Yahoo Inc’s board believes Microsoft Corp’s unsolicited bid of USD 44.6 billion to acquire Yahoo ‘massively undervalues‘ the company and directors are set to reject the offer, the Wall Street Journal reported on Saturday, citing an unnamed source. Microsoft’s USD 31 per share offer fails to take account of the risks that a merger between the world’s largest software maker and Yahoo would be rejected by regulators, the paper reported, citing ‘a person familiar with the situation’. A spokeswoman for Yahoo, a diversified Internet media company, declined to comment on the proceedings of the company’s board of directors.
…isnt Microsoft overpaying for Yahoo stock?!
Well… stock price is not everything. Y! is really low now – that’s true, but maybe they have something which makes them so valuable (i.e. for Microsoft)?
Time will tell. I think that MS will give another offer. OTOH I hope that Y! will not be a part of Ballmer’s party.
Kind regards,
I’m not sure Ballmer can put in another bid, Microsoft has dropped some 12% in share value since the offer, and Yahoo! has gained, erm, 30%? from it’s recent low.
If they offer a larger bid, (which they probably cant, stocks arent worth enough), it would prolly make their shares slump quicker. We’ll see, I guess.
What they have is a hell of alot of marketshare when it comes to web applications, let alone search. MS really wants both, even though they have had a really odd way of going about getting it.
What I don’t understand is why Google doesn’t offer to buy Yahoo, unless they are scared of the monopoly stick too.
Microsoft is paying a “fair” price based on historical PE of around 70. 70 itself is quite outrageous. Yahoo is demanding a minimum PE of 90 and that is way over the top.
The PE on most of these online companies are ridiculous. Always has been the case. Yahoo! should get off it’s high horse because I remember history well.
Anyone remember AltaVista? I do.
Analysts (who I’ve never put that much credibility on) were saying it was worth billions, then after the .com bust and the rise of Google it wasn’t worth so much.
Hell, I even remember Infoseek.
Used to be great.
The good old days. Ok maybe they weren’t that good. But I agree, infoseek used to be the best engine around hands down.
Funny. I hadn’t thought about Altavista in years, and then happened to think about them yesterday, and went to the site just to see if it was still there.
They were king once upon a time. I remember it explaining in their FAQ why showing the context of the search words in the results was not feasible. Google does. Sometimes the best technology *does* win out.
Hotbot was my search engine of choice. The metric I used was which search engine could fid my high school’s page, and only Hotbot did it, and it seemed to do well at other stuff too. Back in the day, when Opera switched from it to that upstart Google, I went through the trouble of figuring out how to get it back. Of couse, Google won me over eventually. Hotbot is still around, the way gravestones are still around next to the Oregon Trail.
I dont think Yahoo is quite to that stage yet, but I would imagine it’s a matter of time. Microsoft’s offer seemed decet monetarily.
Yes and also Lycos.The search engine/web portal of choice way back during the Netscape/Explorer browser wars.
If the money is right, Yahoo will do it anyway. Money talks first, we’ll deal with the regulators and consequences after.
I personally think Microsoft are mad to do a deal like this with the economy looking how it is, if they do it just means one less company to deal with on the search/web.
It’s best to do purchases when the economy is down rather than up, if you can afford it. Things are cheaper that way.
Oh well, I guess we won’t be seeing MicroHoo! if this article is true.
…you will be assimilated.
😉
and stuff!
Edited 2008-02-09 21:38 UTC
For those who are new here the OS in OSNews actually stands for over sensationalized
Title should read Yahoo said to have rejected Microsoft.
What you read somewhere else, by an author who heard from someone else, who in turn heard from Mr A Noni Mouse, should not be stated in a matter of fact manner.
Edited 2008-02-09 21:58 UTC
Err, did you actually read the blurb here on OSNews? It makes perfectly clear this is not an official reply.
A rumor I read a few days ago mentioned that Microsoft may have to borrow money if the deal were to go through. Seems they’re pretty serious about buying Yahoo if that’s true.
Things were looking grim for Yahoo, but their new strategy hasn’t even played out yet. They’ve got a renewed focus on search (their engine had been outsourced to Google previously), and Yahoo’s search infrastructure is actually based on open source Hadoop technology.
I always thought Yahoo had a better grasp on the social aspect of the Internet, while Google was better at the technological side, if you look at their acquisition history.
Yahoo also has a chance to do something great with Zimbra if they play their cards right. The MS deal could be as much about fear of a viable open source Exchange competitor (as Novell already canned Hula) as about gaining better brand recognition and marketshare.
Besides, since when has MS ever bought marketshare? Talk about showing weakness to the MS faithful. And talk about taking a big crap on MSN and its .NET stack. For all their faults, that company has ever been one to succeed as a lone wolf. A rabid wolf, but an independent one.
MS would do well to eject Ballmer, who has major Google-envy, and focus on .NET — probably the best thing to have ever come out of that company.
Why not take that 40 billion and fork it out as bounties to developers to enhance a new Windows kernel and .NET runtime? That would be so killer. Their bounties for significant contributions could be huge. And if they released the specs as open and free but kept the implementations for themselves, they would gain goodwill from the majority of the contributors, I would imagine, who would go home with nice chunks of change anyways.
Edited 2008-02-09 23:37 UTC
Honestly, I doubt MS has to worry about its exchange deployments so much as IBM has to worry about lotus when it comes to Zimbra. If you are a MS shop, exchange is so well integrated with your existing technologies that there is no real point to go anywhere else. If you are a mixed shop, or a nix shop, there is no real reason to go exchange.
Hell yeah. Ballmer has repeatedly shown himself to be a complete loon.
I don’t know how they can focus any more on .net though. It is moving so fast as it is, that hard for us developers to keep up. Look at 3.5… WPF is HUGE, WCF is HUGE, WF and CardSpaces are big, but not as massive as the first two. Not to mention the optional frameworks coming down the pipe (like MVC and Astoria (for REST) for us ASP guys). Its going to take a few years to get a handle on what we have, let alone get comfortable with it.
I would be willing to kill to get them to put .net under the MS-PL. That is a pipe dream though, at least for the foreseeable future. And there really is no chance for them to open up windows.
it is fun to dream though.
“If you are a MS shop, exchange is so well integrated with your existing technologies that there is no real point to go anywhere else.”
Well, at least Zimbra provides a migration path away from Exchange for those who want it. For instance, the company I work for has been moving away from MS ever since MS has started making moves into our market, healthcare IT. Their purchase of WebMD and talk about creating their own electronic medical record banks has us looking to move our .NET stuff to Java and more applications to Linux. We’re not comfortable with relying on a competitor’s technology. Internally, it’s not so much a problem, but we don’t like selling products that rely on a competitor’s underlying platform. But we eat our own dogfood, as the saying goes, so we’re learning how to run an open source in-house IT for at least our IP wing since that’s now our preferred deployment target. And we’re finding that this part of our infrastructure is giving us a lot less headaches after some initial tweaking.
Edited 2008-02-10 19:13 UTC
Thats so true.I have found yahoo chatrooms to have been extremely popular over the years and still is.I think that did well for the rest of their products since alot of chatters played yahoo games for example.
The Microsoft Msn chatrooms closed down and the google ones never seemed that popular to me.The general fear of my chat comrades is that with Microsoft aquisition their pastime will either come to an end or be severely limited.
phew…
At the top of the internet bubble, the net worth of Yang and Filo was about 40 billion. I believe Filo was worth 18 bil and Yang 22 bil.
It’s typical that Yang won’t take the offer. To this day, he still doesn’t know when to sell.
Yahoo is obviously huge in the USA. I doubt it has much impact elsewhere. Yahoo has an Australian site but practically no local influence. We search with google and have gmail or hotmail accounts.
It isn’t whether or not he wants to have Yahoo! bought by Microsoft that he has to decide, but whether or not he can demonstrate that he’s done due diligence as the CEO and one of the board members (whom are also all under this restriction) as to maximizing the value for shareholders. This may not give him the option of saying “I won’t let Microsoft or company X buy us out!” but when it comes to that sort of thing, the least he can (and must) do is to demonstrate that he fought valiantly with all resources at his disposal to get the best terms available when it comes to a serious offer to buy out the company in a friendly takeover, or a hostile one. Most Yahoo! employees (of which I’ll be full-time, permanent officially as of Monday) have the luxury of having exactly one boss to report to (well, I’m hoping that’s how the company is run in practice, but with > 14K workers, I don’t know the whole org chart) and the ramifications if they goof off/screw up generally aren’t all that great, but if the CEO or other board members violate their fiduciary duties to shareholders, they’re in deep legal trouble.
Now, as to the value Yahoo! has that Microsoft wants? There’s more stuff involved than market share and brand recognition in any given area, and earnings per share. There’s tangible assets I’ve read from other news stories valued at > $15 billion, and then there’s the overall asset of the technical staff, which Microsoft, with all its power and money, can’t simply go hire and get the same expertise and experience, combined as well with getting already integrated teams that are accustomed to working together towards a common goal. Someone unnamed from Google stated that Google is afraid of Microsoft going out and just hiring 2000 engineers and becoming competitive in any given market (this is my paraphrase), which demonstrates their severe lack of understanding of what is possible and feasible in the real tech world in these matters. For one thing, most tech companies (Microsoft is famous for this) have a very time-intensive, heavy duty interview process that involves many people for each interview, and a whole day of interviews for one candidate is far from being unusual. I’ve personally (during a time after I was laid off) interviewed for 3 different Microsoft contract positions, and all it takes is for a single person in the process to disagree, and you’re not in. It’s not uncommon for candidates (even those currently working there) to not make it through half a dozen position interview processes before they’re able to make it through the gauntlet, and Microsoft’s process is based on the theory they’d rather miss out on someone that’s a good candidate rather than let someone in that’s not quite what they want. I’ve also interviewed at amazon.com (same time period) and a few other places in the area, and the interviews are just as crazy and time-consuming. Yahoo!’s interview process is also just as demanding, at least from my experience while I first interviewed for a contract and then for the full-time position (after being there > 9 months) and so is Google’s, only Google may stop you from being interviewed because they turn their nose up at your formal educational background (happened to me, despite a dozen years of solid experience).
Where Microsoft may very well have a harder time than any regulatory hurdles and that of coughing up an offer the Yahoo! board of directors can accept for stockholders, is keeping the technical staff that they’d really want to keep: many people I’m working with previously worked at Microsoft, and there are reasons they no longer work there of their own, and there’s a major cultural difference that’ll be hard to overcome if Microsoft should choose to assert their ways, should they accomplish the takeover on paper and get through all the legal/financial hurdles. There’s at least one article I read online (I think the Friday morning they made their announcement) that Microsoft would provide retention packages for the engineers, but… well, should this all happen, that remains to be seen if they’ll carry through ( I know they screwed up the valuation of my stock options, curse Steve Ballmer!), and even then, money isn’t the only motivator for a lot of workers, especially spirited Technical Yahoo!s. I can’t help but wonder if Microsoft may manage to buy the assets that can be sold, but lose the ones that can’t be bought.