Yahoo and Microsoft Come Back to the Table
With more money at play, merger talks resume
by KathrynV 09:50AM Saturday May 03 2008 Tipped by FFH
Microsoft and Yahoo have resumed discussions
about a merger after three months at a standstill on the issue. During the first round of discussions, several large companies (including Google
) stepped in to deter the deal. The main issue has (of course) been money; Yahoo believes that its company is worth more than Microsoft wants to pay. In order to break the standstill, Microsoft has gone ahead and offered more money than previously. However, the dollar amount per share that the company is offering doesn’t meet the amount that Yahoo is seeking so the people involved say that there is still only a 50% chance that the deal will be made.
Re: Take the money and run......
said by S_engineer:Agreed.
Yahoo shows no real credible signs of expansion w/out some sort of intervention...they will be relegated to tomorrows AOL status!
North Richland Hills, TX
Re: Take the money and run......
said by itnetpro: Yea but if Yahoo took the trash out of yahoo ie spam bots, All those mass booter ,mass ignore, hacker type etc..... they would have plenty of $$$$ as they won't be paying as much in bandwith fees.
They have money and buy innovation so Yahoo needs them more then Microsoft needs Yahoo. Just like Zune vs IPod and XBox 360 vs Wii and soon enough PS3. Microsoft again will find itself as the underdog going up against Google so don't be concerned about them taking over.
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Microsoft calls it quits - drops bid for Yahoo »www.news.com/8301-13860_3-993509···1_3-0-20
Update 2 p.m. PDT: Microsoft has made its move official. Click here for the story and here for the text of a letter Ballmer sent to Yang.»www.news.com/8301-13860_3-9935100-56.html
Microsoft is withdrawing its offer for Yahoo after talks between the two companies broke down on Saturday, a source told CNET News.com on Saturday.
Microsoft hiked its offer to $33 a share, but Yahoo was holding out for $37 a share, the source said. The two sides met face to face again Saturday, but remained far apart.
Microsoft officially pulled its offer for Yahoo on Saturday, confirming an earlier report by CNET News.com.»www.news.com/8301-13860_3-9935101-56.html
May 3, 2008
Mr. Jerry Yang
CEO and Chief Yahoo
701 First Avenue
Sunnyvale, CA 94089
After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.
I first want to convey my personal thanks to you, your management team, and Yahoo!s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.
I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.
In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.
Also, after giving this week's conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.
We regard with particular concern your apparent planning to respond to a hostile bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:
First, it would fundamentally undermine Yahoo!s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.
Given this, it would impair Yahoos ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.
In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.
This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.
It could foreclose any chance of a combination with any other search provider that is not already relying on Googles search services.
Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsofts proposal to acquire Yahoo!.
We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.
I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.
But clearly a deal is not to be.
Thank you again for the time we have spent together discussing this.
/s/ Steven A. Ballmer
Steven A. Ballmer
Chief Executive Officer
My BLOG .. .. Internet News .. .. My Web Page
And Yahoo responds to MS withdrawal We'll see if that "independent" board of directors is still smiling after their stock price drops Monday morning.
Roy Bostock, Chairman of Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company issued the following statement today in response to Microsoft Corporation's announcement that it has withdrawn its proposal to acquire Yahoo!:
"We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets. From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view. Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making. Today, Yahoo! has:
-- a refined strategic focus to drive enhanced volume and yield;
-- reorganized to focus its efforts on its most promising products and services;
-- invested in innovations designed to revolutionize display advertising and facilitate closing the competitive gap in search; and
-- enhanced expense and resource management to support improved profitability."
Jerry Yang, co-founder and chief executive officer, Yahoo! Inc. added, "I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position. With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."
My BLOG .. .. Internet News .. .. My Web Page
Re: microsoft's bid to yahoo!...
said by mysterious dude :Say good bye to Yahoo they are going to die a slow death.
... is not worth to buy. Whew! I'm glad that yahoo! is not sold to Microsoft greedy machine.
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