View Poll Results: Microsoft Bid to Yahoo

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  • Hostile

    10 76.92%
  • Friendly

    3 23.08%
Results 1 to 18 of 18
  1.    #1  
    I need to bring this topic out here because the original discussion focuses to the Sprint situation.

    I want to get a feel of how T/C members understand corporate bids to buy another company. Microsoft offer to for Yahoo at $31 per share is an aggressive buy out position at a point in time when Yahoo's stock was below $20. While there was internal negotiation between Yahoo and Microsoft to come up with an amicable arrangement, Microsoft felt it was time to bring the negotiation out to the shareholders (and the public). Microsoft position has changed to: "If you don't want our terms, we will take this case to the shareholders to buy you out."

    Please post your understanding of what a hostile bid versus a white knight in business terms.
  2. #2  
    Well, it's not a hostile offer, yet. Microsoft made an offer to the Yahoo Board. The decision still rests with the Board, and the transaction would be considered friendly if the Board approves a deal, in some form.

    By making the offer public, it changes the dynamic of the negotiation. The market has reacted to the offer, and the Board now would need to justify a decision to refuse the offer. In private negotiations, the Yahoo Board might focus on issues of control and layoffs, along with price; but now price will be the driving factor for shareholders.

    If the Board rejects a deal, then Microsoft could pursue a hostile takeover, though I personally doubt that would happen. That would create lots of bad blood in Sunnyvale. Hostile takeovers work fine if slashing expenses is the primary driver of the deal or if you could easily replace the management team in the target company, but in this case, the goal of building a viable competitor to Google is a major priority, and you can't do that if the best people don't want to stay. Plus, Microsoft is particularly sensitive about its reputation as the evil empire.
  3.    #3  
    So, if I were the CEO of Yahoo, don't I see the Microsoft public bid as a threat to the company?

    I understand the Board still has to approve the purchase but that also tells me if the board approves it that they are telling me that my company will have a harder time to put up a recovery plan under my tenure. Isn't that a rebuff to the current CEO? I guess that's the harsh position but it is business if Yaboo board take its current financial situation as dire and desperately needs help.
  4. #4  
    Not a threat to the company. A threat to your vision for the company and your desires to manage the company independently and to prove yourself as a capable CEO.

    The Board will definitely assess its future under Jerry Yang vs. joining up with Microsoft, but it's only partly a referendum on his skill as a manager. There's much value that could be created through the merger that just can't be achieved going it alone - for example cost savings from eliminating overlapping operations, and the market power gained in the online advertising business that would be gained through greater market share.

    But the most basic question the Board will ask is if the company can raise its stock price to the bid level on its own. Given the volatility of the stock and the fact that it was even higher just a few months ago, you can make an argument that it can be done by reducing costs and improving ad revenues. They might also evaluate whether they'd be better off joining up with another company like AOL, in which case, Yahoo management would likely have the upper hand.
  5. Christiene's Avatar
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    #6  
    Well at least we don't have to worry about going to different search engines if we are going to look for something we like. MSN-Yahoo would be an excellent tandem versus Google.

    And besides, at 40+ Billion dollars, who wouldn't sell their company for that price?
  6. #7  
    Quote Originally Posted by ronbo2000 View Post
    So, if I were the CEO of Yahoo, don't I see the Microsoft public bid as a threat to the company?
    Which is worse:

    1) being crushed by google, and being purchased cheaper later
    2) being crushed by Microsoft after they use the money to buy you to purchase other properties and start heavy marketing (not to mention #1)
    3) being purchased by MS and providing some hope to your shareholders of a combined company that can compete with google
    4) go forward with he hopes that my management team and I can develop a strategy that can win in the marketplace
    5) look for other options.

    As a Y! CEO I would consider all options. What is best for the company and its shareholders? What happens in 3, 5 and 10 years (best guess from those MBA/PHD types I have on staff/consultants)? Those are the questions.

    To your original question, hostile or friendly. Depends on how you want to spin this. By most terms, it is not hostile. In "pub" talk, it can be considered hostile. I believe that one link hit on on the head when the yahoo exec. said it was "aggressive." MS had already laid down that they would be aggressive if google's double-click deal was approved. They are being true to their word.
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  7. #8  
    Either Yahoo is just playing hard to get or they are now telling Microsoft to go fly a kite. We'll see.

    http://news.yahoo.com/s/ap/microsoft_yahoo
  8. Christiene's Avatar
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    #9  
    Well Yahoo seems to have turned down Microsoft's offer. They want more money because they think MS is undervaluing them. Sucks to be Yahoo right now.
  9. #10  
    Sweet! Let Microsoft takeover!! I'm probably one of the only die hard Microsoft fans left! Die Apple Die!!
  10. Christiene's Avatar
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    #11  
    But if the MS deal becomes successful (in buying Yahoo)...What would the Search Engine be called? MSN Yahoo? Are they going to drop MSN?
  11. #12  
    Quote Originally Posted by Christiene View Post
    But if the MS deal becomes successful (in buying Yahoo)...What would the Search Engine be called?...
    it will be called boo hoo...

    Unless M$ pulls the same shiite they did with Netscape, the combined MSN Yahoo will be a loser.

    What do you get when you combine the number 2 and number 3 ranked search engines ???

    The 5th ranked search engine.

    The story is not really search engines -- its about advertising, social sites, and much else.

    I have more to say -- maybe later ...
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  12.    #13  
    Quote Originally Posted by BARYE View Post
    it will be called boo hoo...

    Unless M$ pulls the same shiite they did with Netscape, the combined MSN Yahoo will be a loser.
    Did they try to buy Netscape? Netscape lost because IE was integrated with the main OS PC's are sold with and then also given away free.

    Quote Originally Posted by BARYE View Post
    What do you get when you combine the number 2 and number 3 ranked search engines ???

    The 5th ranked search engine.
    You are too quick to judge on this one. M$ will make its acquisition look like its made by MS from ground up, hence Yahoo never existed once this is complete.
    Quote Originally Posted by BARYE View Post
    The story is not really search engines -- its about advertising, social sites, and much else.

    I have more to say -- maybe later ...
    Yes, it is about ads, etc. and yes, you do have more to say.
  13. #14  
    Quote Originally Posted by ronbo2000 View Post
    Did they try to buy Netscape? Netscape lost because IE was integrated with the main OS PC's are sold with and then also given away free.


    You are too quick to judge on this one. M$ will make its acquisition look like its made by MS from ground up, hence Yahoo never existed once this is complete.

    Yes, it is about ads, etc. and yes, you do have more to say.
    Yahoos been broken for sometime.

    For years they've had both an identity and a mission crisis.

    As a one of the web's premiere pioneers, they had the potential to become what Google became.

    And as I already said, this isn’t and wasn’t about search.

    Yahoo is really the sole survivor of the original dot bomb "Portal" fad: The concept of a launching/landing stage from where everyone would begin their web journeys.

    Alta Vista, Excite, AOL, Netscape, Time, ABC, Disney, and many many other companies now little remembered, pursued this same idea.

    Yahoo's conglomeration of disparate unconnected ideas formed a whole greater than the sum of its component parts. A whole that held the loyalty of its users.

    There were other superior available search engines other than yahoo even before Google arrived. There were other web mail services. Picture services, meetups, calendars, news agregators etc. Yahoo offered all of that together.

    Eventually they offered great tools like a simple bookmarking toolbar and free antispyware.

    Yahoo had a huge loyal base. As maybe the largest survivor of the dot bomb bubble, they were exquisitely positioned to reap the advertising golden rain that eventually came. They were on the verge of becoming THE dominant web property.

    Then Google happened.

    Yahoo which originally used humans to catalog the web, contracted with Google to handle their search. All was good -- especially for Google (owned in part by Yahoo btw). Google had figured out how to make money with search, something Yahoo had considered mostly an expensive service.

    Covetous of its sub contractor's profits, Yahoo decided to compete with its own search engine. It spent a billion bucks ?? buying and developing search technology from Inktomi to compete with Google.

    Instead of leveraging their own native strengths through its vast audience (and their intimate knowledge of that audience), and letting Google handle their search, Yahoo invested time, money, and effort in a fruitless search for comparability with Google -- a company which uniquely specialized in that specific niche.

    One of the primary reasons Yahoo specifically bought Inktomi was Inktomi’s “success” at something referred to as “paid search inclusion”.

    This was a technique where I could for instance, pay Yahoo to ensure that BARYE came up as the first site in any search for the world’s greatest primate.

    Yahoo was not alone in its willingness to subvert search results to cash.

    But this was in marked contrast to Google -- which always maintained the integrity of its search results, always differentiating between paid ads and search answers. Web users eventually caught on, and they began to trust Google implicitly over all others.

    Yahoo expected that when it severed its relationship with Google, that Google would be damaged. Damaged both by the loss of Yahoo’s eyeballs and referrals, as well as by the search engine Yahoo would rollout which had the advantage of launching from Yahoo’s existing massive audience.

    But instead of hurting Google, Yahoo’s severing of its relationship with Google liberated them to become Yahoo’s primary competitor.

    Google’s immense profits in its primary search/ ad word niche has fed its larger ambitions. Ambitions that would be regarded as arrogance and hubris were they from any other company.

    Its ambitions have inspired Google to stray from just being an advertising/search superpower, to wander onto and tread M$’s private land.

    In terms of the web environment, M$ is in some ways like Yahoo was a few years ago versus Google.

    M$ would not so much fear Google had they just stayed in search. But they’ve begun to offer for free things like web based document and spreadsheet programs, web mail, youTube etc. etc. They’ve even begun to develop an OS for cellphones to compete with Windows mobile. All of this is perceived as a threat to Bill Gate’s cash register. That’s the why behind the deal.

    What became of Yahoo ??

    It lost sight of what it was about itself that was special and unique. Its attention diverted to things where it was weak, it damaged its core enterprise. As a long time loyal Yahoo user, I regularly felt alienated by changes they attempted to force me to adopt. Changes that severely damaged the user experience.

    Four days prior to the M$ bid -- after yet more Yahoo “upgrade” attempts, I wrote this in a Yahoo forum: “...This appears to be another "feature" added by yahoo to harass and alienate their customers.

    All part of their grand strategy of lowering their stock price until they can be acquired for candy change...”

    Yahoo’s been broken for a long while -- but merging with M$ is not a cure.

    Can buying Yahoo and integrating their conglomeration into its own save M$??

    Not unless they succeed in repeating what they did to Netscape: i.e. leverage their Windows near monopoly to manipulate the environment so as to disadvantage Google.

    Its unlikely that even a McCain presidency would allow that.

    I can’t visualize any M$/Yahoo hybrid being anything but less than the sum of its parts.

    There is no natural synergy there -- no inspired overlording webmaster to bring a special voice and creativity to the conglomed enterprise.

    The only advantage the deal offers in the near term to M$ is a potentially better marketplace for national advertisers. But that only works as long as M$ keeps the audience its buying.

    I’m dubious that they can do that.


    (most everything I’ve written is from memory -- so some details may be wrong)

    And BTW -- I've not been around much because of how I feel about the inapropriate banning of participants here.

    I may write more on that too ...
    Last edited by BARYE; 02/18/2008 at 10:23 AM.
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  14. #15  
    Quote Originally Posted by Christiene View Post
    Sucks to be Yahoo right now.
    Yep, but i'm sure the journalist Shi Tao would agree that being sent to prison sucks even more. As for Yahoo.... you reap what you sow.
    Iago

    "Good name in man and woman, dear my lord, Is the immediate jewel of their souls: Who steals my purse steals trash . . . But he that filches from me my good name Robs me of that which not enriches him
    And makes me poor indeed."


    Criminal: A person with predatory instincts who has not sufficient capital to form a corporation.
    - Howard Scott
  15. #16  
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  16. Christiene's Avatar
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    #17  
    Quote Originally Posted by BARYE View Post
    Now that's a point probably LOL
  17. #18  
    Quote Originally Posted by Christiene View Post
    Now that's a point probably LOL
    More and more are seeing the Boo Hoo merger as folly.

    No longer is BARYE alone in dubiousness. ( )

    Forced mashups of incompatible giants is a formula for pain and chaos. Both get damaged -- especially the acquired.

    If M$ wants to get market share/eyeballs they should either build better products -- or cheat (i.e illegally manipulate their browser-OS monopoly). Getting a dominant market share through acquiring yahoo is delusional.

    Inspired by desperation, this deal will ultimately harm M$ too. As such I would support allowing them to get yahoo's number 2 search engine.

    But letting them buy yahoo's multiplicity of other sites: picture/video sharing, calendaring, document sharing, groups, social networking, messenging, mail, portal etc. would be a mistake.

    M$ is unlikely to allow the Yahoo branded sites continued independence and autonomy within the M$ "family" -- they will almost certainly want to merge those sites with existing M$ properties.

    Where this will prove especially catastrophic is when M$ attempts to compel Yahoo to adopt M$'s software infrastructure. I assume a company that needed 6+ years to produce a hated "refresh" of its OS, lacks the intellectual bench depth to also now manage such a mammoth undertaking successfully.

    Of All the Hurdles to a Merger, ...Technology Is the Highest
    By JOHN MARKFF and MATT RICHTEL NY TIMES

    If Microsoft succeeds in its conquest of Yahoo, what then?

    ...When it comes to technology, Microsoft and Yahoo “are completely at odds with one another,”...

    ...Microsoft must figure out how to integrate the two complex and almost entirely incompatible software systems that the companies use to run their vast Internet data centers.

    The companies have raced to build those data centers in what has been a futile effort to catch Google. Microsoft’s data centers run on proprietary software that is incompatible with the open-source programs and applications adopted by Yahoo. ...

    Such integration challenges have in the past hampered other big technology mergers. Sprint and Nextel, for example, have struggled to combine forces after their merger three years ago.

    Several investors and technologists said that because of the risks involved, Microsoft might decide to keep the Yahoo services largely separate, or sell off parts that overlapped.

    “Yahoo is just too big to switch over,” said Brady Forrest...

    ...Mr. Forrest was part of MongoMusic.com, a small music start-up acquired by Microsoft in 2000. At that time, Mr. Forrest said, programmers spent the better part of a year rewriting MongoMusic’s technology infrastructure to make it compatible with that of Microsoft. “It was painful,” he said.

    Yahoo’s size may force Microsoft to take an unprecedented step and allow Yahoo to continue to operate its own infrastructure. For instance, the two companies have a large customer base for their free e-mail services that combined could be as large as 500 million accounts.

    Disrupting that service or forcing customers to change Internet messaging or e-mail addresses would alienate customers and decimate that base. But failing to find synergies could reduce some of the $1 billion in cost savings that Microsoft has said would result from the merger.

    Skeptics of Microsoft’s ability to eventually digest Yahoo’s infrastructure point to the initial embarrassing failure that occurred when Microsoft tried to absorb the Hotmail electronic mail service it acquired in 1997.

    At the time the service ran on the open-source FreeBSD and Sun Solaris versions of the Unix operating system. Microsoft tried to move the service to its Windows NT operating system, but that was unsuccessful.

    Later it was able to move it to a more advanced version of its Windows Server software, but was still chagrined when open-source advocates found that FreeBSD was still being used for portions of the service that required performance and stability. Microsoft acknowledged that Hotmail’s transition took 3 years, but some analysts say they think it took even longer. While Microsoft has built its Web services largely using its proprietary tools like the .Net programming system, Yahoo has a well-known open-source culture.

    Yahoo principally uses FreeBSD, which is well regarded for its stability and its strong security.

    Yahoo also uses the Java programming language as well as the PHP scripting language, which is widely accepted as a tool for rapidly building and maintaining the dynamic Web pages that are at the heart of its many Web services. Indeed, the creator of the PHP language, Rasmus Lerdorf, is an infrastructure architecture engineer at Yahoo.

    Finally, Yahoo relies heavily on a parallel programming tool that will take a program that is written for one computer and extend it to run on hundreds. This allows Yahoo to scale up the power of a search engine algorithm, for example. (The program was invented at Google, but Yahoo uses an open-source version called Hadoop.) Microsoft uses its own competing system...
    Last edited by BARYE; 02/22/2008 at 09:46 AM.
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