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Microsoft – Yahoo saga seems to be over!

May 4, 2008 Web 2.0 Innovations Leave a comment

Well, after 3 months of negotiations, speculations and rumors the saga between Microsoft and Yahoo seems to be over, for now. Microsoft has formally withdrawn their offer to buy Yahoo while the second publicly declared a victory for the Web at all. While there are clearly no winners in this virtual war here is what the people at Microsoft have told Yahoo today.

â€œWe 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,â€ said Steve Ballmer, chief executive officer of Microsoft.

â€œDespite 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,â€ said Ballmer.

â€œWe have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners. While Yahoo! would have accelerated our strategy, I am confident that we can continue to move forward toward our goals,â€ Ballmer said.

â€œWe are investing heavily in new tools and Web experiences, we have dramatically improved our search performance and advertiser satisfaction, and we will continue to build our scale through organic growth and partnerships,â€ said Kevin Johnson, Microsoft president for platforms and services.

On the other side here is Yahooâ€™s response to Microsoft

â€œWe 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 Microsoftâ€™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:

â€“ a refined strategic focus to drive enhanced volume and yield;

â€“ reorganized to focus its efforts on its most promising products and services;

â€“ invested in innovations designed to revolutionize display advertising and facilitate closing the competitive gap in search; and

â€“ enhanced expense and resource management to support improved profitability.â€

Jerry Yang, co-founder and chief executive officer, Yahoo! Inc. added, â€œI 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 Microsoftâ€™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.â€

The simple truth is that Microsoft has definitely been hurt on its image and is walking out from this with serious dose of frustration. As to Yahoo they will surely take a serious hit by the stock market, their market capitalization will be big time hurt and they are probably going to become an easy pray to private equity players. There are all signs to believe that Microsoft will eventually return for Yahoo when time comes and the valuations are less. Rumors have it that Yahoo might eventually pursue a merger with AOL. Teaming up with Google is not an option. Aside having anti-trust implications it might also hurt their Panama advertising strategy on the long term run.Â

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Acquisitions, Advertising, Business, Google, Internet, Investments, Media, Microsoft, Money, Public Companies, Software, Technology, Yahoo

Despite rumors Microsoft is highly unlikely to increase its bid for Yahoo

April 3, 2008 Web 2.0 Innovations Leave a comment

When last week we wrote about Yahooâ€™s shares going up on rumors that Microsoft is going to increase their bid for the Internet giant it seems those rumors were not very accurate. This week Microsoft gave Yahoo a very strong signal it wonâ€™t happen.

Sources â€œclose to the companyâ€ tell the Wall Street Journal that Microsoft is standing firm on its initial offer of $31 a share (which has now declined in value, in step with Microsoftâ€™s stock price, from $44.6B to about $42B).

â€œThereâ€™s no reason to bid against ourselves,â€ one of these people said.

Microsoftâ€™s strategists believe that time is on their side, the people close to the company say. The strategists argue that Yahooâ€™s recent roadshow failed to dazzle investors and nothing in its presentations will justify a higher price, the people say. In addition, the strategists argue that the worsening economic downturn and stock-market weakness make the original bid look even more generous.

The WSJ is also saying that Microsoft wonâ€™t reveal its alternate slate of directors until it has toâ€”and that wonâ€™t be until ten days after Yahoo announces the date of its 2008 shareholders meeting, which it has yet to do.

Despite the fact those rumors were the reason behind Yahooâ€™s recent increase in their share price with 4.4% to $28.73 the companyâ€™s stock price did not fall much on todayâ€™s trade and remained close to $28 compared to the moment the rumors were broadcasted publicly.

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Yahoo shares up 4.4% on rumors Microsoft will increase the bid to $34

March 26, 2008 Web 2.0 Innovations Leave a comment

To make a long story short a Citigroup Investment Research analyst believes that rather than let the deal fall apart, Microsoft will increase its buyout offer for Yahoo. Citigroup has raised its Yahoo price target to $34 per share based on their belief that Microsoft will revise its takeover offer. The guy is named Mark Mahaney and he said â€œWe believe that a Yahoo sale to Microsoft â€” at a price higher than the initial $31 bid is the most likely outcomeâ€.

On those rumors and others Yahoo shares closed at $28.73 Tuesday, which is up 4.4%.

Mahaney also said Microsoft is yet to make significant inroads in the area of online advertising, especially against market leader Google, despite efforts to do so for the past three to four years. The only way Microsoft could compete with Google would be to acquire Yahoo, the analyst said.

It was also said Yahoo keeps on aggressively pursuing other alternatives to Microsoft’s unsolicited takeover bid, although there are no any other competing bidders for the company at this time. Rumored possibility is Time Warner, but analysts are saying it is more likely to force Microsoft increase its bid rather than ending up in a deal with Yahoo.

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Tag Archives: buyout offer

Microsoft – Yahoo saga seems to be over!

Despite rumors Microsoft is highly unlikely to increase its bid for Yahoo

Yahoo shares up 4.4% on rumors Microsoft will increase the bid to $34

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