going share price. what secret pot of gold does yahoo managment think they have that's worth so much?

For a start, it's nowhere near 2x, since the value of MS shares, and hence the offer have dropped since the initial approach.

Microsoft have some interesting times ahead too, and Yahoo shareholders might be considering the risk of turning their Y. shares into MS ones.

Microsoft's stock buybacks, for example, are being used to counteract stock options paid to executive employees. That's drawing down their cash reserve rapidly without generating much growth.

The net number of shares in circulation is roughly the same as in 2005, likewise, MS share price remains around the same $29 mark it averaged in '05 despite $50 billion worth being bought back.

Add to that the failure of their flagship OS on the market and the threats to their Office monopoly, both statutory and in the market, and there's good reason for Yahoo investors to hope for a better suitor.

Re:crack smoker (3, Interesting)

dedazo (737510) | about 6 years ago | (#22996228)

That's drawing down their cash reserve rapidly without generating much growth.

That's an interesting soundbyte. Can you explain how stock options paid to executives (which executives?) are actually eating into a $30 billion dollar cash reserve? Those must be some pretty large stock grants.

Add to that the failure of their flagship OS on the market

Looks like someone is connecting all those Vista machines that are not being sold to the internet. [hitslink.com] I'd like to have me a few of those failures every decade or so.

Re:crack smoker (3, Interesting)

DECS (891519) | about 6 years ago | (#22996680)

It's the stock buybacks that are eating up MS' cash reserve. Buying back your own stock is an admission you have nothing better to do with your money that give it back to your shareholders

Remember the words of Michael Dell wrt Apple? Apple isn't buying back its stock, it's buying new campuses, data centers, retail outlets, investing in building products to serve new markets, all of which are selling off the charts.

Microsoft is failing in every consumer electronics arena it enters. It's brightest star is the xbox, which has only made a few million in the last quarter after billions of losses. Sales have now plateaued, forcing the company back to release a new xbox generation and start spending again.

Video Game Consoles 2007: Wii, PS3 and the Death of Microsoftâ(TM)s Xbox 360 [roughlydrafted.com]

Vista might be shipping on some new PCs, but remember that nobody ever questioned Windows' ability to sell. It's a monopoly! Everyone expected MS to sell Vista without any hiccups. It was the consumer business and Windows Media/PlaysForSure, Zune, WinCE/Windows Mobile, Windows Embedded that were all on fire and sustaining deep losses. Microsoft can't sustain mild sales on Vista after spending billions to develop it over the last 6 years and having nothing really to show for all that.

Windows 7 won't show up for another three years, so Vista has to generate cash across that whole time period, not just ship on some new PCs. What's happening though, is that cheap PCs like the EEE and OLPC are running Linux, premium PC sales are getting eaten into by sales of Macs that are outpacing PC sales by 4x, and major vendors are begging to ship XP.

Microsoft's flat stock has been placid for a decade during record earnings boosted by automatic OEM PC sales in a period where the PC-box was the only game in town and there was no effective competition. MS is now being hit by competition at the low end and the high end, while also finding the PC market itself coasting along statically. Sales volumes are shifting toward mobile devices.

MS hasn't successfully delivered mobile devices anyone wants. UMPC was a huge failure, Windows Mobile is a joke. Now its facing the iPhone/iPod Touch and an array of smartphones from other vendors, without any viable game plan.

At some point, you can't say MS will survive on its good looks and personality alone, because its business is facing several points of failures. Yahoo knows that. It also knows that a MS takeover would gut the company and destroy shareholder value.

Why Does Microsoft Really Want Yahoo? [roughlydrafted.com]

Re:crack smoker (0)

Anonymous Coward | about 6 years ago | (#22996742)

You'd be taken a lot more seriously if you didn't link to that cesspool of unbridled Apple fanboyism and Microsoft hatred.

Just a thought. The rest of your comment seems interesting enough, assuming you're not getting your Microsoft insight from there as well.

Re:crack smoker (4, Funny)

rainhill (86347) | about 6 years ago | (#22996058)

"what secret pot of gold does yahoo management think they have that's worth so much?"

a CEO that does not jump [youtube.com] on stage and throw [theregister.co.uk] chairs

Re:crack smoker (0, Troll)

jpdzahr (1260592) | about 6 years ago | (#22996132)

Seems Yahoo is smokin something perhaps Yahoo feels they have world domination? I think the shareholders will push the sale through eventually. There is no way you can not accept 200% valuation and payment from Microsoft. WOW This might also be a good idea to by Microsoft stock. http://www.healthfindershub.com/ [healthfindershub.com]

Re:crack smoker (1)

dedazo (737510) | about 6 years ago | (#22996250)

Interesting. I looked through your meager comment history and I have to admit you're the first blog-style spammer I've seen on Slashdot. And I've been here for a relatively long time.

I doubt you retards have actually defeated all the posting restrictions /. has, so it's obvious that this is actual manual labor. I always thought it was some sort of automated system.

Weird.

Re:crack smoker (1)

liquidpele (663430) | about 6 years ago | (#22996610)

You never browse at -1 do you? :)

Yea, new little sites trying to make a name for themselves will do that a lot, but their efforts never last more than a few weeks since as you said it's manual labor and not very efficient.

Re:crack smoker (1)

SetupWeasel (54062) | about 6 years ago | (#22996188)

This has nothing to do with the value of Yahoo! to the market. It has to do with the value of Yahoo! to Microsoft. Yahoo! can smell the stench of desperation all over Microsoft, and as much as Microsoft is trying to play hardball, Yahoo! knows they can and will cave to any demands no matter how ridiculous.

Re:crack smoker (1)

Grave (8234) | about 6 years ago | (#22996234)

No they won't. Yahoo can only make demands if their shareholders back the current board, but they do not. When Microsoft starts their proxy fight, they will win. The market already decided the value of Yahoo, and it is not as much as Microsoft offered. The board is failing to do their duty to the shareholders by not accepting this offer. Microsoft will win this fight, and I say for the better. Google needs proper competition in the search/advertising arena, which is something that only a combined Yahoo/Microsoft can provide. Although I doubt Google will become stagnant anytime soon, the only way to ensure this is by giving them a good competitor. Yahoo became stagnant and forgot about their core market, which helped spur the rise of Google.

Re:crack smoker (1)

DECS (891519) | about 6 years ago | (#22996750)

Actually, Google just ripped off Overture's technology and implemented it better. Yahoo bought Overture, and ended up giving Google a license to it in exchange for cash. It's not obvious that Yahoo ever did anything well, it just happened to be positioned well at a fortunate time in the development of the web.

That Yahoo is still around, and that Microsoft wants to buy it, really says something miraculous about the sustainability of bullshit and the absolute desperation/incompetence of Microsoft, which has been around trying to figure out the web longer than Google or Yahoo.

Try to fathom the reality that Microsoft's attempts to monopolize web search have failed despite its efforts to tie things to its OS/web browser. There is little reason for thinking that Microsoft+Yahoo would be even equal to the sum of its parts, but MS has little else available to buy and demonstrably can't build its own web strategy from scratch.

Why Does Microsoft Really Want Yahoo? [roughlydrafted.com]

Re:crack smoker (2, Insightful)

radl33t (900691) | about 6 years ago | (#22996494)

This argument is tired. Yahoo's share price was above the initial offer less than 6 months ago. Tech stocks were the 2nd largest hit recently next to financials. For comparison, Apple shit out almost -40% too, should shareholders support their buyout at the low market cap? Yahoo mgmt is right, the offer does undervalue their potential and they can offer their share holding investors greater value (key: if they can execute). Unfortunately, investors are outnumbered by gamblers these days.

Re:crack smoker (1)

datapharmer (1099455) | about 6 years ago | (#22997002)

newsprint publishers. yahoo does online advertising and is a portal. print news is dying and needs an update. if the printers bought a powerful portal it would give them a means of controlling new distribution online (a "get it from yahoo or don't get it at all!" attitude backed up by lawsuits would put a sudden halt on the news free-for-all on the internet. they could require a subscriber login for news and offer different tiers of advertising to content for different amounts. What does microsoft have to offer them in terms of profitability?

Re:crack smoker (1, Insightful)

Anonymous Coward | about 6 years ago | (#22997032)

No matter what reason Yahoo!'s management has for refusing, this is the only acceptable one. By law, Yahoo! has a fiduciary duty to act in the best interest of its shareholders.

The only reason a stockholder would not accept an offer at twice the stock's value was if said individual thought he or she could somehow gain more utility from holding on to the stock. This letter is simply Yahoo! covering its ass.

Re:crack smoker (1)

jayminer (692836) | about 6 years ago | (#22997226)

If Microsoft tries to collect the shares from the market, the price will skyrocket, more than double.

If they go to shareholders, the information will go public and the price will skyrocket, again.

So there is no viable option to buy this company other than negotiating.

Premium Price (2, Interesting)

eebra82 (907996) | about 6 years ago | (#22995784)

Taken from the open letter:

It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.
If Microsoft is willing to pay a 62%+ premium, why is this not enough for Yahoo and why are they not making a counter-offer? I am not an expert, but to me, this sounds like extremely personal business.

Re:Premium Price (1)

Lunatrik (1136121) | about 6 years ago | (#22995820)

Not only that, but what does "a friendly transaction" even mean? I assure you that a great many Yahoo! shareholders will be more than willing to be "friendly" with Microsoft if it really does come to a showdown...

Re:Premium Price (1)

DECS (891519) | about 6 years ago | (#22996782)

Because, somewhat obviously, Yahoo thinks it is worth more than its current market valuation.

Next year, the market's hypersensitivity in the outlook for tech could be replaced with optimism that brings Yahoo back up. The board may have some insight as to future profit potential as well, although it looks like there are no magic rabbits to pull out.

Today's value isn't the only thing they're looking at. If you were a homeowner sitting on a property greatly devalued by the current lending crisis, it wouldn't be a great deal to sell your house at a "market premium" if that price was only a premium due to the market being in a trough.

If you thought you could sell for substantially more by waiting for the market to bounce back, today's "market premium" wouldn't be attractive at all.

Re:Premium Price (1)

kripkenstein (913150) | about 6 years ago | (#22996886)

Taken from the open letter: If Microsoft is willing to pay a 62%+ premium, why is this not enough for Yahoo and why are they not making a counter-offer? I am not an expert, but to me, this sounds like extremely personal business.
Nah, it isn't personal. The question is, a 62%+ premium over what? The current stock price? Yahoo! leadership might believe that the stock price is not indicative of actual worth. There could be many reasons for this, including the obvious one that the stock price only reflects what the market thinks Yahoo! is worth. The market, of course, is unaware of secret skunkwork projects going on in Yahoo!, of which there are presumably many (nothing special about that, the same is true for Google and Microsoft). Perhaps one of these projects is particularly promising in the eyes of Yahoo! leadership. We've actually seen several new projects come to light in recent months from Yahoo! (not a coincidence).

In addition, much of the transaction is for Microsoft stock. It isn't the most attractive stock to own, and hasn't been for several years. Perhaps Yahoo! leadership believes an exchange of stock from Yahoo! to Microsoft isn't worth it for the stockholders. Again, this isn't a matter of simple math, it's a judgment call, that's how the stock market works.

This is like... (4, Funny)

seanadams.com (463190) | about 6 years ago | (#22995806)

This is like watching ugly people kiss.

Re:This is like... (4, Funny)

Anonymous Coward | about 6 years ago | (#22995868)

Right. Microsoft is an M and Yahoo is a Y. We know which penetrates what. Microsoft just doesn't yet realize they're the bitch.

Yahooooooo!!!!

Hm.. If Yahoo! was a girl.... (1, Funny)

Izabael_DaJinn (1231856) | about 6 years ago | (#22995808)

I think she'd be what we call coy ;-)

Re:Hm.. If Yahoo! was a girl.... (1)

Grave (8234) | about 6 years ago | (#22996248)

I'd go with incredibly stuck-up and stupid, to be honest. Coy would be if the offer legitimately undervalued the company, which it does not.

The real question is why? (3, Interesting)

Whuffo (1043790) | about 6 years ago | (#22995832)

What does Yahoo! have that Microsoft prizes so highly? Anything that Yahoo! has done successfully (although not often profitably) has already been "independently reinvented" by Microsoft.

The most likely result of such a purchase would be that they'd try to turn Yahoo! into another Microsoft division and destroy what they were after in the first place.

Seems a strange purchase to be chasing after so hard...

Re:The real question is why? (2, Interesting)

Spy der Mann (805235) | about 6 years ago | (#22995852)

You're absolutely right. Part of the value in Yahoo! resides in that they're a Microsoft competitor (in Yahoo! mail, for example).

If that transaction ever takes place, I'll immediately wipe my Microshoo! mail account.

Re:The real question is why? (1)

Anonymous Coward | about 6 years ago | (#22996254)

Not that my business means jack to Yahoo! or Microsoft, but I'll stop using Yahoo! services once Microsoft grabs them. For my sake, not to make any statement.

Re:The real question is why? (2, Insightful)

DECS (891519) | about 6 years ago | (#22996820)

And not just a competitor in selling similar products (search, email, etc), but also a competitive threat.

Yahoo owns Zimbra, the FOSS threat to Exchange. This is a cheap way for Microsoft to destroy a wide swath of open source products and projects Yahoo contributes toward.

The market has given Yahoo a low valuation based on its earnings and future outlook both as a company and in the current recession. It's the perfect time for Microsoft to exploit that to expand its monopoly power and kill off competition.

Even for shareholders who only care about money, the issue should be: since MS is going to be paying this "premium" with stock (it doesn't have enough cash), is the shell game price really a premium at all?

Re:The real question is why? (4, Insightful)

truthsearch (249536) | about 6 years ago | (#22995862)

Yahoo has more pages and traffic than just about any site on the internet. Yahoo and Google are Microsoft's only real competitors on the internet. So my guess is they simply want to absorb one of their competitors to leverage against the other. Microsoft's not gaining market or mind share on their own, so like usual they're trying to buy it.

Re:The real question is why? (3, Insightful)

rolfwind (528248) | about 6 years ago | (#22995902)

Microsoft has a ton of cash it is sitting on and it's burning a hole in their pocket. They're also a company that has lost an overall focus and their major enemies from the past generations are gone. They are building up a new "feindbild" with Google in the lead role -- so to them taking over number 2 (Yahoo) would be a logical procession if they can't buy #1 (Google).

Microsoft always needed an enemy to rail against (because they usually didn't innovate, rather copied and improved upon). They have been at this unfocused lash-out stage for quite a number of years.

But really, this purchase is redundant. They're better off taking the excess cash, paying dividends, and let that be the end of it. The MS/Yahoo merger will be stillborn. The management there will be hostile and leave after the buyouts and the Microsoft drones won't be any better.

Re:The real question is why? (2, Funny)

aztektum (170569) | about 6 years ago | (#22996008)

I am seriously expecting Ballmer to completely lose it any day now. He'll announce Microsoft's intention to buy Google for 1 million a share (in Monopoly dollars), while juggling chairs and developers.

Say what you want about Bill, the company did nothing but grow under him (granted there was the .com to help). Under Ballmer MS is doing everything it can to piss anyone and everyone off and fuck itself into oblivion.

Re:The real question is why? (0)

Anonymous Coward | about 6 years ago | (#22997104)

"Microsoft always needed an enemy to rail against (because they usually didn't innovate, rather copied and improved upon)"
Should read Microsoft always needed an enemy to rail against (because they usually didn't innovate, rather copied and turned into a steaming pile of shit)

There, fixed that for you.

Re:The real question is why? (5, Informative)

Shipwack (684009) | about 6 years ago | (#22995928)

Yahoo is ahead of Microsoft in a few areas... Yahoo's search is worse that Google (IMO), but Microsoft search is worse. Yahoo has Flickr and the social network 43Things, neither of which have a Microsoft equivalent. There's Yahoo Mail and Yahoo Groups, both of which are superior to what Microsoft has. But I agree... Microsoft has a tendency to be heavy-handed with new acquisitions, not to mention the ones it drowns in the bathtub on purpose.

Re:The real question is why? (1)

Mongoose Disciple (722373) | about 6 years ago | (#22995998)

I'd say that Yahoo Video is also a stronger offering than anything in the MS stable at this point.

It's no YouTube, but that's really a lot more about mindshare than quality per se. Google sure didn't buy it for the technology.

Re:The real question is why? (1)

porcupine8 (816071) | about 6 years ago | (#22995944)

What does Yahoo! have that Microsoft prizes so highly?

Probably a web portal that they've managed to not run into the ground quite as badly as MS [alexa.com] .

they'd try to turn Yahoo! into another Microsoft division and destroy what they were after in the first place.

That, I totally agree with. I've already submitted a letter to Yahoo's feedback page letting them know that I won't be using their many services anymore if the MS deal goes through, because I know that a service decline is inevitable. What good can come of letting a company that's already been proven incompetent running a similar business run your business?

Re:The real question is why? (4, Interesting)

Enderandrew (866215) | about 6 years ago | (#22996028)

Yahoo's web-services run on Apache servers, and are often developed with open source software in mind.

I can't imagine that would continue if Microsoft bought them out. And most of the in-house developers would have to learn asp real quick, or be out of jobs.

Re:The real question is why? (0)

Anonymous Coward | about 6 years ago | (#22996792)

surely MS wants the good techs that yahoo has. why would they get rid of them? if anything, they're going to offer enticements to the yahoo people to stay on.

Re:The real question is why? (0)

Anonymous Coward | about 6 years ago | (#22996206)

Compared to Windows Live/MSN? Microsoft sees this as a cheap way of moving their entire Internet business org down to Silicon Valley. They've finally given up on trying to pull it all off from Redmond. The single campus model has reached its limit of scalability.

Remember MS has settled many antitrust suits for billions of dollars apiece, so they perhaps regard this deal as the price of a half dozen of those put together. That thought has surely crossed the minds of Yang & Co. as well.

Re:The real question is why? (3, Insightful)

4D6963 (933028) | about 6 years ago | (#22996230)

What does Yahoo! have that Microsoft prizes so highly?

Well see, the boxers I'm wearing right now are worth $2. But if you offered me to buy them for $3.24 (a 62% premium), there's no way in hell I would accept. Surely that's way more than they are worth though, but I still wouldn't accept. However, I would accept if you made an offer I would deem good enough, something way above my boxers' real value, somewhere around $50.

So what's so worthy about my boxers so that I wouldn't let them go for less than 20 times their true value? Nothing, I just would hate to give you my bloody underpants, so I would only let them go for a ridiculously high price.

Re:The real question is why? (-1, Flamebait)

Anonymous Coward | about 6 years ago | (#22996282)

You think pretty highly of your shit, don't you?

Re:The real question is why? (4, Funny)

MrNaz (730548) | about 6 years ago | (#22996984)

my bloody underpants

Hey look, I have no problem with women on Slashdot, but if you're going to hang out here you're going to have to learn to deal with the things that make you different from men.

Re:The real question is why? (0)

Anonymous Coward | about 6 years ago | (#22996738)

What does Yahoo! have that Microsoft prizes so highly?

Brand name recognition -- for most people Internet search is Yahoo! foremost (remember to count in Asian countries) and Google then.

This highlights the decline of both companies (3, Insightful)

religious freak (1005821) | about 6 years ago | (#22995906)

Why on Earth would MSFT offer so much when they could/should develop the search technology, content, and customer base themselves? I don't think they can.

Why would Yahoo refuse to accept an offer that is clearly more than they'd get from anyone else? Maybe management has its head in the sand as to its marketplace position.

Going hostile on the acquisition is really, really stupid since one of the best parts of an IT company is the IT talent.

Going hostile will antagonize the whole company, including the best IT talent, IMO.

Re:This highlights the decline of both companies (1)

d3vi1 (710592) | about 6 years ago | (#22995934)

Because Yahoo! wants independence. Because Grandma considers Yahoo! Mail to be the only Email option. Or to put it more correctly, she thinks that the Email service and Yahoo! Mail are one and the same thing. She doesn't know that there are alternatives, and she doesn't care. She likes emailing other grandma's and she will follow the guidelines that I wrote on the side of her screen and only apply to Yahoo!

Re:This highlights the decline of both companies (1)

DogDude (805747) | about 6 years ago | (#22996412)

You're right. I wouldn't be surprised if the shareholders file a class action against the board on this one. That's a huge premium to walk away from.

I figured it out (1)

ILuvRamen (1026668) | about 6 years ago | (#22995918)

I think they're stalling why they try and figure out why the hell Microsoft would ever want to buy such a crappy company. I mean really, they've been sued for human rights violations and basically everything else you could think of, they've served up malware, they've rivaled AOL in annoyingness and quality of software and everyone with a brain hates them. I still can't even figure out why Microsoft would want them other than to just make them go away.

Re:I figured it out (5, Insightful)

jc42 (318812) | about 6 years ago | (#22996142)

I still can't even figure out why Microsoft would want them other than to just make them go away.

Bingo!

The only motive here is the elimination of a competitor. Price is no matter; Microsoft wants Yahoo! destroyed because it's one of the two barriers in the way of Microsoft owning the search business.

It's similar to back when Microsoft decided that Netscape had to die. It rapidly became clear that the leaks were true: Bill and Steve had decided that they would lose whatever money they had to lose to own the browser market. They succeeded, and although they've made no money from IE at all (i.e., they've sunk the entire cost of developing it), they are now firmly in control of what the majority of eyes see on the Web. Sinking a few hundred million into IE was a small price to pay for that power.

Their goal now is to control what all those eyes see when they search the Web. Their problem is that most people think either "google" or "yahoo" is what you type to do a search. Not even MS fanboys like MS's search. They understand that they can't compete in the search arena on quality. So they're going to use their huge pile of money to destroy their remaining competitors. Yahoo is the easiest target, so they're going after it first. And they'll lose whatever they have to lose to kill it.

Then it'll be google's turn in the crosshairs.

Re:I figured it out (1)

liquidpele (663430) | about 6 years ago | (#22996642)

Don't forget Yahoo has a *really* large base of products, not just search. Del.icio.us, myspace, etc. That would all be microsoft's... They want the online presence and user base more than they want the competitor gone, because with that user base they can actually compete with Google in some areas. It's the foothold they need (although I bet 10 to 1 they screw it all up if they do buy them).

What's Microsoft gonna do with no cash? (3, Interesting)

geoffrobinson (109879) | about 6 years ago | (#22995960)

When Microsoft burns through all of their cash buying Yahoo, they might be in a whole bunch of trouble. No more ability to absorb losses in business areas when trying to break into a market.

So for this reason. I hope Yahoo accepts the deal.

Re:What's Microsoft gonna do with no cash? (0)

Anonymous Coward | about 6 years ago | (#22996990)

When they burn through this cash, they'll sit back, smoke a cigar, and wait a year. TA DA! $12 billion in new cash!

MSYahoo! (2)

david@ecsd.com (45841) | about 6 years ago | (#22996016)

I think that the main problem is--and correct me if I'm wrong--that Steve Ballmer is a great big douche bag, and that Yahoo can sense that if Ballmer sticks his nasty, greasy fingers into the Yahoo pie he'll turn it into shit just like they turned Hotmail into shit.

I've already started moving my homepage rss feeds from my.yahoo.com to google in anticipation of the inevitable Microsoft fucking it up.

I get my email from sbc^H^H^HAT&T/Yahoo DSL. It's always worked great. POP3, no problem. Don't have my laptop? Web mail works nicely (if a bit much on the ads).

I can forsee a day that my.yahoo.com will stop working right or looking right unless I'm looking at it with Internet Explorer.

Do they realize how long it took me to get my wife used to Firefox?!

Drunken ramble over.
Just sayin'...

Meanwhile (1)

Enderandrew (866215) | about 6 years ago | (#22996022)

Yahoo has been discussing possible partnerships with other companies they are less afraid of. Yahoo wants no part of Microsoft. Price isn't an issue here. The stock went up with Microsoft's offer initially, but has gone done since then, and will likely continue to drift back down to the pre-offer value.

I Can Only Imagine What Ballmer Is Doing.... (2, Funny)

Skeetskeetskeet (906997) | about 6 years ago | (#22996038)

Ballmer angry!!! Ballmer mad!!! Ballmer smash Yahoo!!! Ballmer smash!!! Ballmer smash!!!

Yahooligans, more like it. (3, Insightful)

imstanny (722685) | about 6 years ago | (#22996054)

Looks like Yahoo has a lot of computer programmers, and not enough financial analysts. Company's 'value' = that which others are willing to pay for. It's like me selling soap on ebay and asking for $50 when the highest bidder is only offering $15. Guess what, either I take the $15 or I don't sell my soap.


If I was a shareholder, I would be very mad. If Microsoft is going to do a hostile take over by buying their shares on the open market, they'll probably get Yahoo for less than their current offer. Same thing happened with Cablevision a few months ago. When the Dolan family offered a buy-out for $36, some 'major' shareholders rejected the offer, pompously saying that Cablevision is worth more. Well guess what, the market didn't think so. The second the buyout was rejected, the stock plummeted below $30 and is now at $23!

Just a part of Microsoft's Open Source Strategy (3, Insightful)

stox (131684) | about 6 years ago | (#22996080)

Just think of how many FreeBSD/Linux servers would disappear from Netcraft if Yahoo went over to the Dark Side?

Embrace/Extend/Extinguish

Yahoo.net (1)

twoblink (201439) | about 6 years ago | (#22996088)

If the sales pitch of M$ to the Yahoo! management is "We will liberate you like we did to hotmail!!" then the deal was dead before it started.

Y! has hundreds of BSD engineers... What is MS going to do with them?? Exactly, they will be given the option, come to the dark side, or be fired. Even if they aren't fired, I'm sure one morning when the engineers go to work, all the servers will boot up Vista, the management will say, "oops, it was orders from up above" and that will be the end of that.

I know linux depts that have moved to BSD. I know BSD departments that have moved to linux. I know linux and BSD departments that have moved to and from Solaris. I know small house IT's that have moved from *nix to Windows. But I don't think what MS will be proposing, which is a complete migration of Yahoo to *doze, will work. I think it'd take 2~3 buggy years, and yahoo would go to zero while facebook picked up the majority share of the headless sheeple.

Let's see, we spend cash to buy out Yahoo. We fire everybody, we hire them back to try to convert the old Yahoo into the new Yahoo.net, and we fail in the process, have Bill Gates come back and say we will be releasing Yahoo7 in the coming year, and start throwing out service packs to the Yahoo.net in the meantime.

thats right (-1, Troll)

Anonymous Coward | about 6 years ago | (#22996090)

anal sex won't do anything but make your dick stink

shi7?! (-1, Troll)

Anonymous Coward | about 6 years ago | (#22996114)

To make sure the BalanCe is struck,

Yahoo is way overpriced (4, Insightful)

Animats (122034) | about 6 years ago | (#22996128)

Yahoo's stock is way overpriced. They're a large, mature company, not a growth company. Revenue is down. So they should have a P/E ration in the 10-20 range, like IBM, Microsoft, Oracle, and SAP.

But YHOO has a P/E ratio of 59 today. Which is far, far too high. Their market cap is around $37 billion. Divide that by 4 and you're close to what the company is really worth. Maybe $10 billion.

This is why Microsoft's institutional shareholders are unhappy with the proposed deal. Microsoft is overpaying, and that makes Microsoft less valuable.

Of course, if Microsoft just drops the deal, the bottom falls out of Yahoo stock, and it probably goes down to something closer to what it is really worth.

Google is overpriced too, but not as badly. Their P/E is around $36, while their revenue is flat or declining slightly. The fundamental problem with Google is that all those free services they give away don't make them any money. They've never found a second big moneymaking product.

Re:Yahoo is way overpriced (2, Interesting)

phantomfive (622387) | about 6 years ago | (#22996390)

They're a large, mature company, not a growth company.
Not sure why you think this. The internet is a revolutionary zone, where something completely new could come out at any moment. Furthermore, non-revolutionary revenue, such as advertising and online sales, are growing at a rapid rate. It is reasonable to assume that Yahoo will continue to make money off both of these areas. Even if advertising/Yahoo marketplace revenue doesn't increase significantly, Yahoo could still increase their value significantly with a reorganization and streamlining of their operations. Some of their departments have a separate manager for each programmer. That is horribly inefficient.

Google is overpriced too, but not as badly. Their P/E is around $36, while their revenue is flat or declining slightly. The fundamental problem with Google is that all those free services they give away don't make them any money. They've never found a second big moneymaking product.
They don't need to find a second big moneymaking product. All it takes is one. Internet advertising spending has been going up around 30% each year, a trend that's not ending any time soon, and Google's profits will rise right along with it. Those free services don't really cost that much, and have potential to be an additional revenue source (from advertising) if they become popular.

Re:Yahoo is way overpriced (0)

Anonymous Coward | about 6 years ago | (#22996986)

The problem is that having only one revenue source makes a company highly dependant on it, especially once it becomes a monopoly. Once growth stops, and even retreats, then the company begins to degrade. We see this today with Microsoft, who constantly struggles to find new markets to enter, after its core has been fully capitalized (remember, the original vision was simply office automation). There are many scenarios were the current model could become outdated in a decade's time and leave Google in a bad position.

For example, imagine replacing most ad-hoc searches with a single mash-up of services. For example, most people search a wide range of sites before purchases (e.g. flights, jewlery, etc). Imagine a single site that acts as a mall of services, which automatically mashes up multiple data sources. Just like most of us go directly to Amazon for our books, there won't be much of a reason to search elsewhere for anything else. This would drop a lot of Google's advertisement value if it didn't win the contract on those sites, and with Microsoft's eagerness to compete, they most likely won't. There's a lot of startups taking this at different angles, for example Rearden Commerce [reardencommerce.com] . Facebook may grow to the point that, rather than searching for a name on Google, all relevant information is better aggregated there. Microsoft already supplies those ads, and Google could lose a bunch of traffic.

So there's a lot of ways the industry could shift and not all of them are good for Google, if it doesn't diverify.

Re:Yahoo is way overpriced (5, Informative)

MoosePirate (114589) | about 6 years ago | (#22996898)

PE isn't the be all end all of valuing companies. In Yahoo's case, it has particular problems because Yahoo has substantial unconsolidated holdings in other companies such as Yahoo Japan and Alibaba. The value of these companies shows up in the P part of the ratio, but the earnings aren't counted in the E part. The value of these holdings alone would put the value of the company close to the $10 billion number you propose.

If we believe Yahoo's forecasts, their stock price has a fair value closer to $40/share, but even coming up short of this doesn't make them very overpriced. They are in a rapidly growing industry and have had double digit revenue growth for many years, so I think they still qualify as a growth company.

Re:Yahoo is way overpriced (1)

ZepHead (588874) | about 6 years ago | (#22997196)

Why not throw a few pennies at Yahoo! to help it with its top-line growth. Go to Yahoo and search for something like Enzyte or Verizon. Then click on a few ads.

You'll feel better having transferred some money from slimy companies to Yahoo so that it can fight off Microsoft.

Yahoo trying to force the issue? (3, Interesting)

s0litaire (1205168) | about 6 years ago | (#22996134)

It sounds to me like Yahoo is trying to force Microsoft to start a "Hostile Takeover" bid. Yahoo probably does not want to be part of the Microsoft hegemony and has probably got it's lawyers on the case. I bet within a few hours of Microsoft announcing it's started hostile takeover bid Yahoo will have lawyers in the American and EU courts blocking the Bid due to Competition/Monopoly rules. And we all know how he court's just love Microsoft's antics.... :D MS will get loads of bad press (share prices drop) Yahoo get good press (there shares prices level out above the original value when this started). then Google comes along and snap up the two of them....... :D:D

Re:Yahoo trying to force the issue? (3, Insightful)

Grave (8234) | about 6 years ago | (#22996356)

Neither company has a monopoly on anything that would be impacted by this merger. There will be no antitrust or court issues here.

I'm simply amazed at how many people think this won't happen. This merger is going to happen, regardless of what the current Yahoo board may say. If they don't approve it, they will be replaced by the angry shareholders, who are being robbed of the best offer they'll ever see for their shares.

Re:Yahoo trying to force the issue? (1)

DECS (891519) | about 6 years ago | (#22996862)

Microsoft still has a monopoly position over desktop PC software. Google has already complained that MS is tying its failed search products into Windows in order to replace the currently competitive market into another annex of Windows.

So while neither MS nor Yahoo have a huge chunk of the web search/advertising business, a merger would not only inflame the competitive threat Google is already complaining about, but also destroy a number of competitive products, including Zimbra and other FOSS projects Yahoo contributes toward.

That's anticompetitive and an anti-trust issue.

Re:Yahoo trying to force the issue? (1)

Kalriath (849904) | about 6 years ago | (#22996566)

There needs to be a "Score: -1 Delusional".

There's no monopoly here (though there would be if Google bought either of the two) and no court would touch a Yahoo!/Microsoft merger or purchase. There's simply no issue to speak of.

Re:Yahoo trying to force the issue? (1)

miffo.swe (547642) | about 6 years ago | (#22996908)

A monopoly cant use money gained from their monopoly to extend into other markets by force. If Microsoft uses money from their Office/Windows monopoly to kill google they can be charged. Its perfectly sufficiant to have a monopoly, it do not have to be in the market you are trying to overtake.

I would not be surprised to see the EU take a hard look at this. The US not so much until change of government, current administration tends to look at laws as something very bendable.

Re:Yahoo trying to force the issue? (1)

F34nor (321515) | about 6 years ago | (#22997078)

I can't understand why you idiots aren't bothered by this merger in general. Duopoly or oligopoly is only marginally less effective than a monopoly. This focus on monopoly totally ignores the fact that if it ends it -opoly it's not a fucking free market economy and is basically a license to bone people sans lube.

Ok, here's the plan, we seize all the bastards assets without compensation and turn them into a national internet search utility paid for by an internet sales tax. (Just kidding.) Or wait, no... we break them up into tiny companies and force total transparency and low barriers to entry on them. (Just kidding.) Oh shit neither communism or capitalism will ever work, WE'REALLGOINGTODIEAHHHHHHHHHHH!!!!!

Larger than Google (2, Insightful)

BountyX (1227176) | about 6 years ago | (#22996194)

In theory, if yahoo was taken over by microsoft, microsoft would control more of the search engine world than google. Remember overture? that was bought out by yahoo and it was a strong competitor against google adsense. I def. do not think yahoo is worth that asking price....microsoft is agressivly trying to consolidate the web advertising market and level the field with google. Somehow...I dont see that happening.

The day I loose my flickr account... (0)

Anonymous Coward | about 6 years ago | (#22996252)

...and see it turned into a horrible myspace-like blog with my beautifull jpgs recompressed into muddy crap, will be the day I strap a belt full of dynamite arround my chest and start the final run to Redmond.

Hope more like me feel the same.

eh (-1, Troll)

Anonymous Coward | about 6 years ago | (#22996286)

Wow more microsoft vs. yahoo drama... I hope microsoft just buys yahoo already so I don't hear about this anymore.

Please check out my website for ways to make money online
http://mikesmoneyclub.blogspot.com/ [blogspot.com]

Translation (0)

Anonymous Coward | about 6 years ago | (#22996532)

"Psssh, what-ev. More money, plz."

Smart move by Yahoo (1)

melted (227442) | about 6 years ago | (#22996804)

They know Microsoft is offering all the money they've got, so by asking more they say "no" without pissing off the shareholders and at the same time play to their shareholders' primary instinct - greed. This makes it less likely for Microsoft to win in a hostile takeover scenario.

Microsoft Yahoo! Vista 2008 Ultimate Edition SP2 (1)

suck_burners_rice (1258684) | about 6 years ago | (#22996922)

In other words, Microsoft Yahoo! Vista 2008 Ultimate Edition SP2 hasn't quite been announced, at least not yet.

Last Stand (1)

deanston (1252868) | about 6 years ago | (#22996938)

Jerry Yang knows that Yahoo's days are toast. He's just messing with Ballmer cuz Ballmer deserves it. Then the top guys at YHOO will cash out and start their own company again. Leaner and meaner.

If Yahoo really wanted to shake off MS, it could have set up a new subdomain and show the strength of loyal Yahoo users who will leave when MS takes over by asking them to sign an online petition saying so. MS will be shock by the numbers, I think.

MS is basically admitting to the world that it cannot build an online empire on its own to take on Google without Yahoo's help, so why shouldn't Yahoo play up its value?

Someday Alibaba will buy MS with chum change.

Load More Comments
Slashdot Account

Need an Account?

Forgot your password?

Don't worry, we never post anything without your permission.

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>
Sign up for Slashdot Newsletters
Create a Slashdot Account

Loading...