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Microsoft Withdraws Proposal to Acquire Yahoo! | |
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| Time: 23:32 EST/04:32 GMT | News Source: Microsoft Press Release | Posted By: Jonathan Tigner | ||
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Microsoft Corp. (NASDAQ: MSFT) today announced that it has withdrawn its proposal to acquire Yahoo! Inc. (NASDAQ: YHOO). “We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees,” said Steve Ballmer, chief executive officer of Microsoft. “Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer. After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Ballmer. | ||
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| #1 By 143 (74.129.194.180) at 5/4/2008 12:04:24 AM |
| Another Ballmer black eye? |
| #2 By 23275 (68.186.182.236) at 5/4/2008 1:20:15 AM |
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@1, Hardly. The proposal made a great deal of sense - as did the reasons for withdrawing it.
Mr. Yang is the one with the black eye and it is improbable that he will survive this. Similarly, Yahoo is going to lose a great deal of value very quickly. In the meantime MESH and Windows 7 stare down on all and any dev with his/her eyes open is salivating over the new world that is just a few years ahead of all of us. Mr. Yang's decision will go down in history as among the most unfortunate ever made. |
| #3 By 7390 (24.191.94.122) at 5/4/2008 7:17:16 AM |
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I agree with that withdrawing was/is the best thing! at this juncture they would only be buying yahoo in name only. Most of the employees would have left or sabotage the current assest. There would have been zero positive spin in this.
Focus on Windows 7, Silver light, .NET et al |
| #4 By 15406 (99.224.112.94) at 5/4/2008 8:37:30 AM |
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Geez, Microsoft is magical and can do no wrong. It was brilliant of them to bid for Yahoo, and now it's brilliant of them to withdraw their offer. No matter what MS does, they're brilliant! Trebles all 'round!
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| #5 By 23275 (68.186.182.236) at 5/4/2008 9:13:09 AM |
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The paid advertising book made sense at 37 billion - it makes less sense at 46 billion. That's the difference.
It's just business and in both cases, Steve Ballmer made the right decision. In both cases, Mr. Yang borked the pooch and he'll pay for it - right after his shareholders (you know, the people that own the company). As passionate and driven as any one of us might be about what we build, it comes down to business. Public equity being what it is, Yang signed his own death warrant. Read Ballmer's open letter to Yang again - it is easy to see how stunningly foolish Yang has been. He's done and so is Yahoo. Google had better start hiring some people with a few grays hairs right now, or they are next. I mean, if web 2.0 is so great, because it so "easy" and open, what makes people think that the likes of Google and Yahoo are the only ones playing. Look at MESH again. Look closely this time. Google is as good as dead. |
| #6 By 16302 (24.72.70.37) at 5/4/2008 10:46:48 AM |
| Withdrawing the bid makes a lot of sense. I personally do not think that Microsoft would have received a good value for its dollar purchasing yahoo. There will be a correction in online advertisements, and the DOJ is eventually going to look into Google - when either of these happens, Microsoft will benefit. Microsoft is better to focus on Silverlight, Mesh and Live. How many programmers could you hire with $40B dollars, and how many products could they curn out? lots! |
| #7 By 143 (74.129.194.180) at 5/4/2008 10:50:20 AM |
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"Google is as good as dead."
Sounds like Ballmer's been smoking that microweed again. What will happen is Yahoo will merge to boost up the stock price. The Yahoo stock holders are unanimous when it comes to NOT wanting Microsoft around. So, Mr. Yang will look like his taking care of the stock holder wishes and Ballmer will have Vista on his face again. |
| #8 By 8556 (12.210.39.82) at 5/4/2008 11:06:58 AM |
| Ballmer's move comes out of Larry Ellison's playbook. Now wait for Yahoo's stock to drop further in value. When such time comes Microsoft likely will quietly prepare for a hostile and more afforable takeover of Yahoo. Any deals done by Yahoo before that time can be undone if not too costly. If Yahoo is able to swing a wider deal that adds to their stock value, that would likley end MS's takeover attempt as the price will be too high even for MS. The deal makes less sense now anyway since Yahoo sold off part of their East Asian search holdings, which MS deeply wants, to move into the growing Asian markets. |
| #9 By 23275 (68.186.182.236) at 5/4/2008 12:35:30 PM |
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No, MS and Ballmer will not be back, but Capital World Investors' lawyers and many other surely will be.
Yahoo loses, MS gains - as it begins to execute on its S+S strategy. Google is dead meat. |
| #10 By 8556 (12.206.195.4) at 5/4/2008 1:47:06 PM |
| #9: Lloyd, if by "dead meat" you mean Google is alive and well, then I agree. |
| #11 By 3653 (65.80.181.153) at 5/4/2008 2:01:46 PM |
| Even if you aren't a ballmer fan, you gotta admit he's got a nose for business (and no, i'm not making a jewish joke. How dare you even think such a thing). He quite literally has a green thumb and his instincts on this deal were as spot on as they've ever been. He just single-handedly took a wrecking crew to morale and business within the Yahoo walls. And the best trick of all... he did it while wearing a Jerry Wang costume. Yahoo's management and Board looked outright Hussein-like in their scorched-earth response. Yang will have no friends, come Monday morning when the bell rings. |
| #12 By 23275 (68.186.182.236) at 5/4/2008 5:03:12 PM |
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@11, Yep - exactly that. He just showed all Yahoo shareholders what it is to lose 17 Billion (with a big "B") at the drop of a hat - and at the same time, showing all Google shareholders just how vulnerable they are and both groups just how naive, stupid, foolish, and plain ole nuts the wbe 2.0 gang can be.
Where value is based upon "faith" ( I don't see a lick of speci backing any value in any company ) Jerry Yang just handed Microsoft the keys to the kingdom, and I would not for a moment dimiss the idea that Steve Ballmer and co. are smart enough to have known exactly what he would do. Bobs, no, I mean "dead" as in unanimated. They will be at ease more now and that is what will kill them. The old man will out work them. |
| #13 By 82766 (202.154.80.82) at 5/4/2008 5:25:42 PM |
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Can we assume that Ballmer didn't write that letter? If we did, he's a good word smith! From the letter, the whole process sounds like a friendly get together!!
Excluding everything else, the market said Yahoo should sell if Microsoft offered around $35 per share... in the end, Microsoft was offering $37 per share!!!! Yep, the market is going to cane Yahoo for not accepting that!! This post was edited by MyBlueRex on Sunday, May 04, 2008 at 17:29. |
| #14 By 3653 (65.80.181.153) at 5/4/2008 6:08:20 PM |
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One has to wonder how different things would have been if MSFT had offered $29/share (instead of $31/share) initially. Then raise the price to $33/share on both timelines.
Perhaps we'll still see something along those lines. Whatever happens, its fun as hell to watch. HBO dramas don't have anything on this. This post was edited by mooresa56 on Sunday, May 04, 2008 at 18:09. |
| #15 By 17996 (66.235.18.153) at 5/4/2008 7:25:29 PM |
| #13 -- Actually Microsoft's final offer was $33 per share. Yahoo demanded $37 per share minimum. |
| #16 By 20505 (216.102.144.11) at 5/4/2008 8:52:17 PM |
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I agree with those who have stated that this deal is a double win for Microsoft. They get out of a lousy deal and they will likely mortally wound a significant competitor.
I don't think Yang survives very long after letting this one get away. Even so, Yahoo may rise again (think Apple). The largest beneficiary of all of this maneuvering may still be Google. Keep an eye on ad revenue. |
| #17 By 1896 (68.153.171.248) at 5/5/2008 12:08:16 AM |
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#Iketchum: Faith is used in Churches; in the financial markets the P/E is what is used:
MSFT P/E 17 Forward P/E 15.50 Google P/E 40.90 Forward P/E 33.90 As for MASH so far I like what I see; I am not a big fan of "Storage online" with providers that "scan" your data etc. but still MASH has a huge potential. The problem is if it will deliver it or the entire idea will end up short; only time will tell...Longhorn docet. As for whose head will roll my personal opinion is that we will see more than one roll. This post was edited by Fritzly on Monday, May 05, 2008 at 00:09. |
| #18 By 23275 (68.186.182.236) at 5/5/2008 12:29:09 AM |
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@17, not since 1852, Fritz... we have a faith-based economy - e.g., value is not based upon gold, etc.... "The Speci Act" which led to our Civil War attempted to prevent a banking crisis - it failed. While it took awhile, and a few other acts (FDR in the 30's; pulling the gold standard in the 70's, etc... it was all decided a long while ago).
The relevance is that in such economies where speculation is such a factor, Yang won't survive losing 17B (even on paper). P/E ratios aside, MS has a lot more shares and far more assets and no one I care to trade with thinks GOOG is valuated properly - it has to be the single most over-valued stock there is. |
| #19 By 82766 (122.107.17.90) at 5/5/2008 4:10:11 AM |
| #15 - oops - a miss read by me! Yes you're right, $33 was the max per share. |
| #20 By 1896 (68.153.171.248) at 5/5/2008 7:17:18 AM |
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Iketchum: it is always a great pleasure to criss-cross with you; seriously.
I agree that Yang, the pompous "genius", will not survive, Ballmer? Let us check 9 to 12 months from now. As for overvalued stocks I saw much worse believe me; I remember CNET at $80 ! Was that faith? No, just perception. |
| #21 By 52115 (66.181.69.210) at 5/5/2008 7:42:44 AM |
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Save your stimulus check and buy Yahoo when it hits rock bottom. Right around the time Yang is kicked out as CEO and MS offers another bid for yahoo. This is when the stock will sky rocket and you'll make a good amount of money I'm sure..
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| #22 By 28801 (65.90.202.10) at 5/5/2008 8:57:43 AM |
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#9: "Google is dead meat."
Please pass that crack pipe! |
| #23 By 23275 (68.186.182.236) at 5/5/2008 9:01:56 AM |
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#20, Same here Fritz :) perception... speculation... faith in one company/stock or another... you get the point and that is all that matters - it's all about what people believe.
GOOG will see some lift - as they can now raise ad prices in the short term, but this will only make matters worse. They will do this and punctuate how naive they are. MS/MSN/Live - call them what you will, but they need to cut ad prices and use some of that gorgeous public PR displayed in recent weeks to take Google on in that context - a simple message (GOOG you and your prices aren't worth it, and our ads at 1/2 your cost are... - then communicate to the public). They can show just how hollow that boat is and do two things: 1) put massive pressure on Yahoo and 2) tip Google over hard within the next six months. All they have to do is rock the boat just a little. It won't take much. Finally, and I hope this happens... Yang does have to go, and go soon, but I doubt he will... not enough shareholders will recognize the power they have purchased. Too few do. This debate is really important in that context - if for no other reason than to encourage investors to leverage the share of voice they actually have. It can force BODs' to act as they should and hold senior managers to task. Ok... one last item... MS should really look at itself and get rid of "process" where process does them no good and streamline PM. They have to reduce the degrees of separation between engineers and their products. Virtualization support for legacy applications will allow them to ship the OS that Fritz, I and so many others want and frankly need. Bvlug was right about four years ago - he called it and wondered what Apple would do as more and more cores were available on each die and true x64 was upon us - he wondered aloud what Apple would do about MACH. MS has already won this and it will evolve so fast it will make our heads spin - and most won't know it happened. And how many Yahoo engineers will jump ship - not for GOOG, but for Redmond? They'll pick up some great minds. Mooresa is right - this is a lot more fun to watch than any series on HBO! |
| #24 By 23275 (68.186.182.236) at 5/5/2008 11:56:16 AM |
| so the street thinks it is not over.... just yet... MS! continue the great PR - come out with a definitive statement that you will not be back. Yeah, GOOG will benefit in the short term, but counter with smart buys elsewhere. Hammering Yahoo will weaken Google in the long term, but not damage the market overall. |
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