Tag Archives: Microsoft

Microsoft – Yahoo saga seems to be over!

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 Microsoft has formally withdrawn their offer to buy Yahoo while the second publicly declared a victory for the Web at all.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.

“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.

“We 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,” Ballmer said.

“We 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,” said Kevin Johnson, Microsoft president for platforms and services.

On the other side here is Yahoo’s response to Microsoft

“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.”

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. 

Really more from MS/Yahoo’s saga

http://www.microsoft.com/presspass/press/2008/may08/05-03letter.mspx
http://yhoo.client.shareholder.com/press/releasedetail.cfm?ReleaseID=308131
http://webinsider.blogspot.com/2008/05/microsoft-cancelled-bid-for-yahoo-why.html
http://blog.pmarca.com/2008/05/examining-micro.html
http://www.techcrunch.com/2008/05/03/yahoos-tough-week-ahead/
http://www.techcrunch.com/2008/05/03/yahoo-responds/
http://www.techcrunch.com/2008/03/29/yahoos-new-rock-star-retention-program/
http://www.techcrunch.com/2008/05/03/breaking-microsoft-walks/
http://mashable.com/2008/05/03/breaking-microsoft-corporation-rescinds-offer-for-yahoo-inc/
http://venturebeat.com/2008/05/03/yahoo-breaks-the-wrist-microsoft-walks-away/
http://www.centernetworks.com/microsoft-yahoo-aol
https://web2innovations.com/money/2008/04/03/despite-rumors-microsoft-is-highly-unlikely-to-increase-its-bid-for-yahoo/
http://online.wsj.com/article/SB120701820580579519.html?mod=googlenews_wsj
https://web2innovations.com/money/2008/03/26/yahoo-shares-up-44-on-rumors-microsoft-will-increase-the-bid-to-34/
http://www.techcrunch.com/2008/03/25/citigroup-raises-yahoo-target-to-34-based-on-revised-microsoft-bid/
http://www.infoworld.com/article/08/03/25/Citigroup-says-Microsoft-likely-to-raise-bid-for-Yahoo_1.html
http://finance.yahoo.com/q?s=MSFT
http://finance.yahoo.com/q?s=yhoo
http://uk.reuters.com/article/technology-media-telco-SP/idUKN1819990520080219
http://news.zdnet.com/2100-9588_22-6231021.html
http://mashable.com/2008/02/18/bill-gates-were-not-raising-the-yahoo-bid/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer/
https://web2innovations.com/money/2008/02/11/yahoo%e2%80%99s-official-response-to-microsoft%e2%80%99s-offer-no/
https://web2innovations.com/money/2008/02/12/and-here-is-what-microsoft-has-to-tell-yahoo/
http://biz.yahoo.com/prnews/080211/aqm241.html
http://finance.yahoo.com/q?d=t&s=msft
http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

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

When last week we wrote about Yahoo’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 won’t happen.

Sources “close to the company” 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 Microsoft’s stock price, from $44.6B to about $42B).

“There’s no reason to bid against ourselves,” one of these people said.

Microsoft’s strategists believe that time is on their side, the people close to the company say. The strategists argue that Yahoo’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 won’t reveal its alternate slate of directors until it has to—and that won’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 Yahoo’s recent increase in their share price with 4.4% to $28.73 the company’s stock price did not fall much on today’s trade and remained close to $28 compared to the moment the rumors were broadcasted publicly.

Really more from MS/Yahoo’s saga

http://online.wsj.com/article/SB120701820580579519.html?mod=googlenews_wsj
https://web2innovations.com/money/2008/03/26/yahoo-shares-up-44-on-rumors-microsoft-will-increase-the-bid-to-34/
http://www.techcrunch.com/2008/03/25/citigroup-raises-yahoo-target-to-34-based-on-revised-microsoft-bid/
http://www.infoworld.com/article/08/03/25/Citigroup-says-Microsoft-likely-to-raise-bid-for-Yahoo_1.html
http://finance.yahoo.com/q?s=MSFT
http://finance.yahoo.com/q?s=yhoo
http://uk.reuters.com/article/technology-media-telco-SP/idUKN1819990520080219
http://news.zdnet.com/2100-9588_22-6231021.html
http://mashable.com/2008/02/18/bill-gates-were-not-raising-the-yahoo-bid/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer/
https://web2innovations.com/money/2008/02/11/yahoo%e2%80%99s-official-response-to-microsoft%e2%80%99s-offer-no/
https://web2innovations.com/money/2008/02/12/and-here-is-what-microsoft-has-to-tell-yahoo/
http://biz.yahoo.com/prnews/080211/aqm241.html
http://finance.yahoo.com/q?d=t&s=msft
http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer
 

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

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 “We believe that a Yahoo sale to Microsoft — at a price higher than the initial $31 bid is the most likely outcome”.

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.

Really more

http://www.techcrunch.com/2008/03/25/citigroup-raises-yahoo-target-to-34-based-on-revised-microsoft-bid/
http://www.infoworld.com/article/08/03/25/Citigroup-says-Microsoft-likely-to-raise-bid-for-Yahoo_1.html
http://finance.yahoo.com/q?s=MSFT
http://finance.yahoo.com/q?s=yhoo
http://uk.reuters.com/article/technology-media-telco-SP/idUKN1819990520080219
http://news.zdnet.com/2100-9588_22-6231021.html
http://mashable.com/2008/02/18/bill-gates-were-not-raising-the-yahoo-bid/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer/
https://web2innovations.com/money/2008/02/11/yahoo%e2%80%99s-official-response-to-microsoft%e2%80%99s-offer-no/
https://web2innovations.com/money/2008/02/12/and-here-is-what-microsoft-has-to-tell-yahoo/
http://biz.yahoo.com/prnews/080211/aqm241.html
http://finance.yahoo.com/q?d=t&s=msft
http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

Are Digg’s users the real reason nobody buys them?

While reading over our daily dose of web 2.0 news and stories across our favorite technology blogs, we came across a very interesting theory being discussed on a few of these blogs.

Based on what we have read, and understood, it might turn out that Digg has a track record of surrendering to the mob when things get really bad. Giving control of its users to what shows up on their home page as a story or news is perhaps what made Digg popular but ironically it plays, with the same degree, a very negative role in Digg’s attempt to sell itself out. While the rumors are spreading around Web that potential buyer of Digg might be Microsoft (although they decline that) angry digg users are taking on the site with the promise they never return to it if the Redmond’s giant gets its hands on the popular user generated news site. We have speculated a lot over the past months as to what might be the reason why such a mainstream-like popular site does not get its long-waited exit despite all of its attempts it seems what is attracting potential suitors to Digg (its massive number of users) is what might be scaring them away.

Here is an extraction, as found on Techrunch, of the comments on Digg’s page under the news that Microsoft might be the potential buyer of Digg. 

  • Don’t sell Digg Kevin! Digg this story he needs to know how we feel!
  • Why not sell digg when you don’t care about the community. Sell it and we will be happy.
  • Somehow i think if Microsoft manages to buy digg a larger revolt than 09 F9 11… will happen, at least i know what i will do
  • I would have to see how things went afterward. If Google tried to shoehorn their “style” in to Digg’s interfaces (see: Jotspot), or if Microsoft tried to turn it in to a Windows program, I would switch to Reddit. I like Digg more, but either of those scenarios would kill Digg for me.
  • If MS is in, I’m out.
  • OK guys, Kevin doesn’t give half a shit about you. He cares about what all americans care about: $500,000,000 in his pocket. Good old capitalism, eh?
  • Goodbye Digg… Its been good knowing you… too bad you were gobbled up by corporate america. I remember back in the day when you were a bastion of free speech and unfettered entertainment, but no longer. I guess I will have to revert back to the “best of” section of Craigslist. Don’t sell your soul.
  • As long as they lets us delete our accounts
  • I am new to digg.com and I really like it. If Microsoft were to buy it that would be it for me. I will remove it from my favorites and never come back.
  • Dude. If Microsoft gets its fucking hands on this site then you will definitely have one less viewer. Those fuckers taint everything they touch.
  • Is this for real come on Kevin don’t give up to digg to these huge companies. What makes digg so special and fun is that it’s independent this is not a good idea.
  • If Microsoft purchases this site, go ahead and make your last act to institute a ‘delete your account’ function.
    This is terrible news. Lets see if we can have yet another viable outlet bought up by huge conglomerates which try to feed us what we are allowed to think and censor our beliefs. I tell you what. If digg is sold, I’m not coming here anymore! Kevin please don’t let this happen. Tell us this is about more than money.

Digg’s saga continues.

More

http://blog.digg.com/?p=114
http://digg.com/tech_news/Google_Microsoft_Bidding_For_Digg
http://digg.com/
http://www.techcrunch.com/2008/03/09/digg-users-are-doing-their-best-to-kill-an-acquisition/
http://www.techcrunch.com/2007/05/01/digg-surrenders-to-mob/
http://www.techcrunch.com/2008/03/07/google-microsoft-bidding-for-digg/
https://web2innovations.com/money/2007/12/19/digg-guys-are-up-for-sale-again-quietly/
http://www.quantcast.com/digg.com
http://www.techcrunch.com/2007/12/17/for-sale-used-social-voting-site-asking-price-300-million-goes-by-the-name-of-digg/
http://www.hoovers.com/allen-&-company/–ID__51026–/free-co-factsheet.xhtml
http://www.techcrunch.com/2006/12/28/no-acquisition-for-digg-raise-series-b-round-instead/
http://www.techcrunch.com/2007/11/07/just-sell-digg-already-jay/
http://nextnetnews.blogspot.com/2006/12/why-nobody-buys-diggcom.html
http://venturebeat.com/2007/12/17/source-digg-hires-bank-hoping-to-sell-for-300-million-or-more/
http://nextnetnews.blogspot.com/2007/02/diggcom-fights-spam-scam-games.html
http://www.pronetadvertising.com/articles/latest-digg-payola-exposed.html
http://valleywag.com/tech/rumormonger/digg-close-to-a-300-million-sale-320145.php
http://valleywag.com/tech/sun-valley/whos-selling-whos-buying-at-the-allen-confab-276716.php
http://money.cnn.com/magazines/fortune/fortune_archive/2004/06/28/374371/index.htm

Digg is likely to make a nice exit soon

Digg, the user generated news site, has been pretty serious on getting itself sold for quite long time now. Just late last year they have hired Allen & Company to shop the site for what rumors claim to be anything in the $300 million range. There were literally millions of speculations around the blogosphere why Digg cannot sell so far, some of them summarized can be read over here.

Today we are reading they are about to finally make their long waited exit. Rumored bidders are, of course, Google and Microsoft, among a couple of media type of companies, no names quoted. This time however the price is being said to be way below the price tag of $300M Digg has put on its site last year – in the $200-$225 million range.

According to Quantcast, which we believe is very accurate, Digg.com is hugely popular site and is already reaching more than 25 million unique visitors per month. Just like a couple of months ago, here we again think Digg does worth more than $300M at the very current moment, with or without steady revenues, simply because of its popularity, leadership, reach and target audience. 25 Million unique visitors per month is almost a mainstream site and we have seen sites with less that traffic getting acquired in the 10 digit range.

Taking into consideration the fact that in case Microsoft does not buy the site they are likely to terminate the ad agreement they have with Digg, it seems that other bidders are not including the Microsoft revenues in Digg’s valuation.

More about Allen & Company

Investment bank Allen & Company has been involved in a number of high profile mergers and acquisitions in the past. Interesting for the Allen & Company is the privacy the investment firm seems to be working in as argument for which is the absence of even a basic site for the company on Web. Perhaps they don’t like publicity. Yet, we have found the firm’s contact details, which can be found among the other links on the end of the story’s page.

For Allen & Company, there’s no business like financing show business. The investment bank serves variously as investor, underwriter, and broker to some of the biggest names in entertainment, technology, and information. Viewed as something of a secret society, the firm has had a quiet hand in such hookups as Seagram (now part of Vivendi) and Universal Studios, Hasbro and Galoob Toys, and Disney and Capital Cities/ABC. The firm’s famous annual retreat in Sun Valley, Idaho, attracts more moguls than a double-black ski run (Warren Buffet, Bill Gates, and eBay CEO Meg Whitman have attended). Brothers Herbert and Charles Allen founded the company in 1922.

Key people and executives for Allen & Company LLC are as follows:

  • Non-Executive Chairman Donald R. (Don) Keough
  • President, CEO, and Director Herbert A. (Herb) Allen
  • Managing Director and CFO Kim M. Wieland

More

http://digg.com/
http://www.techcrunch.com/2008/03/07/google-microsoft-bidding-for-digg/
https://web2innovations.com/money/2007/12/19/digg-guys-are-up-for-sale-again-quietly/
http://www.quantcast.com/digg.com
http://www.techcrunch.com/2007/12/17/for-sale-used-social-voting-site-asking-price-300-million-goes-by-the-name-of-digg/
http://www.hoovers.com/allen-&-company/–ID__51026–/free-co-factsheet.xhtml
http://www.techcrunch.com/2006/12/28/no-acquisition-for-digg-raise-series-b-round-instead/
http://www.techcrunch.com/2007/11/07/just-sell-digg-already-jay/
http://nextnetnews.blogspot.com/2006/12/why-nobody-buys-diggcom.html
http://venturebeat.com/2007/12/17/source-digg-hires-bank-hoping-to-sell-for-300-million-or-more/
http://nextnetnews.blogspot.com/2007/02/diggcom-fights-spam-scam-games.html
http://www.pronetadvertising.com/articles/latest-digg-payola-exposed.html
http://valleywag.com/tech/rumormonger/digg-close-to-a-300-million-sale-320145.php
http://valleywag.com/tech/sun-valley/whos-selling-whos-buying-at-the-allen-confab-276716.php
http://money.cnn.com/magazines/fortune/fortune_archive/2004/06/28/374371/index.htm

Microsoft’s stock has fallen 13% since its offer for Yahoo

We have read tons of stories and points of views about the potential deal between Microsoft and Yahoo over the past weeks. We guess all people did. Everything seems already being said about the deal. Yet, something interesting popped up in the news today. It turns out that Microsoft is the big loser from the situation with Yahoo’s acquisition because it has lost 13% of its market capitalization since it has announced its bid to buy Yahoo almost a month ago.

After Microsoft’s stock has fallen 13% since its offer for Yahoo, the Microsoft’s offer price seems to have also been reduced to $29 – $41.7B as of today. Yahoo shares, by contrast, closed at $29.66 on the NASDAQ on Friday, indicating that investors’ expectations are for Microsoft to raise its bid.

While the software giant’s founder and chairman has taken a back seat to CEO Steve Ballmer in the Yahoo bid, Gates wasted no time in tempering expectations if Microsoft failed in its effort to buy Yahoo.

Chairman Bill Gates said yesterday that they are not planning to raise the bid for Yahoo and called the current offer “very fair.” Instead Bill Gates said they are having plans to invest heavily — and they said they can afford it — in anything but web search to compete against Google, with or without Yahoo. Just like what we have always been thinking — it is all about Microsoft vs. Google and Yahoo was only an instrument — Gates’s statement reconfirms it: “Google is the only company with “critical mass” in Web search.”

Yet, he admits that they’d get there faster if the great engineering work that Yahoo has done and the great engineers there were part of the common effort

“There is nothing new in terms of the process. We’ve sent our letter and we’ve reinforced that we consider that it’s a very fair offer,” said Gates, who remains the public face of Microsoft, even though he plans to switch to a part-time role at the company in June to focus on his philanthropic work.

What will happen with the stock prices of both companies if a deal does not go thru? We think both companies will get punished by the public market and have their stock prices reduced. Yahoo’s hit is expected to be stronger. 

More

http://finance.yahoo.com/q?s=MSFT
http://finance.yahoo.com/q?s=yhoo
http://uk.reuters.com/article/technology-media-telco-SP/idUKN1819990520080219
http://news.zdnet.com/2100-9588_22-6231021.html
http://mashable.com/2008/02/18/bill-gates-were-not-raising-the-yahoo-bid/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer/
https://web2innovations.com/money/2008/02/11/yahoo%e2%80%99s-official-response-to-microsoft%e2%80%99s-offer-no/
https://web2innovations.com/money/2008/02/12/and-here-is-what-microsoft-has-to-tell-yahoo/
http://biz.yahoo.com/prnews/080211/aqm241.html
http://finance.yahoo.com/q?d=t&s=msft
http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

Yahoo makes an acquisition of its own – the online video platform Maven Networks

Undeterred by the threat of a hostile takeover Microsoft imposed over them a couple of weeks ago Yahoo seems to have completed an acquisition of its own Tuesday by buying online video service Maven Networks Inc. for $160 million.

The deal marks Yahoo’s latest attempt to expand its online advertising network and more concrete its online video advertising in particular. Yahoo plans to use Maven’s technology to host video for media partners and incorporate Maven’s video-ad insertion technology into its overall advertising platform.

The talks to buy Cambridge, Mass.-based Maven began before Microsoft announced its bid Feb. 1, said Tim Cadogan, Yahoo’s senior vice president of marketing products. Maven helps television and movie studios find Web sites to show their videos and manage the accompanying advertisements. The six-year-old startup works with a wide range of media outlets, including CBS Sports, Gannett Co., News Corp., Hearst Corp. and Sony Pictures.

“We think video is going to become the third leg of the advertising stool,” said Cadogan. Ads tied to search requests is currently the Internet’s biggest moneymaker, followed by so-called display ads featuring photos, illustrations and other images.

As of December, Yahoo held a 3.4 percent share of the U.S. online video market, lagging far behind Google, whose ownership of industry leader YouTube.com gave it nearly one-third of the market, according to comScore Inc.

Yahoo plans to retain Maven’s roughly 70 employees even as it completes plans to lay off 1,000 workers in other divisions as part of a plan announced two days before Microsoft’s bid.

More about Maven Networks

Maven Networks is an online video platform provider with end-to-end video syndication, content management and advertising solution. Maven helps media companies create, distribute and profit from direct-to-consumer Internet TV channels and networks. The Maven Internet TV Platform(TM) is used by organizations such as CanWest, CBS Sports, CBC, CNET, Gannett, The Financial Times, Fox Business Network, Fox News, Hearst, MediaNews Group, Ogilvy, Scripps Networks, Sony BMG, Sony Pictures Television, and TV Guide.

The company is based in Cambridge, MA. Maven had some high-profile investors, including Accel Partners‘ Jim Breyer, who also is a board member and large investor in Facebook, Walmart Stores, Inc.  and Marvel Entertainment. Accel is known to have been investing heavly in video for almost 20 years now. The firm’s more popular participations include Macromedia, Real Networks, among others. Current investments include user-generated video-sharing site MetaCafe, peer-to-peer file-sharing service BitTorrent and Brightcove.

The Market

Video advertising is promising to be huge opportunity online and the sector is extremely competitive with new players entering every couple of weeks. Venture capitals also do think the online video advertising holds the chances to be the next big thing on Internet to bring billions of revenues in and are pouring big money into start-ups with the hope they come up to the groundbreaking technology that might shake the sector and make them the huge ROI.   

No matter what standard for video ads the sector might adopt – pre-roll ads, mid-roll ads, post-roll ads, watermark ads, viral ads or overlay ads, the undisputed leader remains Google’s YouTube with its huge number of eyeballs. That’s why the smaller players are focusing not on the reach but on different approaches and technologies to more effectively serve, track and measure these video ads. The video ads are in their infancy on Web and there is plenty of room for innovation and growth and all those small start-up companies hold their good chances for success.

Some companies, as we know them, include BlackArrow, BrightRoll, XillianTV, Podaddies, VMIX and MeeVee. BrightRoll video ad network itself has raises $5 Million while VMIX, yet another video network company has also raised a whopping amount of money $16.5M to expand its business. Other video advertising players include Revver, VideoEgg’s TheEggNetwork, ScanScout, Adap.tv, AdBrite’s InVideo platform, BroadRamp and Blinkx.

eMarketer predicts online video advertising to nearly double in 2008 to $1.3 billion and $4.3B by 2011, but no one’s really nailed a scalable ad platform for video. However, Google’s been quietly testing their own system and there are a bunch of other startups tackling it as well.

Meanwhile the Microsoft / Yahoo saga is continuing.

The common expectations of the most likely outcome from the situation are that Microsoft is going to increase its bid to as much as $35 thus effectively raising their bid to $50B.

“We think (Microsoft) will have to enhance its offer if it wants to complete a deal,” wrote Bill Miller, a respected fund manager for Legg Mason Inc., which owns more than 80 million Yahoo shares.

Like many other industry analysts, Miller predicted Yahoo ultimately will end up in Microsoft’s clutches.

“We think it will be hard for (Yahoo) to come up with alternatives that deliver more value than (Microsoft) will ultimately be willing to pay,” he wrote.

Miller also wrote that he has already met with Steve Ballmer, Microsoft’s chief executive, and spoken to Jerry Yang, Yahoo’s CEO and co-founder, to share his views.

Microsoft, on the other side, so far has indicated it’s not budging from its original offer, calling the proposal “full and fair.” Analysts believe the tense mating dance will last at least a few more weeks.

Yahoo has been discussing a search advertising partnership with the market leader, Google Inc., as a way to boost its profits and thwart Microsoft’s bid. But a deal between Google and Yahoo would face significant antitrust hurdles because it would meld the two largest search advertising networks, causing more analysts to conclude an alliance is unlikely.

On the other side it seems that News Corp. is going to enter the bidding war for Yahoo! despite some analyses from earlier this week predicting News Corp. is facing hard time to find enough money to accomplish this major deal. The current debt markets in US were to be blamed.

Today we have found on multiple news sources online that Yahoo and News Corp. are in the middle of series of discussions. The potential deal structure would spin off Fox Interactive Media (MySpace, IGN, Scout Media, Photobucket, Fox Sports, AmericanIdol.com, Flektor, Ksolo; investments in Hulu, Simply Hired and Snocap) into Yahoo, along with a big cash injection from News Corp. and an unnamed private equity fund. The total investment would be valued in the $15B range.

Yahoo would be valued at somewhere around $50 billion before the transaction, north of Microsoft’s $44.6 billion bid. That would leave News Corp., plus the private equity group, with more than 20% of the combined entity. They’d be the largest single stockholder and effectively in control of the combined Yahoo/FIM entity and their nearly 150 billion monthly page views. That amount of traffic/reach would put the combined entity on the globe’s second sport after Google and before Microsoft’s web properties.

In related news Bradley Horowitz, head of Yahoo’s Advanced Technology Division has accepted a position with Google, and have left Yahoo for good. He will be working with Joe Kraus, director of product management and head of Google’s OpenSocial initiative. Bradley joined Yahoo in May 2004 as Director of Multimedia Search, and later worked on Yahoo Desktop Search and the Yahoo Toolbar. He has also played a key role in getting the Flickr acquisition done.

More

http://www.maven.net/
http://www.maven.net/blog/
http://news.yahoo.com/s/ap/20080213/ap_on_hi_te/yahoo_acquisition_8;_ylt=AkolBf3dTEHaJIbfAWroBXbZa7gF
http://www.techcrunch.com/2008/01/31/rumor-yahoo-to-announce-large-video-acquisition-today/
http://www.techcrunch.com/2008/02/12/yahoo-confirms-maven-networks-acquisition/
http://www.techcrunch.com/2008/02/12/yahoo-exec-bails-bradley-horowitz-leaves-for-google/
http://www.techcrunch.com/2008/02/12/yahoo-and-news-corp-continue-marathon-discussions-possible-bid-to-counter-microsoft/
http://www.alleyinsider.com/2008/2/yahoo__news_corp__deal_still_in_the_works_
http://yhoo.client.shareholder.com/press/releasedetail.cfm?ReleaseID=293433
http://www.crunchbase.com/company/maven-networks
http://venturebeat.com/2008/02/12/qa-with-jim-breyer-maven-networks-online-video-opportunities-and-facebook/
http://venturebeat.com/2008/01/31/yahoo-buying-maven-networks-to-serve-online-video-ads-for-big-media/
http://www.elatable.com/blog/about/

And here is what Microsoft has to tell Yahoo!

The saga continues. Following the firm “NO” of Yahoo as of yesterday, Microsoft has put up today an official press release responding to the Yahoo!’s NO with “Reiterates Full and Fair Proposal for Microsoft-Yahoo! Combination”

REDMOND, Wash., Feb. 11 — Microsoft Corp. (Nasdaq: MSFT) today issued the following statement in response to the announcement by Yahoo! Inc. (Nasdaq: YHOO) that its Board of Directors has rejected Microsoft’s previously announced proposal to acquire Yahoo!:

It is unfortunate that Yahoo! has not embraced our full and fair proposal to combine our companies. Based on conversations with stakeholders of both companies, we are confident that moving forward promptly to consummate a transaction is in the best interests of all parties. We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market. A Microsoft-Yahoo! combination will create a more effective company that would provide greater value and service to our customers. Furthermore, the combination will create a more competitive marketplace by establishing a    compelling number two competitor for Internet search and online advertising. The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.

On February 1, 2008, Microsoft announced a proposal to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion and a 62 percent premium above the closing price of Yahoo! common stock based on the closing prices of the stocks of both companies on Jan. 31, 2008, the last day of trading prior to Microsoft’s announcement. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock.

About Microsoft

Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This material is not a substitute for the prospectus/proxy statement Microsoft Corporation would file with the SEC if an agreement between Microsoft Corporation and Yahoo! Inc. is reached or any other documents which Microsoft Corporation may file with the SEC and send to Yahoo! shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF YAHOO! INC. ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of any documents filed with the SEC by Microsoft Corporation through the web site maintained by the SEC. Free copies of any such documents can also be obtained by directing a request to Investor Relations Department, Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399.

Microsoft Corporation and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Microsoft Corporation’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended June 30, 2007, which was filed with the SEC on August 8, 2007, and its proxy statement for its 2007 annual meeting of shareholders, which was filed with the SEC on September 29, 2007. Other information regarding the participants in a proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in any proxy statement filed in connection with the proposed transaction.

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as Microsoft Corporation’s ability to achieve the synergies and value creation contemplated by the proposed transaction, Microsoft Corporation’s ability to promptly and effectively integrate the businesses of Yahoo! Inc. and Microsoft Corporation, the timing to consummate the proposed transaction and any necessary actions to obtain required regulatory approvals, and the diversion of management time on transaction-related issues. For further information regarding risks and uncertainties associated with Microsoft Corporation’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft Corporation’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft Corporation’s Investor Relations department at (800) 285-7772 or at Microsoft Corporation’s website at http://www.microsoft.com/msft.

All information in this communication is as of the date hereof. Microsoft Corporation undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

While reading over different blogs and news stories we came across an interesting view.

Some experts do not accept the fact that people think Yahoo has little to no options left but to accept Microsoft’s offer. The first group says it is not true – Yahoo is having plenty of options to pursue.

It seems like the most obvious “option” would be for Yahoo to ship great products and radically improve the experience of its customers — this is essentially the process the executive team was busy with before this unsolicited bid came on the scene.

While it may be hard for some to imagine that Yahoo would suddenly get its groove back, Apple fought back from a much worse position (remember $6/share?). For all the posturing on both sides, the real underlying question is which ownership configuration would create the most value for customers and communities on a long term run. It would be tragic for a myopic push for short-term shareholder value (and/or acquisition price) to eclipse that more fundamental discussion.
If Yahoo is “massively undervalued,” it’s because its board believes that an independent company has much more long term potential than a combined company would. Microsoft clearly disagrees, and on a financial basis, their “premium” looks impressive, but imagine the world if Microsoft had swooped in and purchased Apple when they were hurting at $6/share… Would that be a better world?

That’s the question we should all be asking — not what sale price is fair.

On the other hand other people claim that Yahoo’s execs had enough time to prove themselves. That said the similarity with Apple ends at comparison of share price. Apple grew their customer base as a result of their actions and that ultimately led to their resurgence. Even though it wasn’t long ago, it was a different time, different place, different environment, and ultimately different people.

If there is a clear monetization plan for products that bring value over what MS is offering, then the Yahoo team should bring that front and center. It sounds as though the Yahoo exec team is saying “just give us more time, and we’ll get it figured out”.

Given how long they’ve been in play, I think the confidence from shareholders in this team to execute on a plan that brings more value than a MS merger is a tough sell right now.

If one takes a look from different perspective if Yahoo! thinks for itself of being “massively undervalued” then it turns out that Yahoo thinks the market was wrong. Some are even going further by asking is Yahoo! arrogant? ‘Massively undervalued’ – Compared to what? Are they that arrogant that they claim that the ‘actual value’ of the company is ANYTHING else than the value assigned by the stock market? It is pretty ballsy to claim that a bid 30% over market value is an under valuation and could basically mean ‘Our company is worth more but we are so bad at making the value visible that no one understands it’

Some of these thoughts were shared with the public on one of the popular tech blogs and credits were to be given if the commentators were not anonymous.

More

https://web2innovations.com/money/2008/02/11/yahoo%e2%80%99s-official-response-to-microsoft%e2%80%99s-offer-no/
http://biz.yahoo.com/prnews/080211/aqm241.html
http://finance.yahoo.com/q?s=yhoo
http://finance.yahoo.com/q?d=t&s=msft
http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
https://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

Yahoo’s official response to Microsoft’s offer: NO!

After we reported the strong NO of Yahoo! to Microsoft over the weekend (Saturday) here is the official response of the Yahoo!’s board of directors.

Yahoo! Board of Directors Says Microsoft’s Proposal Substantially Undervalues Yahoo!

SUNNYVALE, Calif., Feb 11, 2008 — Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today said the Yahoo! Board of Directors has carefully reviewed Microsoft’s unsolicited proposal with Yahoo!’s management team and financial and legal advisors and has unanimously concluded that the proposal is not in the best interests of Yahoo! and our stockholders.

After careful evaluation, the Board believes that Microsoft’s proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments. The Board of Directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders.

Goldman, Sachs & Co., Lehman Brothers and Moelis & Company are acting as financial advisors to Yahoo!. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Yahoo!, and Munger Tolles & Olson LLP is acting as counsel to the outside directors of Yahoo!.

About Yahoo! Inc.

Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California. For more information, visit pressroom.yahoo.com.

Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.

Meanwhile speculations and rumors about potential major merger between Yahoo! and AOL emerged today. This appears to us to be more as incentive for Microsoft to increase its offer for Yahoo! rather than anything real behind. We see little to no synergies between Yahoo! and AOL, aside a few such as instant messaging or the combined eyeballs and the potential deal does not address the major problem of Yahoo!, which is Google.

More

http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
https://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168
http://mashable.com/2008/02/10/yahoo-aol-merger/
http://www.techcrunch.com/2008/02/10/wait-yahoo-and-aol-i-was-looking-forward-to-something-moreintelligent/
http://www.techcrunch.com/2008/02/09/microsofts-80-billion-and-growing-yahoo-headache/
https://web2innovations.com/money/2008/02/09/end-of-speculations-yahoo-rejected-microsoft%e2%80%99s-offer

End of speculations: Yahoo rejected Microsoft’s offer

Internet giant Yahoo’s board has decided to reject Microsoft’s takeover bid, saying its 44.6 billion dollar offer “massively undervalues” Yahoo, the Wall Street Journal reported earlier today.

Yahoo’s board also believes the Microsoft offer, at 31 dollars per share, does not account for risks facing Yahoo if it pursues a deal that might be ultimately blocked by government regulators.

“Yahoo’s board believes that Microsoft’s is trying to take advantage of the recent weakness in the company’s share price to ‘steal’ the company,” the board further said.

“Yahoo’s board appears to be betting that Microsoft doesn’t want to ‘go hostile’ and try to acquire the company against the wishes of management and the board,” it also said.

Reports today lacked some facts, but they are not totally off mark. A couple of days ago we were researching online for information and commentaries on the scenarios most possible for the outcome of the Microsoft/Yahoo deal and Citigroup’s Mark Mahaney has speculated with several possible roads for Yahoo to take. Aside other speculative scenarios he played with 40% (the highest) weight was given for the chance Yahoo rejecting the Microsoft’s offer with the only mission to have the offer increased with a few dollars per share, which according to him is the most likely outcome. He was right but is he also right for the reason Yahoo is today rejecting the Microsoft’s bid.

Is there any chance for Microsoft to increase its offer?

On February 1 Microsoft unveiled its 44.6 billion dollar offer to take over Yahoo, in an effort to merge the world’s biggest software company with a major Internet player to take on search and advertising juggernaut Google.

Microsoft proposed 31 dollars per share to Yahoo’s board, a 62 percent premium above its closing price the previous day.

Microsoft said a combination of the companies would lead to cost savings of a billion dollars per year.

But Yahoo chief executive Jerry Yang sent a message to employees on Wednesday, assuring them the firm’s leaders were exploring ways to avoid a Microsoft takeover.

“Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape,” Yang wrote in the email.

“What’s become clear in the past few days is how much people care about this company. I’ve heard from many of you, and from other friends and colleagues from around Silicon Valley and across the globe, that we need to do what’s best for Yahoo and our shareholders.”

Google earlier condemned Microsoft’s effort as an attack on the very independence of the Internet.

“Microsoft’s hostile bid for Yahoo raises troubling questions,” said David Drummond, Google’s senior vice president for corporate development and chief legal officer, in a statement Sunday.

“This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.”

Update: A few people asked us why the logo of Microsoft/Google appears on the story and not a combined one of Microsoft/Yahoo? Because it is all about the battle between Microsoft and Google and Yahoo! appears to be an instrument. Congrats to Yahoo! though for firmly opposing the MS’s hostile bid!

 

More

http://money.cnn.com/2008/02/09/magazines/fortune/yahoo_rejects_bid_report.fortune/?postversion=2008020914
http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html
https://web2innovations.com/money/2008/02/08/one-after-another-the-potential-competitive-bidders-for-yahoo-drop-off-is-yahoo-going-to-surrender-to-microsoft/
http://www.informationweek.com/news/showArticle.jhtml?articleID=206107168


 

One after another the potential competitive bidders for Yahoo drop off; is Yahoo going to surrender to Microsoft?

A few days ago we were trying to analyze who is going to eventually make a counter offer to match or outbid the Microsoft’s $46B offer for Yahoo!.

By that time multiple sources were reporting counter offers are in preparation by competitive bidders trying to snatch Yahoo! before Microsoft does it. We then exclude Google from the list of potential bidders for Yahoo! because some experts cited a 75 percent market share in the paid-search advertising market worldwide if Google/Yahoo deal happens and therefore Google is prevented by antitrust laws from buying Yahoo.

Another rumor was that a big private equity firm from New York is going to enter the bidding war for Yahoo!. No more news for that mystical white knight from New York has ever appeared publicly, so we put that aside. 

Another potential bidder being rumored on a few blogs was the New York-based Quadrangle Partners. Yahoo’s former president, Dan Rosensweig recently joined the firm to open the Silicon Valley office and Quadrangle also has deep media expertise. Yahoo! is after all more like a major media company with Internet nuance rather than pure technology company like, for example, Google.

Nothing happened here and we can clearly erase that bidder from the list too.

Other sources were reporting that News Corp is also frantically trying to put together a competing bid, with the help of private equity firms. This makes sense, given News Corp’s previous interest in trading MySpace for a big Yahoo equity stake. News Corp can’t afford to do the whole deal, but it could certainly provide some funding in exchange for some equity.

Nothing happened here too so we do assume News Corp has given up to fight for Yahoo! – Microsoft has simply put the price tag too high and is effectively preventing other players from offering anything even nearly close to their bid.

Today we learn that Softbank, the Japanese telecommunications and internet group, yesterday said it had no intention of selling its 41 per cent stake in Yahoo Japan after Microsoft’s bid for Yahoo. They also stated they have no intention of selling our Yahoo Japan stake. Mr. Masayoshi Son also said that Softbank, which owns 3.9 per cent of Yahoo, had no plans to take part in a counter-bid for the US company, which owns 33 per cent of Yahoo Japan.

Japan, by the way, is one of the few markets in which Yahoo remains the dominant search engine. Yahoo Japan also operates the country’s leading auction site Ebay.

Clearly Softbank is out of the game too. Anyone else? We hear and read nobody is proposing any counter bid for Yahoo!, so we have only Microsoft left in the game. A few days ago Citigroup’s Mark Mahaney has speculated with several possible roads for Yahoo to take. Aside other speculative scenarios he played with 40% (the highest) weight was given for the chance Yahoo rejecting the Microsoft’s offer with the only mission to have the offer increased with a few dollars per share, which according to him is the most likely outcome.

We have read over a few blogs that Yahoo has scheduled a special board of directors meeting on Friday, which we guess is to finally decide on what the company’s course is going to be. After a though week of dramatic events and speculations, it’s clear that no one is going to step in with a competing acquisition so we are getting nearer to witness a major deal between Microsoft and Yahoo!.  We guess we all learn more in the next few days.

Update: A few people asked us why the logo of Microsoft/Google appears on the story and not a combined one of Microsoft/Yahoo? Because it is all about the battle between Microsoft and Google and Yahoo! appears to be an instrument. Congrats to Yahoo! though for firmly opposing the MS’s hostile bid!

 

More

http://www.ft.com/cms/s/0/fffc1006-d5e8-11dc-bbb2-0000779fd2ac.html?nclick_check=1
http://blogs.barrons.com/techtraderdaily/2008/02/05/yahoo-the-five-scenario-analysis/
http://www.techcrunch.com/2008/02/08/yahoo-board-to-determine-fate-of-company-today/
https://web2innovations.com/money/2008/02/02/is-google-going-to-be-the-winner-from-the-microsoft-yahoo-deal/
https://web2innovations.com/money/2008/02/04/google%e2%80%99s-chief-legal-officer-vs-microsoft%e2%80%99s-general-counsel/
https://web2innovations.com/money/2008/02/01/yes-we-were-right-yahoo-was-seriously-undervalued-microsoft-offers-446b-for-the-company-a-62-premium-over-their-value-from-yesterday/
http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html

An acquisition within the 3-D modeling space

While everybody is waiting to see what is going to happen between Microsoft and Yahoo, the first made yet another technology acquisition – bought the 3D modeling and animation software company called Caligari to further improve its Virtual Earth. Caligari appears to be not the typical web 2.0 company one might think of at first reading – they have been established back in 1986. Terms, typically for Microsoft’s small buys, were not disclosed.

Roman Ormandy, the CEO of Caligari (he has personally very interesting story which you can ready below), stated in a post yesterday in his company’s online forum that his staff as well as the people tasked with building Virtual Earth since the start are committed to a vision ensuring a “long-term commitment to the 3D Web.”

Caligari offers a range of products for 3D enthusiasts and illustrators, researchers and design engineers. All of Caligari’s products feature an immersive real-time interface that allows users to intuitively and directly manipulate objects in a fully-rendered 3D space, thus enhancing and accelerating the overall design process.

The motivation behind this deal seems quite clear – competing with Google and its popular Google Earth/Maps developments.

Interesting fact to note is that in a similar move Google has acquired a similar company back in 2006 called SketchUp, which is also 3-D modeling software that is now used to place 3-D objects inside Google Earth.

The company is based in Mountain View, CA.

The company was founded in 1986 by Roman Ormandy. A prototype 3D video animation package for the Amiga Computer, which led to the incorporation of Octree Software in 1986. From 1988 to 1992, Octree released several software packages including Caligari1, Caligari2, Caligari Broadcast, and Caligari 24. Caligari wanted to provide inexpensive yet professional industrial video and corporate presentation software. In 1993 Octree Software moved from New York to California and became known as Caligari Corporation. In 1994 trueSpace 1.0 was introduced on the Windows platform.

Interesting videos for trueSpace can be seen on YouTube.

More about Caligari Corporation

Founded in 1986, Caligari Corporation is one of the pioneers of 3D modeling and animation. Throughout our history, Caligari has focused on providing powerful, intuitive and affordable tools that enable users to communicate visually, whether the end product is a web page, a fully-rendered image, a 3D model or an interactive simulation. Today, we continue to drive innovation to the 3D authoring process in markets that range from design and engineering to biomedicine and entertainment. The release of trueSpace7 has opened new doors in 3D by providing our users with something that no other 3D company has ever offered: real-time collaborative authoring.

Caligari offers a range of products to satisfy everyone from 3D enthusiasts to illustrators, researchers and design engineers. All of Caligari’s products feature an immersive real-time interface that allows users to intuitively and directly manipulate objects in a fully-rendered 3D space, thus enhancing and accelerating the design process.

In January of 2006, after 20 years of uninterrupted development, Caligari released the 12th generation of its flagship product, trueSpace. Not only has Caligari enhanced the award-winning modeling, surfacing and rendering capabilities of trueSpace; we have revolutionized the way 3D content is created, communicated and shared with others. trueSpace7 is the only 3D authoring product on the market to offer all aspects of real-time design, modeling and animation within a virtual 3D space shared by remote participants over the broadband internet. trueSpace7’s easy-to-use authoring tools are seamlessly integrated into the underlying collaborative process. The trueSpace7 collaboration server enables multiple participants to connect to a shared 3D space to create and manipulate shared content in real-time.

Other products include gameSpace and iSpace. gameSpace offers game artists high-end 3D authoring capabilities at a low-end price. gameSpace provides all the tools game artists need for modeling, texturing, animating, UV mapping, and more; and comes with the built-in ability to export content to multiple game engine formats.

iSpace is an innovative 3D web graphics solution that allows web developers to easily create stunning 3D web pages in HTML and Macromedia Flash format. With iSpace, web designers can import existing 2D HTML pages, convert them into 3D and enhance their layout with easy-to-use styles and graphical elements such as buttons, lights, animations and 3D text. iSpace is also a complete assembly platform, allowing the user to combine .jpg, .gif, and Flash files in the same workspace to quickly and easily create integrated HTML outputs.

The Founder

Born in 1955 in Czechoslovakia, Roman Ormandy obtained an advanced degree in Computer science from Komensky University in Bratislava in 1980. He then undertook post-graduate studies in artificial intelligence, psychology and linguistics at Charles University in Prague. In 1981, he received a research fellowship in the University’s Laboratory for Computational Linguistics.

Later that same year, Ormandy defected to Italy while on “holiday” in Yugoslavia. He spent several months in an Italian refugee camps while his wife, Bibiana, was still in Czechoslovakia. A year later Ormandy was joined in America by Bibiana and their 18-month old son, whom he had never seen, after their dramatic flight across the Yugoslavian border.

Ormandy’s first job in the United States was in a suitcase factory making cases for Apple IIC computers. He then worked in the computer lab of Lexington School for the deaf while attending the graduate program in Computer Science at City University in New York. In 1983, he landed a job programming IBM graphics software for educational applications for Classroom Consortia Media. While here, he authored two educational applications and BrainChild, a software game design for the IBM PC Jr. In 1985, Ormandy became a computer graphics consultant for Edwin Schlossberg Inc., designing interactive laser disc applications and other components of the information system for Manhattans’ World Financial Center.

Ormandy began working on the prototype for a 3D video animation package for the Amiga computer in 1985. The prototype generated intense interest following a preview of Siggraph ’86 Conference. In the fall of 1986, Ormandy incorporated Octree Software, initially working part-time to get his new company off the ground. In 1988 he switched to full-time with the introduction of Caligari, aimed at the industrial video, design and corporate presentation markets. Ormandy grew very interested in creating a more realistic user interface to optimize human physiology and inspired by the belief that creativity would be radically increased if the designer was given direct contact with 3D objects in the workspace.

Two years later, Caligari Broadcast was introduced, offering professional quality 3D animation at a fraction of the cost of comparable systems. Because of its real-time, direct manipulation of objects in real-life perspective, Caligari allowed the computer user to transcend the 2D environment and explore new creative territory of its own.

In April, 1994, Caligari further revolutionized the 3D market by introducing trueSpace 1.0 for Windows, a powerful, usable 3D modeling, rendering and animation package that combined real-time direct manipulation of objects and professional-quality output with an easy-to-learn, icon-based interface. trueSpace’s affordable price, seamlessly integrated organic modeling, photorealistic ray-tracing, broadcast-quality animation and unprecedented ease-of-creation modeling tools created a phenomenon of response in the adolescent 3D market. Its highly usable VR-style immersive interface encouraged experimentation, stimulated creativity and gave users the ability to create stunning renderings and animation easily.

Today the award-winning trueSpace legacy continues unbroken, with the latest version, trueSpace7, still based on the same principles of making professional power available to users while keeping the software easy to use and affordable. Caligari has also expanded the product range to include gameSpace, which allows users to create 3D content for games, and truePlace, an on-line meeting place for social networking, distance learning, and collaboration.

Roman Ormandy and Caligari’s introduction of trueSpace helped redefine how people can create and communicate in media. He believes one of the most far-reaching possibilities is the creation of a new form of knowledge repository based not on symbols, but living, breathing 3D objects encapsulating knowledge into code and shared in collaborative on-line environments.

More

http://www.caligari.com/
http://forums1.caligari.com/truespace/showthread.php?p=59557#post59557
http://mashable.com/2008/02/07/microsoft-acquires-caligari-3d/
http://virtualearth.spaces.live.com/blog/cns!2BBC66E99FDCDB98!11432.entry
http://www.techcrunch.com/2008/02/07/microsoft-buys-caligari-to-pimp-up-virtual-earth/
http://www.caligari.com/Gallery/Animations/2007/jan/anim/2912.wmv
http://sketchup.google.com/
http://www.engadget.com/2007/03/07/playstation-home-revealed/
http://redmondspy.blogspot.com/2008/02/microsoft-kauft-3d-experten-caligari.html
http://en.wikipedia.org/wiki/TrueSpace
http://www.youtube.com/results?search_type=search_videos&search_query=truespace&search_sort=&search_category=0&page=4
http://lunadude.com/rsrc_trueSpace.htm

Google’s Chief Legal Officer vs. Microsoft’s General Counsel

An interesting virtual war is taking place on Web right now caused by the Microsoft’s bid for Yahoo!. It appears Google cannot (or they don’t want to) enter the bidding war for Yahoo! due to many reasons; one of them seems to be the antitrust law complications that might arise from potential market dominance in the search market. Another reason could be that Google does not need Yahoo but does not want to let Microsoft own it. Yet it did not stop David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer to attack Microsoft about openness and the competition on Internet. David pointed out that the combined entity is going to have a dominant role on the IM and the email markets in US. By contrast, Microsoft has replied that deal between Microsoft and Yahoo is going to create competition since Google is the dominant player on both the search and web advertising markets. From the two statements below it becomes clear enough that it is all about Microsoft vs. Google and Yahoo is just a company to be used by Microsoft in their on going battle with Google for the leading position on Internet. Both companies seem right and not really the same time. Google barking at Microsoft about openness and compositeness is quite strange taking into consideration their unprecedented dominancy on the search and advertising market online. The same time Microsoft talking about openness, innovation, and the protection of privacy on the Internet sounds quite the same to me – unserious. Read below and decide for yourself who is right and who is wrong. 

Below is what Google said on their official blog.

The openness of the Internet is what made Google — and Yahoo! — possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It’s what makes the Internet such an exciting place.

So Microsoft’s hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets.

Could the acquisition of Yahoo! allow Microsoft — despite its legacy of serious legal and regulatory offenses — to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ email, IM, and web-based services? Policymakers around the world need to ask these questions — and consumers deserve satisfying answers.

This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first — and should come first — as the merits of this proposed acquisition are examined and alternatives explored.

Statement from Brad Smith, General Counsel, Microsoft

The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.

Today, Google is the dominant search engine and advertising company on the Web. Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65 percent search query share in the U.S. and more than 85 percent in Europe. Microsoft and Yahoo! on the other hand have roughly 30 percent combined in the U.S. and approximately 10 percent combined in Europe.

Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo! will advance these goals.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, Microsoft Corp. plans to file with the SEC a registration statement on Form S-4 containing a proxy statement/prospectus and other documents regarding the proposed transaction. The definitive proxy statement/prospectus will be mailed to shareholders of Yahoo! Inc. INVESTORS AND SECURITY HOLDERS OF YAHOO! INC. ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC by Microsoft Corp. through the Web site maintained by the SEC at sec.gov. Free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC can also be obtained by directing a request to Investor Relations Department, Microsoft Corp., One Microsoft Way, Redmond, Wash. 98052-6399.

Microsoft Corp. and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Microsoft Corp.’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended June 30, 2007, which was filed with the SEC on Aug. 8, 2007, and its proxy statement for its 2007 annual meeting of shareholders, which was filed with the SEC on Sept. 29, 2007. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

Who is David C. Drummond?

David C. Drummond is Senior Vice President, Corporate Development and Chief Legal Officer

David Drummond joined Google in 2002, initially as vice president of corporate development. Today as senior vice president and chief legal officer, he leads Google’s global teams for legal, government relations, corporate development (M&A and investment projects) and new business development (strategic partnerships and licensing opportunities).

David was first introduced to Google in 1998 as a partner in the corporate transactions group at Wilson Sonsini Goodrich and Rosati, one of the nation’s leading law firms representing technology businesses. He served as Google’s first outside counsel and worked with Larry Page and Sergey Brin to incorporate the company and secure its initial rounds of financing. During his tenure at Wilson Sonsini, David worked with a wide variety of technology companies to help them manage complex transactions such as mergers, acquisitions and initial public offerings.

David earned his bachelor’s degree in history from Santa Clara University and his JD from Stanford Law School.

Who is Brad Smith?

Brad Smith is Microsoft’s Senior Vice President, General Counsel and Corporate Secretary. He leads the company’s Department of Legal and Corporate Affairs, which is responsible for all legal work and for government, industry and community affairs activities.

Smith has played a leading role at Microsoft on intellectual property, competition law, and other Internet legal and public policy issues. He is also the company’s chief compliance officer. Since becoming general counsel in 2002, he has overseen numerous negotiations with governments and other companies, including Microsoft’s 2002 antitrust settlement with state attorneys general, its 2002 data privacy negotiations with the Federal Trade Commission and European Commission, and agreements to address antitrust or IP issues with Time Warner, Sun Microsystems, RealNetworks, IBM and Novell.

Smith is responsible for Microsoft’s intellectual property work, including all of its IP portfolio, licensing and public policy activities. He has helped spearhead the growth in the company’s patent portfolio and the launch of global campaigns to bring enforcement actions against those engaged in software piracy and counterfeiting and against viruses, spyware and other threats to Internet safety. He is also responsible for the expansion of Microsoft’s citizenship and philanthropic activities, work to revise its contracts to make them more customer-friendly, and the strengthening of legal compliance programs, issuing Standards of Business Conduct for all Microsoft employees and creating an Office of Legal Compliance.

Smith previously worked for five years as Deputy General Counsel for Worldwide Sales, and before that, he spent three years managing the company’s European Law and Corporate Affairs group, based in Paris. Before joining Microsoft, he was a partner at Covington & Burling, having worked in the firm’s Washington, D.C. and London offices and represented a number of companies in the computing industry.

Smith graduated summa cum laude from Princeton University, where he received the Class of 1901 Medal, the Dewitt Clinton Poole Memorial Prize, and the Harold Willis Dodds Achievement Award, the highest award given to a graduating senior at commencement. He was a Harlan Fiske Stone Scholar at the Columbia University School of Law, where he received the David M. Berger Memorial Award. He also studied international law and economics at the Graduate Institute of International Studies in Geneva, Switzerland.

He has written numerous articles regarding international intellectual property and electronic commerce issues, and has served as a lecturer at the Hague Academy of International Law.

More

http://googleblog.blogspot.com/2008/02/yahoo-and-future-of-internet.html
http://www.microsoft.com/presspass/press/2008/feb08/02-03Statement.mspx?rss_fdn=Press%20Releases
http://www.google.com/corporate/execs.html
http://www.microsoft.com/presspass/exec/bradsmith/default.mspx
http://www.techcrunch.com/2008/02/03/google-cries-wolf-on-microsoft-yahoo-deal-irony-comes-up-blank-in-google-search/
http://www.techcrunch.com/2008/02/03/can-google-still-claim-to-be-david-to-microsofts-goliath-no/
 

Is Google going to be the winner from the Microsoft-Yahoo deal?

Over the past a couple of days all the major media outlets are full with news, analyses, reports, commentaries and researches on the potential deal between Microsoft and Yahoo! trying to figure out the benefits or the potential pitfalls the deal would eventually face.

We’ve read a lot and we’d like here to summarize the pluses and minuses of this potential deal.

Potential pitfalls, disadvantages and overall minuses

Different cultures of the two companies – there will be the challenge of integrating two very different companies, with clashing cultures and business philosophies. At Microsoft, the operating system has always been priority number one, while Yahoo’s vision is all things Internet.

Even combined the new entity is going to have less than the half of the searches Google enjoys.

  • Google Sites: 37.1 billion (5 billion at YouTube)
  • Yahoo Sites: 8.5 billion
  • Baidu.com: 3.3 billion
  • Microsoft Sites: 2.2 billion

So the deal would do little to nothing to address the fundamental problem faced by both companies: finding a way to effectively compete with Google and its growing dominance of the Web.

The combined number of employees would be in the 90,000 range and potential layoffs can be overseen.

The reach of Microsoft and Yahoo! combined is going to be bigger than Google’s but unless the new entity figures out how to more effectively monetize its traffic they are not going to make any impact on Google’s advertising business. Google’s AdSense is still paying most to web publishers compared to other advertising networks, which tells us that Google earns more off its traffic and reach than any other ad network out there.  

Despite Microsoft’s intention to offer significant retention packages to Yahoo’s engineers, key leaders and employees across all disciplines we think Yahoo’s most talented employees will take the money from their suddenly valuable stock options and run. It is clear they aren’t going to get rich working for Microsoft, whose stock has gone up an average of 6.6 percent a year over the last five years.

If this deal happen Yahoo’s shareholders can been seen in a better position compared to Microsoft’s. They would finally get a reasonably happy ending to their long nightmare of waiting for Yahoo management to come up with a viable strategy to repel the Google assault. Other than announcing a thousand job cuts this week, Yahoo co-founder and Chief Executive Jerry Yang has given no sign that he has any better ideas for turning around the struggling company than Terry Semel, who resigned in disgrace in June 2007.

There are many questions to be addressed; some of them are included below.

  • Live search or Yahoo search?
  • Live mail or Yahoo mail?
  • Live messenger or Yahoo messenger?
  • Live spaces, Yahoo 360 or Facebook (Microsoft owns less than 2% in Facebook)?
  • MSN Dating (Match) or Yahoo personal?
  • Microsoft’s AdCenter or Yahoo’s Panama advertising platform?
  • .Net or java?
  • Live ID or Open ID?

None of the above seems to be having any synergies. Most of them are already well established brands while others are taking quite different approaches by using and relying on different technological standards. There is clearly huge dilemma if Microsoft keeps the different brands alive, it will surely confuse customers and reduce synergies. If it kills one or another, it will throw away a lot of expensively built real Web properties.

Microsoft and Yahoo would eventually waste a couple of years jumping through antitrust hoops and figuring out how to integrate their companies. During all that time Google will continue to adding more business and consumer Web services and leverage its dominance of search advertising into yet more advertising niches.

Google is already aggressively entering into the mobile space, striking deals around the globe to get prominent positioning with certain carriers and promoting an open handset design. The company is even bidding billions of dollars to buy a chunk of U.S. wireless spectrum that it could use to launch its own mobile voice and data service.

Potential synergies, advantages and overall pluses

Under no doubt the biggest advantage oversee by the Microsoft’s people is the Internet traffic/reach the combined entity is going to have – it is clearly going to be much larger than Google’s. This is what Steve Ballmer called the eyeballs and is going to be used to strengthen their advertising strategy. According to HitWise the combined traffic reach of Yahoo! and MSN web properties is going to be 15.6% of the entire Internet traffic in the U.S., compared to only 7.7% for Google’s web properties yet Google still has double the market share in search of both Yahoo and Microsoft combined.

Microsoft says it can shave at least $1 billion from operating expenses in a merged company.

The combined revenues of the two companies would be about $65B while the net profit is expected to be in the $17.5B range compared to only $4.2B for Google.

The companied company would achieve around 32% market share from the US search market.

Another advantage is that Yahoo still sports the best consumer Web portal, My Yahoo, with tens of millions of loyal users while Microsoft’s Windows operating system runs nine out of 10 desktop computers on the planet and a considerable portion of the Internet is powered by servers of the company.

In theory, Microsoft might integrate the best services from each company, from Yahoo’s Flickr photo sharing to Microsoft’s Office applications, to provide an appealing PC-and-Internet platform for customers. The technical challenges would be enormous, but the payoff could be huge.

Today Microsoft has over $300B market capitalization while Yahoo!’s has climbed close to $30B so the combined entity would potentially have a market capitalization twice bigger than Google’s, which is a little more than $175B today.

Potential competitive bidders showing up on the horizon

Aside everything else being mentioned above the acquisition deal is not for sure yet. Multiple sources are reporting counter offers are in preparation by competitive bidders trying to snatch Yahoo! before Microsoft does it. One thing is for sure we can easily exclude Google from the list of potential bidders for Yahoo!. On the conference call explaining the deal, Microsoft general counsel Brad Smith pointed out that, while other companies may make competing bids for Yahoo, one company that clearly can’t is Google. Citing a 75 percent market share in the paid-search advertising market worldwide, Ballmer asserts, “Google is prevented by antitrust laws from buying Yahoo.”

One of the rumor is that a big private equity firm from New York is going to enter the bidding war for Yahoo!.

Another potential bidder being rumored on a few blogs is the New York-based Quadrangle Partners. Yahoo’s former president, Dan Rosensweig recently joined the firm to open the Silicon Valley office and Quadrangle also has deep media expertise. Yahoo! is after all more like a major media company with Internet nuance rather than pure technology company like, for example, Google.

Other sources are reporting that News Corp is also frantically trying to put together a competing bid, with the help of private equity firms. This makes sense, given News Corp’s previous interest in trading MySpace for a big Yahoo equity stake. News Corp can’t afford to do the whole deal, but it could certainly provide some funding in exchange for some equity.

So to conclude, the minuses, obstacles and the disadvantages seem to be more than what the pluses are expected to be. So if ever a deal goes through it is not very clear what the benefits for both Microsoft and Yahoo! would be and if ever there is going to be a winner from this deal Google, ironically, might be the one at the end of the day.

You can read more over here…

More

http://www.techmeme.com/080201/p78#a080201p78
http://www.mercurynews.com/ci_8149194
http://www.businessweek.com/technology/content/feb2008/tc2008021_885192.htm?chan=rss_topStories_ssi_5
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/02/AR2008020200568.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/02/MN8OUQGNB.DTL&type=tech
http://kara.allthingsd.com/20080201/microsoft-to-yahoo-two-days-to-respond-or-else/
http://www.alleyinsider.com/2008/02/hold-everything-we-may-get-another-yhoo-bidder.html
http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/
http://www.techcrunch.com/2008/02/01/ballmers-internal-e-mail-to-the-troops-explaining-the-yahoo-acquisition/
http://www.techcrunch.com/2008/02/02/news-corp-scrambles-to-bid-for-yahoo/
http://www.alleyinsider.com/2008/02/microsoft-yahoo-combined-financials.html

Yes, we were right Yahoo was seriously undervalued; Microsoft offers $44.6B for the company, a 62% premium over their value from yesterday

When a few days ago we conducted an in-depth research on Web and ran an analysis based on the information collected we came up to the logical conclusion that Yahoo! was seriously undervalued company. Today Microsoft proved us right by offering $44.6B for Yahoo!, which represents a 62% premium on Thursday’s closing price. All major media are reporting on the deal.

In our post a few days ago we were speculating that Alibaba lost $13B from its market cap in just one month, yet the company’s market value was close to 50% from what Yahoo!’s value then was (~$26B).

Yahoo! is known to own 39% in Alibaba Group. Alibaba Group holds a 75% stake in Alibaba.com, which was worth $17.4 billion. Yahoo owns 39% of Alibaba Group, which puts the value of their share at $6.8 billion. Yahoo! has also bought around 1.2% stake in Alibaba.com by paying $100M so the direct-owned 1.2% stake was worth about $278 million. That puts the total value of Yahoo’s interest in Alibaba.com at north of $7 billion. That was then about 16.7% of Yahoo’s then $42 billion valuation.

The big question then was whether Alibaba.com is overvalued or Yahoo! is undervalued? One should take into serious consideration the fact that Yahoo! is making more than $6B in revenues per year while Alibaba.com is having, as far as we know, no more than $150M in annual revenues. A quick online research revelead that Alibaba had GAAP Revenue of around $46.3M for 2004 while the company’s revenue in the first half of 2006 was about $100 million (presumingly $200M for the entire 2006). For the first 6 months of 2007 Alibaba had revenue of RMB957.7M (~$132MM) (presuming $260M for the entire 2007). The numbers showed big difference, no? Anyway, today we are already pretty sure we were right the other day and it is obvious today that Yahoo! was seriously undervalued and was a good buy.

Microsoft Corp. made an unsolicited $44.6 billion cash and stock bid for Yahoo on Friday, a deal which could shake up the competitive and lucrative market for Internet search. The deal would pay Yahoo shareholders $31 a share, which represents a 62% premium from where Yahoo stock closed on Thursday.  Steve Ballmer, Microsoft’s chief executive, called the move the “next major milestone” for the software giant. “We are very, very confident this is the right path for Microsoft and for Yahoo,” he said. Ballmer, saying that Microsoft has been in “off and on” talks with Yahoo for 18 months, said he called Yahoo CEO Jerry Yang Thursday night to tell him about the bid.

Microsoft made the bid early Friday. In a statement, the company said the offer allows Yahoo shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the software giant’s offer consisting of one-half cash and one-half Microsoft common stock.

Shares of Yahoo (YHOO, Fortune 500) shot up nearly 60% in pre-market trading on the news, while shares of Dow component Microsoft (MSFT, Fortune 500) went down 5%. In a statement, Yahoo acknowledged receipt of the offer and said its board would evaluate the proposal “carefully and promptly.”

Michael Arrington from Techcrunch has also predicted a couple of days ago in his appearance on Fox Business that Yahoo could face a takeover by Microsoft as part of an ad play, and he was right too.

Two other events hit Yahoo over the past week on Thursday, former Yahoo Chief Terry Semel, who opposed an earlier approach made by Microsoft last year, resigned from the Yahoo’s board. In another announcement Yahoo said it would lay off 1,000 employees by mid-February. Yahoo also reported lower fourth-quarter earnings that still beat Wall Street’s now modest expectations for the firm, but it gave a 2008 revenue forecast that disappointed analysts.

Microsoft also said it projects the online advertising market to grow from over $40 billion in 2007 to nearly $80 billion by 2010 and in other news we have read advertising is the key element from the deal as proposed. Regardless Google’s recent problems and the fact they have lost 24% of its market capitalization since November 2007, the company is still leader on the online advertising market and a potential deal between Microsoft and Yahoo! would for sure strengthen their position in the battle for the online leadership with Google. The investors will no doubt be pressing the line that the combined bulk of the Yahoo! flagship website and MSN, Microsoft’s web division, will create – in terms of advertising inventory at least – a counter to Google’s dominance.  Google already controls nearly 60 percent of the U.S. search market, and has been widening its lead, despite concerted efforts by both second-place Yahoo and third-place Microsoft. By combining, Microsoft and Yahoo would have a 33 percent share of the U.S. search market, according to the latest data from comScore Media Metrix. But the idea is it eventually surge ahead of Google in terms of the eyeballs attracted to the combined web sites. The combined internet properties will have reach of at least 700M/800M people online per month but possible overlap of the real uniques can be expected.

According to comScore the current search numbers are as follows:

  • Google Sites: 37.1 billion (5 billion at YouTube)
  • Yahoo Sites: 8.5 billion
  • Baidu.com: 3.3 billion
  • Microsoft Sites: 2.2 billion

The thing is, Microsoft and Yahoo! have both known this for years and have been falling over themselves to create – or buy – their own advertising technologies that can compete with Google’s. That’s why Microsoft bought aQuantive and Yahoo! has spent furiously on the development of Panama, a rival new advertising platform aside buying a number of other advertising companies like RightMedia and BlueLithium. It’s also part of the reason it’s hard to see any synergies between Microsoft and Yahoo! with their rival proprietary technologies and bolt-on acquisitions. Doubts also abound on whether the two companies would do well together in terms of culture.

Other experts have expressed concerns that Microsoft’s audacious bid for Yahoo reveals the extent to which the Seattle giant has failed to adapt to the Internet age.

On the other side when Yahoo! was created by Jerry Yang and David Filo in 1994, Microsoft was already 21 years old and the largest software developer in the world and indeed Yang by that time was known to go against Microsoft’s technologies and clearly disliking them.

Other questions that have popped up publicly are as follows, including but not limited to.

  • Live search or Yahoo search?
  • Live mail or Yahoo mail?
  • Live messenger or Yahoo messenger?
  • Live spaces, Yahoo 360 or Facebook?
  • MSN Dating (Match) or Yahoo personal?
  • Microsoft’s AdCenter or Yahoo’s Panama advertising platform?
  • .Net or java?
  • Live ID or Open ID?
  • Anyone else?

Microsoft publicly disclosed its cash-and-stock offer in hopes of rallying support from Yahoo’s shareholders, making it more difficult for Yahoo’s board to turn down the bid.

Below is enclosed the entire email as it was sent from Microsoft’s Steven Ballmer to Yahoo’s board of directors and to Jerry Yang. It somehow made the public and appeared on multiple news sources and blogs.  

January 31, 2008

Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer

Dear Members of the Board:

I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.

Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use – EBITDA, free cash flow, operating cash flow, net income, or analyst target prices – this proposal represents a compelling value realization event for your shareholders.

We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.

Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:

Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.

We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.

Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.

In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.

Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.

We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.

Sincerely yours,

/s/ Steven A. Ballmer

Steven A. Ballmer

Chief Executive Officer

Microsoft Corporation

Big question here is will the anti trust authorities in US and the EU’s ones allow this to happen. Microsoft has previously shown, not only once, an interest in Yahoo, with reports in May 2007 saying that Microsoft had approached Yahoo about a friendly takeover, rumored to have offered $50B by that time. Some other sources go even further down to offers dated from 2006, according to the CNet article. Mediapost.com has some perspective on the deal from the point of view of ads and eyeballs. Such an acquisition, which would be Microsoft’s largest by far — it bought aQuantive last year for $6 billion — would, as we mention above, need approval by US and EU authorities. A European Commission spokesman declined to comment to Reuters. There’s also a conference call at 8:30am EST where more details will be publicly reveled.
Really more

http://www.yahoo.com/
http://finance.yahoo.com/q?s=YHOO
http://finance.yahoo.com/q?s=msft
http://www.microsoft.com/en/us/default.aspx
http://money.cnn.com/2008/02/01/technology/microsoft_yahoo/?postversion=2008020108
http://biz.yahoo.com/ap/080201/microsoft_yahoo.html?.v=22
http://www.bloomberg.com/apps/news?pid=20601103&sid=asbqLJQTL8eI&refer=us
http://www.bbc.co.uk/blogs/technology/2008/02/microsoft_and_yahoo_perfect_pa.html
http://www.techcrunch.com/2008/02/01/wow-microsoft-offers-446-billion-to-acquire-yahoo/
http://www.techcrunch.com/2008/01/30/lets-trash-yahoo-during-happy-hour/
http://afp.google.com/article/ALeqM5htQYlMQMYqZmuCMJwt514rqKceVw
http://www.techcrunch.com/2007/05/04/microsoft-pursues-yahoo-takeover/
http://uk.techcrunch.com/2008/02/01/if-microsoft-buys-yahoo-what-does-it-mean-for-europe/
http://www.mercurynews.com/localnewsheadlines/ci_8137285
http://www.foxbusiness.com/markets/article/futures-jump-microsoft2fyahoo-bid_461090_2.html
http://in.reuters.com/article/businessNews/idINIndia-31718720080201
http://www.forbes.com/markets/feeds/afx/2008/02/01/afx4602885.html
http://www.marketwatch.com/news/story/microsoft-offers-446-bln-yahoo/story.aspx?guid=035B5DA4-6DDD-44A9-95D6-2EFF58F6EB04&dist=SecMostRead
http://technology.timesonline.co.uk/tol/business/industry_sectors/technology/article3289188.ece
http://slashdot.org/article.pl?no_d2=1&sid=08/02/01/1353211
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=75612
http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSBRU00628720080201
http://online.wsj.com/article/SB120186587368234937.html?mod=yahoo_hs&ru=yahoo
http://www.bigmouthmedia.com/live/articles/semel-steps-down-from-yahoo-board-of-directors.asp/4401/
http://www.nytimes.com/2008/02/01/technology/01cnd-subyahoo.html?em&ex=1202014800&en=ce4ce395e1c80eb4&ei=5087%0A
http://www.guardian.co.uk/media/2008/jan/31/yahoo.digitalmedia
http://www.ft.com/cms/s/7b2043ba-cf68-11dc-854a-0000779fd2ac.html
http://news.zdnet.co.uk/internet/0,1000000097,39292572,00.htm
http://en.wikipedia.org/wiki/Steve_Ballmer
http://news.tigerdirect.com/2008/02/01/microsoft-proposes-acquisition-of-yahoo-for-31-per-share/
http://www.fierceiptv.com/story/microsoft-bids-45-billion-yahoo/2008-02-01?utm_medium=rss&utm_source=rss
http://blog.edge.be/uncategorized/microsoft-koopt-yahoo
http://jimstroud.com/2008/02/01/microsoft-bids-4500000000000-for-yahoo/
http://www.pixelapes.com/2008/02/01/breaking-news-microsoft-offer-to-buy-yahoo/
http://gigaom.com/2008/02/01/dear-yahoo-i-pwn-you-xo-microsoft/
http://www.burlingtonfreepress.com/apps/pbcs.dll/article?AID=/20080201/NEWS/80201015/-1/rss
http://dondodge.typepad.com/the_next_big_thing/2008/02/microsoft-propo.html
http://blogs.reuters.com/mediafile/2008/02/01/microsoft-hands-off-my-yahoo/
http://thenextweb.org/2008/02/01/microsoft-offers-446-billion-for-yahoo-why-yahoo-will-accept/
http://sandeepvenu.wordpress.com/2008/02/01/microsoft-offers-to-buy-yahoo-for-446-bln/
http://www.buzzmachine.com/2008/02/01/microsoft-yahoo-the-deal-of-the-dinos/
http://domainnamewire.com/2008/02/01/what-would-microsoft-yahoo-mean-for-domainers/
http://www.istartedsomething.com/20080202/microsoft-yahoo-big-mess-comparison/
http://blog.searchenginewatch.com/blog/080201-100256
http://www.gadgetell.com/tech/comment/microsoft-offers-to-acquire-yahoo-for-446-billion-dollars/
http://www.seobook.com/what-microsoft-acquisition-yahoo-means-webmasters-web-publishers
http://www.paidcontent.co.uk/entry/419-microsoft-makes-446-billion-cash-and-stock-bid-for-yahoo-62-percent-pre/
http://webworkerdaily.com/2008/02/01/microsoft-offers-to-buy-ailing-yahoo-for-446-billion/

Can Google lead amid its ever growing infrastructure and computation expenditures?

While reading our daily dose of news, stories and events from the web sector we came across an interesting fact worth reading and mentioning further. Google seems to be processing huge amounts of data per day in their daily routines – 20 Petabytes per day (20,000 Terabytes, 20M GBs).

The average MapReduce job is said to run across a $1 million hardware cluster, not including bandwidth fees, datacenter costs, or staffing. The January 2008 MapReduce paper provides new insights into Google’s hardware and software crunching processing tens of petabytes of data per day.

In September 2007, for example, the white paper document shows Googlers have made 2217 MapReduce jobs crunching approximately 11,000 machine years in a single month. Breaking these numbers further down shows that 11,081 machine years / (2217 job.s x 395 sec = .0278 years) implies 399,000 machines. Since this is believed to double about every 6 months one may guess Google are up to about 600,000 machines by now.

Google converted its search indexing systems to the MapReduce system in 2003, and currently processes over 20 terabytes of raw web data.

Google is known to run on hundreds of thousands of servers – by one estimate, in excess of 450,000 (data as of 2006, today more likely 600,000) – racked up in thousands of clusters in dozens of data centers around the world. It has data centers in Dublin, Ireland; in Virginia; and in California, where it just acquired the million-square-foot headquarters it had been leasing. It recently opened a new center in Atlanta, and is currently building two football-field-sized centers in The Dalles, Ore.

Microsoft, by contrast, made about a $1.5 billion capital investment in server and data structure infrastructure in 2006. Google is known to have spent at least as much to maintain its lead, following a $838 million investment in 2005. We estimate 2008’s Google IT expenditures to be in the $2B range. 

Google buys, rather than leases, computer equipment for maximum control over its infrastructure. Google chief executive officer Eric Schmidt defended that strategy once in a call conference with financial analysts. “We believe we get tremendous competitive advantage by essentially building our own infrastructures,” he said.

In general, Google has a split personality when it comes to questions about its back-end systems. To the media, its answer is, “Sorry, we don’t talk about our infrastructure.” Yet, Google engineers crack the door open wider when addressing computer science audiences, such as rooms full of graduate students whom it is interested in recruiting.

Among other things, Google has developed the capability to rapidly deploy prefabricated data centers anywhere in the world by packing them into standard 20- or 40-foot shipping containers.

Interesting fact from the Google’s history can be found back in 2003 when, in a paper, Google noted that power requirements of a densely packed server rack could range from 400 to 700 watts per square foot, yet most commercial data centers could support no more than 150 watts per square foot. In response, Google was investigating more power-efficient hardware, and reportedly switched from Intel to AMD processors for this reason. Google has not confirmed the choice of AMD, which was reported two years later by Morgan Stanley analyst Mark Edelstone.

Basically Google is mainly relying on its own internally developed software for data and network management and has a reputation for being skeptical of “not invented here” technologies, so relatively few vendors can claim it as a customer.

Google is being rumored that they would eventually start to build their own servers, storage systems, Internet switches and perhaps, sometime in the future, even optical transport systems.

Other rumors claim Google to be a big buyer of dark fiber to connect its data centers, which helps explain why the company spent nearly $3.8 billion over the past seven quarters on capital expenditures.

That’s tremendous amount of information and IT operations and based on our basic calculations, as far as we are correct in our human computation, it turns out that Google is facing IT expenditures in the $2B range per year, including for their data centers and the people.

Even though Google’s completive advantage is not only because of its infrastructure but also employees (Google has what is arguable the brightest group of people ever assembled for a publicly held company), proprietary software, global brand awareness, huge market capitalization and revenues of more than $10B per year, we think $2B burn rate per year on computing needs alone is “walking on thin ice” strategy at breakneck pace. Companies like Guill, who are claiming to have invented a technology 10 times cheaper than Google’s in terms of indexing and storing the information, Powerset working in hadoop/hbase environment, IBM, Microsoft and Yahoo! could potentially take an advantage over Google as Web grows further, so the Google’s computing expenses too.

Btw, we have also found on Web that Google processes its data on a standard machine cluster node consisting two 2 GHz Intel Xeon processors with Hyper-Threading enabled, 4 GB of memory, two 160 GB IDE hard drives and a gigabit Ethernet link.

Yahoo! and Powerset are known to use Hadoop while Microsoft’s equivalent is called Dryad. Dryad and Hadoop are the competing equivalent to Google’s GFS, MapReduce and the BigTable.

More about MapReduce

MapReduce is a programming model and an associated implementation for processing and generating large data sets. Users specify a map function that processes a key/value pair to generate a set of intermediate key/value pairs, and a reduce function that merges all intermediate values associated with the same intermediate key.

Programs written in this functional style are automatically parallelized and executed on a large cluster of commodity machines. The run-time system takes care of the details of partitioning the input data, scheduling the program’s execution across a set of machines, handling machine failures, and managing the required inter-machine communication. This allows programmers without any experience with parallel and distributed systems to easily utilize the resources of a large distributed system.

Google’s implementation of MapReduce runs on a large cluster of commodity machines and is highly scalable: a typical MapReduce computation processes many terabytes of data on thousands of machines. Programmers find the system easy to use: hundreds of MapReduce programs have been implemented and upwards of one thousand MapReduce jobs are executed on Google’s clusters every day.

More about Hadoop

Hadoop is an interesting software platform that lets one easily write and run applications that process vast amounts of data. Here’s what makes Hadoop especially useful:

Scalable: Hadoop can reliably store and process petabytes.

Economical: It distributes the data and processing across clusters of commonly available computers. These clusters can number into the thousands of nodes.

Efficient: By distributing the data, Hadoop can process it in parallel on the nodes where the data is located. This makes it extremely rapid.

Reliable: Hadoop automatically maintains multiple copies of data and automatically redeploys computing tasks based on failures.

Hadoop implements MapReduce, using the Hadoop Distributed File System (HDFS). MapReduce divides applications into many small blocks of work. HDFS creates multiple replicas of data blocks for reliability, placing them on compute nodes around the cluster. MapReduce can then process the data where it is located. Hadoop has been demonstrated on clusters with 2000 nodes. The current design target is 10,000 node clusters. Hadoop is a Lucene sub-project that contains the distributed computing platform that was formerly a part of Nutch.

More about Dryad

Dryad is an infrastructure which allows a programmer to use the resources of a computer cluster or a data center for running data parallel programs. A Dryad programmer can use thousands of machines, each of them with multiple processors or cores, without knowing anything about concurrent programming.

The Structure of Dryad Jobs
 
A Dryad programmer writes several sequential programs and connects them using one-way channels. The computation is structured as a directed graph: programs are graph vertices, while the channels are graph edges. A Dryad job is a graph generator which can synthesize any directed acyclic graph. These graphs can even change during execution, in response to important events in the computation.

Dryad is quite expressive. It completely subsumes other computation frameworks, such as Google’s map-reduce, or the relational algebra. Moreover, Dryad handles job creation and management, resource management, job monitoring and visualization, fault tolerance, re-execution, scheduling, and accounting.

More

http://doi.acm.org/10.1145/1327452.1327492
http://www.niallkennedy.com/blog/2008/01/google-mapreduce-stats.html
http://labs.google.com/papers/mapreduce.html
http://research.google.com/people/jeff/
http://research.google.com/people/sanjay/
http://research.microsoft.com/research/sv/dryad/
http://lucene.apache.org/hadoop/
http://labs.google.com/papers/gfs.html
http://labs.google.com/papers/bigtable.html
http://research.microsoft.com/research/sv/dryad/
http://www.techcrunch.com/2008/01/09/google-processing-20000-terabytes-a-day-and-growing/
http://feedblog.org/2008/01/06/mapreduce-simplified-data-processing-on-large-clusters/
http://en.wikipedia.org/wiki/MapReduce#Uses
http://open.blogs.nytimes.com/tag/hadoop/
http://www.baselinemag.com/print_article2/0,1217,a=182560,00.asp
http://www.stanford.edu/services/websearch/Google/
http://gigaom.com/2007/12/04/google-infrastructure/
http://gigaom.com/2005/09/19/google-asks-for-googlenet-bids/

Microsoft bets on enterprise search, offers to buy Fast.no for $1.2B

In what’s Microsoft’s second largest deal for the past 12 months the company offered to buy Fast Search & Transfer ASA, a leading provider of enterprise search solutions based in Norway. Details are as follows: Microsoft Corp. today announced that it will make an offer to acquire Fast Search & Transfer ASA (OSE: “FAST”), a leading provider of enterprise search solutions, through a cash tender offer for 19.00 Norwegian kroner (NOK) per share. This offer represents a 42 percent premium to the closing share price on Jan. 4, 2008 (the last trading day prior to this announcement), and values the fully diluted equity of FAST at 6.6 billion NOK (or approximately $1.2 billion U.S.).

FAST’s board of directors has unanimously recommended that its shareholders accept the offer. In addition, shareholders representing in aggregate 35 percent of the outstanding shares, including FAST’s two largest institutional shareholders, Orkla ASA and Hermes Focus Asset Management Europe, have irrevocably undertaken to accept the offer. The transaction is expected to be completed in the second quarter of calendar year 2008.

FAST has over 3500 enterprise clients, including heavyweights like Disney, The Washington Post, AutoTrader.com, and LexisNexis. According to Mary-Jo Foley from ZDNet, we should pay attention to how Microsoft will integrate FAST into their SharePoint Server. “Remember what Microsoft CEO Steve Ballmer said about SharePoint last year: He characterized SharePoint as the next big operating system from Microsoft,” she writes. “More and more, it’s looking like enterprise search functionality is one of the biggest reasons why.”

“Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people find, use and share critical business information quickly,” said Jeff Raikes, president of the Microsoft Business Division. “Until now organizations have been forced to choose between powerful, high-end search technologies or more mainstream, infrastructure solutions. The combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs.”

The companies possess a number of complementary strengths that advance a shared vision for helping businesses deliver information worker productivity and improved business results. FAST has a deep talent pool and is respected throughout the technology industry for its expertise in best-in-class, high-end search solutions. Microsoft offers worldwide customer reach and an extensive partner network, and is the recognized leader in business productivity with the popular Microsoft Office SharePoint Server, which combines search with best-in-class collaboration, business intelligence, portal and content management capabilities.

“This acquisition gives FAST an exciting way to spread our cutting-edge search technologies and innovations to more and more organizations across the world,” said John Lervik, CEO of FAST. “By joining Microsoft, we can benefit from the momentum behind the SharePoint business productivity platform to really empower a broader set of users through Microsoft’s strong sales and marketing network. It validates FAST’s momentum and leadership in enterprise search.”

In addition to bolstering Microsoft’s enterprise search efforts, this acquisition increases Microsoft’s research and development presence in Europe, complementing existing research teams in Cambridge, England, and Copenhagen, Denmark, with new and significant capabilities in Norway.

The offer will be subject to customary terms and conditions, including receipt of acceptances representing more than 90 percent of FAST shares and voting power on a fully diluted basis, and receipt of all necessary regulatory approvals on terms acceptable to Microsoft. The complete details of the offer, including all terms and conditions, will be contained in the offer document, which is expected to be sent to FAST shareholders during the week of Jan. 14, 2008. The offer will not be made in any jurisdiction in which the making of the offer would not be in compliance with the laws of such jurisdiction.

Larry Dignan, also from ZDNet, thinks this will lead the rest of the industry to consolidate the same way the advertising industry has been. “Until now organizations have been forced to choose between powerful, high-end search technologies or more mainstream, infrastructure solutions. The combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs,” said Jeff Raikes, president of Microsoft’s Business Division.

More about FAST

FAST, which was founded in 1997, creates the real-time search and business intelligence solutions that are behind the scenes at the world’s best-known companies with the most demanding information challenges. FAST’s flexible and scalable integrated technology platform and personalized portal connects users, regardless of medium, to the relevant information they need.

FAST is headquartered in Norway and is publicly traded under the ticker symbol ‘FAST’ on the Oslo Stock Exchange. The FAST Group operates globally with presence in Europe, the United States, Asia, Australia, the Americas, and the Middle East. For further information about FAST, please visit http://www.fast.no/.

FAST’s Business is Enterprise Search. Since they have set up their company in Norway back in 1997, they have grown rapidly to become a global organization with offices across six continents. FAST is said to be the forefront of search technology and it knows how to do the heavy lifting, as they claim. 
 
Execution excellence
With over 3500 installations, many at Fortune 500 and Global 2000 companies, we have an illustrious pedigree. These blue-chip companies rely on us to help them achieve their business goals and they are loyal. If you ask our customers why they remain loyal, they will probably tell you how we exceed their expectations, provide an unparalleled level of service and show a demonstrable return on their investment. In many cases we have fundamentally contributed to their success.

In 2005 independent evaluations of our support organization gave us a 98% satisfaction rating. We get tested quarterly. In 2005 we delivered more than 300 successful customer projects on schedule and within budget. We also ran over 100 Search Best Practices workshops across the world with extremely positive feedback. It helps that more than 60% of our work force are engineers and that close to 50 of our engineers have PhDs in relevant fields. They enable us to meet complex needs by delivering simplicity.

Financial strength
We are the market leader in Enterprise Search and number one in revenue growth. We have no debt. We have been profitable, exceeding our projections, for every quarter during the last 4 years. And we have made these profits while investing a quarter of our income back into R&D. Performance like this gives us the freedom to invest in innovation and win on value and financial return.

Partner power
Partners give us the ability to deliver total solutions and our FAST X 10 partner program plays a major role in our success. We have over 90 Systems Integrators and VARs on board, and over 30 OEMs embedding our search technology. We have also certified close to 1000 developers in FAST University, drawing on our best-of-breed approach to partnering. Quantity is less important than quality, of course. We only pursue a partnership if there is a mutually beneficial, lasting opportunity.

Global presence
We have been a globally minded company, with a global outlook, since our inception. Maybe it is because of our Norwegian roots. In fact, soon after we opened our doors we established an office in the United States. We now have offices in 6 continents and development centers in 4 of them. Our products support close to 80 different languages.

John M. Lervik, Ph.D., serves as the Chief Executive Officer (CEO) and is a co-founder of FAST. Dr. Lervik served as the Company’s Chief Technology Officer from 1997 to September 2001 overlooking all of the company research and product development activities. Dr. Lervik holds a Ph.D. from the Norwegian University of Science and Technology, and was awarded the best overall PhD at NTNU in 1996/97.

Other co-founders of FAST are Mr. Thomas Joseph Fussell, who was a co-founder of Fast Search & Transfer ASA and has served as Executive Chairman of the Board of Directors since June 1997 and was Managing Director in 2000 and Mr. Robert Napier Keith, co-founded Fast Search & Transfer ASA and has served as Executive Director since June 1997.

Some people think this is a brilliant acquisition for Microsoft. Gartner says that Microsoft is struggling in this (already crowded) market. FAST is recognized as an industry-leader, along with Autonomy, Endeca, ZyLab, among others. 

The other thing to keep in mind is Microsoft’s biggest bet, which is its DYNAMICS (ERP/CRM) division. Because Business Objects was acquired by SAP, Microsoft possibly became more compelled to make an acquisition. Enterprise Search is going to be an absolutely massive component of ERP in the coming years, and this is a market that is strategic for Microsoft.

Fast.no seems to have some issues with its Board of Directors. More information enclosed below.

The conduct of Fast’s directors has been the subject of much comment in Norway. In Jan 2006 a article ran in the Norwegian IT paper that claimed that one of FAST’s directors Tomas Fussel had made a 2000% markup for himself by buying a loss making company Hercules communications and selling it to the public company Fast 3 weeks later for a massive mark up.

More recently there has been controversy at the board level with one director resigning and another making public statements about other directors and major shareholders. Fast’s board member Robert Keith said in a newspaper interview, “I ought to have seen the problems in Fast earlier. And I ought to have understood that Hans Gude Gudesen is a crazy liar. Also, I ought to have shot Oystein Stray Spetalen the first time I met him. That would have helped a lot of people, says the controversial Brit to the paper [Finansavisen].” Spetalen and Hans Gude Gudesen are both major shareholders in Fast. Furthermore directors Keith and Fussel are allegedly being pursued by the Norwegian tax authorities for $50M in unpaid taxes the government says it is owed by them. In the event of non payment liability may fall on the company. I should have shot Spetalen.

The ongoing turmoil has seen 3 directors resign from the board in the last month, the latest being Johan Fredrik Odfjell who is quoted in the company’s release as saying `FAST faces many challenges and opportunities going forward’

On December the 22nd Orka FAST’s largest shareholder demanded an EGM to force Fussel and Keith off the board

Need to Restate Accounts for 2006 and 2007

On the 12th of December 2007 Oslo Bors suspended trading of FAST shares. The next morning the company announced it was reviewing the accounting utilized for the 2006 and 2007 reports with a likely outcome that this would be changed. In an article titled “Fast restates its accounts” http://www.dagensit.no stated that Fasts results for 2006 and 2007 may be restated in what it called ”another clean up round.” It also stated “The Search technology vendor Fast Search & Transfer have had several rounds with restating of accounts. Also after CFO Joseph Lacson some months ago declared that “everything is cleaned up” one has found skeletons in the closet. Wednesday afternoon trading was suspended, after what the stock exchange called “certain conditions”.

Earlier last year FAST has acquired AgentArts, a San Francisco-based technology company with a personalization and recommendation engine for music, video, games and mobile entertainment. AgentArts clients include Infospace Mobile, Telstra Big Pond, Telstra Mobile, and Unipier. FAST said will add the technology to its enterprise search products, which will allow users to see the relationships between content and get recommendations for similar content based on their search patterns. It also includes a social recommendation feature, which helps users discover similar content based on patterns of other users with similar interests.

Although Fast Search & Transfer’s core business is widely known to be enterprise search, in 2007 the company seems to have sharply turned towards online advertising and search monetization, which seems the Web’s 2007 trend anyways, everybody is trying to become an ad company, platform or network. 

Also late last year (2007) FAST, which may be a company best known for specializing in site search, has launched a product platform that is looking to socialize the ecommerce storefront search function. It’s called FAST Recommendations and it is based on offering product recommendations similar to those of Amazon.com, but with a social twist.

If some of the information above proves to be true then this is a major, and in time, exit for the FAST’s shareholders.

More

http://www.fastsearch.com/
http://www.fast.no 
http://www.microsoft.com/presspass/press/2008/jan08/01-08FastSearchPR.mspx
http://www.forbes.com/prnewswire/feeds/prnewswire/2008/01/08/prnewswire200801080443PR_NEWS_USPR_____AQTU104.html
http://www.techcrunch.com/2008/01/08/microsoft-has-announced-a-takeover-bid-for-fast-search-transfer-priced-at-12-billion/
http://mashable.com/2008/01/08/microsoft-to-acquire-fast-search-transfer/
http://www.readwriteweb.com/archives/microsoft_fast_takeover.php
http://blogs.zdnet.com/microsoft/?p=1085
http://blogs.zdnet.com/BTL/?p=7518
http://www.microsoft.com/enterprisesearch/serverproducts/searchserverexpress/default.aspx
 

Some of the web’s biggest acquisition deals during 2007

As the end of the year approaches us we would like to briefly sum up some of the web’s biggest acquisition deals for the 2007, as we know them. 

All deals will logically be ranked by their sizes and less weight will be put on the time the deal happened through out the year. Deals from all IT industry sectors are considered and put in the list, from Web and Internet to the Mobile industry as well. The size’s criterion for a deal to make the list is to be arguably no less than $100M unless the deal is symbolic in one way or another or either of the companies involved was popular enough at the time the deal took place. Otherwise we think all deals are important, at least for its founders and investors.

Under no doubt the year we will remember with the number of high-profile advertising company acquisitions for large-scale companies like DoubleClick, aQuantive, RightMedia, 24/7 Real Media, among others. Putting all acquisition deals aside, one particular funding deal deserves to be mentioned too Facebook raised $240 million from Microsoft in return of just 1.6% of its equity. The Honk Kong Billionaire Li Ka-shing later joined the club of high-caliber investors in Facebook by putting down $60M for unknown equity position.  

Other remarkable funding deals include: Alibaba.com raised $1.3 Billion from its IPO; Kayak raised $196 Million; Demand Media took $100 Million in Series C; Zillow totaled $87 Million in venture capital funding; Joost announced $45 million funding from Sequoia, Index, CBS & Viacom, among others. 

Yet another noteworthy deal is the Automattic (wordpress.org) turning down a $200 Million Acquisition Offer. 

And the 2007 Web 2.0 Money winner is… Navteq for its deal with Nokia for $8B. Apparently Microsoft has this year lost the crown of being named the deepest pocket buyer.

Nokia Buys Navteq For $8 Billion, Bets Big On Location-Based Services

Nokia (NOK), the Finnish mobile phone giant with nearly a third of the global handset market, has decided to bet big on location based services (LBS), and is buying Chicago-based digital map company NAVTEQ (NVT) for $8.1 billion. That works out to about $78 a share. This is one of Nokia’s largest purchases to date — the Finnish mobile giant has a mixed track record when it comes to acquisitions. This is also the second megabillion dollar buyout in the maps (LBS) space.

SAP Germany makes its biggest deal ever – acquires Business Objects for 4.8B EURO (around ~$6.8 billion)

SAP, the world’s largest maker of business software, has agreed to acquire Business Objects SA for €4.8 billion euros, which was around ~$6.8 billion at the time the acquisition deal was announced. The deal is amongst the largest for 2007 alongside with Oracle’s Hyperion deal for over $3.3B and the Nokia’s Navteq for over $8B. [more]

Microsoft to buy Web ad firm aQuantive for $6 Billion

Microsoft Corp. acquired aQuantive Inc. for about $6 billion, or $66.50 a share, an 85 percent premium to the online advertising company’s closing price at the time the deal was publicly announced. Shares of aQuantive shot to $63.95 in pre-opening trade, following news of the deal. The all-cash deal tops a dramatic consolidation spree across the online advertising market sparked when Google Inc. agreed to buy DoubleClick for $3.1 billion.

Oracle to buy Hyperion in $3.3 Billion cash deal

Oracle Corp. has acquired business intelligence software vendor Hyperion Solutions Corp. for $3.3 billion in cash. Oracle has agreed to pay $52 per share for Hyperion, or about $3.3 billion, a premium of 21% over Hyperion’s closing share price at the time of the deal. Oracle said it will combine Hyperion’s software with its own business intelligence (BI) and analytics tools to offer customers a broad range of performance management capabilities, including planning, budgeting and operational analytics.

Cisco Buys WebEx for $3.2 Billion

Cisco has agreed to acquire WebEx for $3.2 billion in cash. In 2006, WebEx generated nearly $50 million in profit on $380 million in revenue. They have $300 million or so in cash on hand, so the net deal value is $2.9 billion.

DoubleClick Acquired by Google For $3.1 Billion In Cash

Google reached an agreement to acquire DoubleClick, the online advertising company, from two private equity firms for $3.1 billion in cash, the companies announced, an amount that was almost double the $1.65 billion in stock that Google paid for YouTube late last year. In the last month for this year the US Federal Trade Commission has granted its approval for Google to purchase DoubleClick.

TomTom Bought Tele Atlas for $2.5 Billion

It took $2.5 Billion dollars for TomTom to buy mapping software company TeleAtlas, this will set the stage for TomTom to be big rival of Garmin across Atlantic. Tele Atlas went public in 2000 on the Frankfurt Stock Exchange, and last year, it bought another mapping firm, New Hampshire-based GDT.

Naspers acquires yet another European company – Tradus for roughly $1.8 Billion

Simply put a fallen dot com star with eBay ambitious, once worth more than 2B British pound (around $4B) and collapsed down to £62M at the end of 2000 is now being basically said rescued by the South African media company Naspers that is spending money at breakneck pace. The offered price is £946M (more than $1.8B) based on just £60M annual revenues. [more]

HP acquired Opsware For $1.6 Billion

HP has acquired IT Automation company Opsware for $1.6 billion. Whilst any acquisition of this size is interesting in itself, the back story to Opsware is even more so; Opsware was originally LoudCloud, a Web 1.0 company that took $350 million in funding during the Web 1.0 boom.

AOL acquired TradeDoubler for $900 Million

AOL has acquired Sweden-based TradeDoubler, a performance marketing company, for €695 million in cash, which was about US$900 million at the time the deal took place.

Microsoft acquired Tellme Networks for reportedly $800 Million

Microsoft Corp. has announced it will acquire Tellme Networks, Inc., a leading provider of voice services for everyday life, including nationwide directory assistance, enterprise customer service and voice-enabled mobile search. Although the price remains undisclosed, it is estimated to be upwards of $800 million.

Disney acquires Club Penguin for up to $700 Million

Club Penguin, a social network/virtual world that has been on the market for some time, was acquired by The Walt Disney Company. An earlier deal with Sony fell apart over the Club Penguin’s policy of donating a substantial portion of profits to charity. The company, which launched in October 2005, has 700,000 current paid subscribers and 12 million activated users, primarily in the U.S. and Canada.The WSJ says the purchase price is $350 million in cash. Disney could pay up to another $350 million if certain performance targets are reached over the next couple of years, until 2009.

Yahoo acquired RightMedia for $680 Million in cash and stock

Yahoo has acquired the 80% of advertising network RightMedia that it doesn’t already own for $680 million in cash and Yahoo stock. Yahoo previously bought 20% of the company in a $45 million Series B round of funding announced in October 2006. The company has raised over $50 million to date.

WPP Acquires 24/7 Real Media for $649 Million

Online advertising services firm 24/7 Real Media was acquired by the WPP group for $649 million. The old time internet advertising firm had its origins serving ads for Yahoo! and Netscape in 1994 and was formerly founded the following year as Real Media. After numerous acquisitions it took its current name and grew to have 20 offices in 12 countries, serving over 200 billion advertising impressions every month.

Google bought the web security company Postini for $625M

Google has acquired e-mail security company Postini for $625 million, a move intended to attract more large businesses to Google Apps. More than 1,000 small businesses and universities currently use Google Apps, but ‘there has been a significant amount of interest from large businesses,’ Dave Girouard, vice president and general manager of Google Enterprise, said in a Monday teleconference.

EchoStar Acquires Sling Media for $380 Million

EchoStar Communications Corporation, the parent company for DISH Network, has announced its agreement to acquire Sling Media, creator of the Sling suite, which lets you do things like control your television shows at any time, from their computers or mobile phones, or record and watch TV on your PC or Windows-based mobile phone. The acquisition is for $380 million.

ValueClick acquired comparison shopping operator MeziMedia for up to $352 Million

ValueClick has acquired MeziMedia for up to $352 million, in a deal consisting of $100 million in upfront in cash, with an additional sum of up to $252 million to be paid depending on MeziMedia’s revenue and earnings performance through to 2009.

Yahoo Acquires Zimbra For $350 Million in Cash

Yahoo has acquired the open source online/offline office suite Zimbra. The price: $350 million, in cash, confirmed. Zimbra gained wide exposure at the 2005 Web 2.0 Conference. Recently they has also launched an offline functionality.

Business.com Sells for $350 Million

Business.com has closed another chapter in its long journey from a $7.5 million domain name bought on a hope and a prayer, selling to RH Donnelley for $350 million (WSJ reporting up to $360 million). RH Donnelley beat out Dow Jones and the New York Times during the bidding.

AOL acquired online advertising company Quigo for $350 Million

AOL announced plans to buy Quigo and its services for matching ads to the content of Web pages. The acquisition follows AOL’s September purchase of Tacoda, a leader in behavioral-targeting technology, and comes as AOL tries to boost its online advertising revenue to offset declines in Internet access subscriptions.

eBay bought StubHub For $310 Million

eBay has acquired the San Francisco-based StubHub for $285 million plus the cash on StubHub’s books, which is about $25 million.

Yahoo! Agreed to acquire BlueLithium for approximately $300 Million in cash

Yahoo! Inc. has entered into a definitive agreement to acquire BlueLithium, one of the largest and fastest growing online global ad networks that offers an array of direct response products and capabilities for advertisers and publishers. Under the terms of the agreement, Yahoo! will acquire BlueLithium for approximately $300 million in cash.

CBS to buy social network Last.fm for $280 Million

CBS is known to have paid $280 million for the Last.fm site, which caters to music fans. CBS Corp bought the popular social networking website organized around musical tastes for $280 million, combining a traditional broadcast giant with an early leader in online radio. Last.fm, claims more than 15 million monthly users, including more than 4 million in the U.S.

AOL Acquired Tacoda, a behavior targeting advertising company for reportedly $275 Million

AOL has announced the acquisition of New York-based Tacoda earlier this year, a behavior targeting advertising company that was founded in 2001. The deal size, which we haven’t had confirmed, is likely far smaller than Microsoft’s $6 billion for aQuantive , Yahoo’s $680 million for RightMedia , or Google’s $3.1 billion for DoubleClick. The price might be low enough that it isn’t being disclosed at all.Jack Myers Media Business Report has confirmed the $275 million price tag

MySpace to acquire Photobucket For $250 Million

MySpace has acquired Photobucket for $250 million in cash. There is also an earn-out for up to an additional $50 million. Oddly enough MySapce has dropped Photobucket off its social networking platform. The dispute that led to the Photobucket videos being blocked on MySpace letter also led to acquisition discussions, and the block was removed. They have hired Lehman Brothers to help sell the company. They were looking for $300 million or more, but may have had few bidders other than MySpace.

Hitwise Acquired by Experian for $240M

Hitwise, the company that performs analysis of log files from 25 million worldwide ISP accounts to provide relative market share graphs for web properties, has been acquired by Experian for $240 million.

$200+ Million for Fandango

Comcast paid $200 million or perhaps a bit more. Fandango revenue is said to be in the $50m/year range, split roughly evenly between ticket sales and advertising. Wachovia Securities analyst Jeff Wlodarczak estimated the multiple-system operator paid $200 million for Fandango, whose backers include seven of the 10 largest U.S. movie exhibitors.

Intuit Acquires Homestead for $170 Million

Small business website creation service Homestead, started out in the web 1.0 era, announced tonight that it has been acquired by Intuit for $170m. In addition to Intuit’s personal and small business accounting software, and the company’s partnership with Google to integrate services like Maps listing and AdSense buys, Intuit customers will now presumably be able to put up websites quickly and easily with Homestead. [more]

Naspers Acquired Polish based IM Company Gadu Gadu (chit-chat) for reportedly $155 Million

South Africa’s biggest media group Naspers Ltd offered to buy all outstanding shares in Polish Internet firm Gadu Gadu S.A. ( GADU.WA ), a Polish IM service, for 23.50 zlotys ($8.77) per share. The current majority shareholder of Gadu Gadu has agreed to tender its 55% shareholding in the public tender offer. The price is $155M. [more] 

Studivz, a Germany Facebook clone, went for $132 Million

German Facebook clone Studivz has been sold to one of its investors, Georg von Holtzbrinck GmbH, a German publishing group, for €100 million (about $132 million). Other investors of Studivz include the Samwer brothers, founders of ringtone company Jamba (sold for €270M) and Alando (sold to eBay for €43M in 1999).

Feedburner goes to Google for $100 Million

Feedburner was acquired by Google for around $100 million. The deal is all cash and mostly upfront, according to sources, although the founders will be locked in for a couple of years.

Answers.com has purchased Dictionary.com for reportedly $100 Million

Question and answer reference site Answers.com has acquired Dictionary.com’s parent company, Lexico Publishing, for $100 million in cash. Lexico can really serve all your lexical needs because it also owns Thesaurus.com and Reference.com.

Yahoo Acquires Rivals for $100 Million

Yahoo has acquired college sports site Rivals.com, reported the Associated Press in a story earlier this year. The price is not being disclosed, although the rumor is that the deal was closed for around $100 million. Rumors of talks first surfaced in April 2007.

UGO Acquired By Hearst for reportedly $100 Million

Hearst has acquired New-York based UGO. Forbes reported the price should be around $100 million. UGO is a popular new media site that was founded in 1997 and, according to Forbes, is generating around $30 million/year in revenue. UGO media is yet another web 1.0 veteran and survivor.

Fotolog Acquired by Hi Media, French Ad Network for $90 Million
 
New York-based Fotolog been acquired by Hi Media, a Paris-based interactive media company for roughly $90 million – a combination of cash and stock, according to well-placed sources. 

Online Backup Startup Mozy Acquired By EMC For $76 Million

Online storage startup Mozy, headquartered in Utah, has been acquired by EMC Corporation, a public storage company with a nearly $40 billion market cap. EMC paid $76 million for the company, according to two sources close to the deal.

eBay Acquiring StumbleUpon for $75 Million

The startup StumbleUpon has been rumored to be in acquisition discussions since at least last November (2006). The small company had reportedly talks with Google, AOL and eBay as potential suitors. At the end of the day the start-up got acquired by eBay. The price was $75 million, which is symbolic with the fact the site had only 1.5m unique visitors per month at the time the deal took place. The company was rumored to be cash-positive.

General Atlantic Has Acquired Domain Name Pioneer Network Solutions

General Atlantic has acquired Network Solutions from Najafi Companies. Network Solutions was founded decades ago in 1973 and had a monopoly on domain name registration for years which led Verisign to pay billions to buy it. Najafi Companies purchased NS from VeriSign in November 2003 for just $100M. No financial terms were disclosed for the deal and no price tag is publicly available, although we believe it is way over $100M, but NS made our list due to its mythical role for the Internet’s development. That deal is symbolic for the Internet. 

MSNBC made its first acquisition in its 11-year history, acquired Newsvine

In a recent deal the citizen journalism startup Newsvine has been acquired by MSNBC, the Microsoft/NBC joint venture, for an undisclosed sum. Newsvine will continue operating independently, just as it has been since launching in March of 2006. The acquired company also indicated there would be little change in the features of the site.  We think the price tag for the Newsvine is anywhere in the $50/$75M range, but this is not confirmed. [more]

Google to buy Adscape for $23 Million

After some rumors of a deal earlier this year, Google has expanded its advertising reach by moving into video game advertising with their $23 million acquisition of Adscape.

Disney buys Chinese mobile content provider Enorbus for around $20 Million

Disney has bought Chinese mobile gaming company Enorbus , for around $20 million, MocoNews.net has learned. Financial backers in the company included Carlyle and Qualcomm Ventures.

BBC Worldwide Acquires Lonely Planet

BBC Worldwide, the international arm of BBC, has acquired Lonely Planet, the Australia-based travel information group. The amount of the deal was not disclosed, but Lonely Planet founders Tony and Maureen Wheeler get to keep a 25% share in the company. We truly believe this deal is in the $100M range, but since no confirmation was found on Web and therefore we cannot put a price tag for the sake of the list. Even though a global brand their site is getting just 4M unique visitors per month.

AOL Acquires ADTECH AG

AOL has acquired a controlling interest in ADTECH AG, a leading international online ad-serving company based in Frankfurt, Germany. The acquisition provides AOL with an advanced ad-serving platform that includes an array of ad management and delivery applications enabling website publishers to manage traffic and report on their online advertising campaigns. No details about the acquisition price were found on Web but we would suspect a large-scale deal and rank it very high. 

Amazon Acquires dpreview.com

Amazon have announced the acquisition of the digital camera information and review site dpreview.com. UK based dpreview.com was founded in 1998 by Phil Askey as a site that publishes “unbiased reviews and original content regarding the latest in digital cameras. Dpreview.com has in excess of 7 million unique viewers monthly. The value of the deal was not disclosed but we believe the purchase price should be in the $100M range (not confirmed).

HP Acquired Tabblo

HP announced the acquisition of Cambridge, Massachusetts based Photo printing site Tabblo this morning. The price was not disclosed.

eBay Gets Stake in Turkish Auction Market

eBay announced yesterday that it has acquired a minority stake in Turkish-based GittiGidiyor.com, an online marketplace structured in a similar manner to eBay. GittiGidiyor reportedly has more than 400,000 listings and 17 million users, which is a considerable percentage of the Turkish population. With the stake in GittiGidiyor, eBay now has the opportunity to enter the Turkish market via a system that’s already similar to theirs in functionality and purpose. Istanbul-based GittiGidiyor.com was founded in 2000. GittiGidiyor is Turkish for Going, Going, Gone. Terms of the deals were not found publicly available. Looking at the size of the Turkish site and the buying habits and history of eBay, the price should be considerably high, at least for the region.

Microsoft Acquiring ScreenTonic for Mobile Ad Platform

Microsoft is acquiring ScreenTonic, a local-based ads delivery platform for mobile devices, for an undisclosed amount. Paris-based ScreenTonic was founded in 2001, and has created the Stamp platform to deliver text or banner links on portals, text message ads and mobile web page ads, that vary depending on the recipients’ geographical location in a so called geo-targeting approach. 

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Microsoft acquires discount shopping search Jellyfish

A couple of months ago Microsoft did an interesting move. They acquired Jellyfish.com – the Internet’s first buying [search] engine, as they call themselves.  Simply put: online discount shopping website that shares their fees earned from the merchants when you buy from them through cash back program.

Typical for how the major companies buy the price of the acquisition was not disclosed nor were more business details given. Under the terms of the deal, Jellyfish.com will maintain its standalone identity and its 26 employees will remain in Wisconsin.

Jellyfish.com had raised about $6 million in funding from investors that included company executives and Kegonsa Capital Partners, based in Fitchburg, Wisconsin and Clyde Street in October 2006.

Jellyfish.com was co-founded by Chief Executive Brian Wiegand and President Mark McGuire, who previously collaborated on NameProtect, a vertical search engine that provides trademark research. Venture-backed NameProtect was acquired by Corporation Services Company in April 2007.

What is Jellyfish.com anyway?

Jellyfish is a new kind of search engine. They call it the Internet’s first buying engine. Search engines are great for finding information, but they think you also need a search engine that is perfect for when you want to buy something online.

They try to make it simple for you to find the right product from a trusted merchant. But they also do something really different too: sharing their revenue with you. The guys there think of themselves as a Robin-Hood-like search engine that takes a percentage of the revenue you generate through your buying activity and redistributes it to you.
You use Jellyfish.com just like you would any other shopping search engine to find the right product at the best price. But when you actually buy something from a store in our engine, we share at least half of what we earn by connecting you to that store. All you need to do is sign up for an account to earn cash back. There are no fees or hidden charges.

This is the Jellyfish.com’s cash back promise: to share at least half of every $1 they earn when you shop and buy products using Jellyfish.com, as of course not all merchants within their data base are allowing them to share with shoppers, but this is clearly indicated.
At Jellyfish you will never get hidden fees, secret agendas, or annoying advertising. You will get an easy to use, transparent service that puts you in control.

Like eBay in Reverse

In reality, Jellyfish.com is one big marketplace of stores competing for your attention. But instead of annoying you with advertising, we allow stores to use their advertising dollars to lower your end price. If you like pretty pictures, you can see a picture of how this works here. And no we aren’t eBay, but we think our patent-pending marketplace is like eBay in reverse. Instead of bidding for deals, all you have to do is search to uncover the stores that have already bid the most to create the best deal for you.

How can they do this? Or better yet, why they are giving away $?

They just think that advertising stinks. Instead of wasting lots of money interrupting and annoying you, they have invented a new marketplace where stores make their advertising $’s work directly for your benefit and on your terms. Current advertising gives too much value to search engines at the expense of you and the stores that pay to advertise. Instead of the search engine keeping all of the advertising, we set up a system that rewards us, you, and the advertiser fairly when you find the right product to buy online.

What they really hope to do is show you the value of your attention online. And they couldn’t think of a better way than paying you cold hard cash. Technology has given you incredible control of what you pay attention to. You may not know it yet, but you are now in control. Companies in this new world will have to provide you with a maximum return on the value of your attention or they will die. And the value of your attention at Jellyfish is measured in extra dollars in your cash back account.

At Jellyfish, they want to pioneer a new form of search advertising that they call Value Per Action. Instead of charging fees when you click, they charge their advertisers only when you actually buy, and they share at least half of this fee back to you as cash back. In other words, they connect you directly to the value of the advertising. Instead of measuring how much money they make when you click, they measure how much value the advertiser is willing to pay YOU for your sale. With VPA, the advertising value of your attention becomes transparent (you can see it in the form of cash back) and changes from annoying advertising into something that actually lowers your end price.

Jellyfish.com’s platform is a sort of reverse auction where buyers bid on reducing prices, betting on when to place an order without knowing quantity at the given price.

This type of auction is a dutch auction, first used to sell Dutch tulips.

The Microsoft Live Search team said  they “think the technology has some interesting potential applications as we continue to invest heavily in shopping and commerce as a key component of Live Search.”

Another potential reason could be Google, again.

Google understands the game of pay per click is about to change and is moving. Microsoft pays attention to is and they’re locking up intellectual property in this move -one that combines multiple, successful and innovative digital shopping models.

Jellyfish takes a best of breed approach and “mashes them up” to the amusement of consumers: Ebates + Woot.com and on the advertiser-side, eBay’s Shopping.com + Google’s AdWords auction environment + Commission Junction’s (VCLK) performance-based cost model (cost-per-action) with a twist of Google (auctioning off ads).

It all ads up to valuable IP that Google, in theory, cannot access.

According to Jellyfish’s zeitgeist, pay per click advertising “fails to align incentives properly between the consumer, the advertiser, and the search engine intermediary connecting them.” It’s certainly an interesting take on sponsored links, but it will most likely be a complicated stance to maintain after being acquired by one of the larger players in the pay per click game.

Similar, and older, companies include Shopping (eBay), Bizrate.com, Epinions and Overstock.com.

Via

[ http://www.jellyfish.com/about ]
[ http://www.techcrunch.com/2007/10/02/microsoft-acquires-discount-shopping-site-jellyfishcom/ ]
[ http://www.jeffmolander.com/ ]
[ http://www.techcrunch.com/2006/10/27/cpa-shopping-search-jellyfishcom-closes-5-million-round/ ]
[ http://www.jellyfish.com/blog ]
[ http://www.jellyfish.com/howToUseJellyfish ]
[ http://www.jellyfish.com/blog/2007/10/02/microsoft-acquires-jellyfish/ ]
[ http://blog.wired.com/business/2007/10/microsoft-acqui.html ]
[ http://www.jellyfish.com/ourVision ]
[ http://www.marketingpilgrim.com/2007/10/microsoft-acquires-jellyfish-apparently-shuns-peanutbutterfish.html ]
[ http://blogs.msdn.com/livesearch/archive/2007/10/01/microsoft-acquires-jellyfish-com.aspx ]
[ http://www.redherring.com/Home/22913 ]
[ http://www.jellyfish.com/founders ]

Microsoft Acquires WebFives, yet another multimedia sharing site

Microsoft has acquired yet another photo/video and audio sharing site called WebFives.

The agreement has been reached during November 2007 and according it Microsoft has acquired all rights to WebFives technology, patents pending, trademarks, and software to incorporate into its products and services over time. In order to make WebFives’s wind down process as easy as possible for their users, Microsoft has agreed to provide them with a license to continue operating WebFives until the end of the year, giving their users time to copy any information you would like to keep to your own PCs or another service prior to the end of the year.

WebFives has initially been founded by a former Microsoft engineer Mike Toutonghi as Vizrea, which later became WebFives. Vizrea launched in 2006 and is based in Seattle and had a handful number of employees in both locations Seattle and Prague (Czechs Republic). Originally they idea is known to have started in August of 2003 with a vision of making video, photo, music sharing, and blogging easy and accessible to everyone from any device. The company launched with the support from some early Microsoft executives. Mike Toutonghi was the engineer who initiated the Media Center version of Windows at Microsoft before leaving for the startup world.

The company realized that building a great sharing and social network means serving the community at first place. They are making it possible for anyone who creates videos, pictures, or music to easily share their creations in stunning quality to the entire world or just a small group of friends. WebFives includes advertising so they can offer you a great, free level of service for creating and sharing videos, pictures, blogs, and audio on your own personal WebFives website. Users are provided with standard social networking profile pages complete with blogging, and have the option of accessing their sites via computer or via a WAP specific page.

Some of the site’s fundaments:

1 WebFives is Quality
The video you watch and share on the web doesn’t have to be fuzzy and low quality any more. WebFives can deliver full-screen, digital-TV quality video, and CD quality audio. It’s high quality on mobile phones too.

2 WebFives is Everywhere
Easily share what you create. You and your friends can use the web browser on almost any phone to upload to WebFives, and watch WebFives video or listen to WebFives music. You can also use multimedia messages (MMS) to send movies and photos directly from your phone to WebFives. (Your web address is: webfives.com/username, your mobile address is: wap.webfives.com/username. It really is as simple as that.) Plus, for some phones we have additional, optional software.

 3 WebFives is Friendly
Already using another service? No problem, WebFives likes them all. Easily put your high quality WebFives media on other sites like MySpace, Xanga—or even on all of them at the same time. Send a video from your phone to WebFives and it’ll update for all of your friends right away.

4 WebFives is the Whole Enchilada
It’s got everything you’d expect from a sharing service—video, music, blogs, comments, ratings, tags, ‘friends,’ fast and easy search, and more—on both PCs and mobile phones.

5 WebFives is You
It’s designed from the ground up with you in mind, so it’s easy and fun to use. You can whip out great looking, custom web pages in minutes, and decide who can see them. (People who can’t see them don’t know they exist.)

Other prominent acquisitions within the sector are Photobucket by MySpace (News Corp/Fox Interactive), Flickr by Yahoo and Picasa by Google some years ago. In just recent weeks American greetings has acquired Webshots Inc, one of the leaders of Photo sharing sites. 

The deal terms and the acquisition price were not disclosed and typically for big buys (Microsoft, Google, etc.) the site stopped working and current users are given with 30 days to have their content downloaded and moved away from the site.

Via

[ http://mashable.com/2007/12/01/microsoft-acquires-photo-sharing-site-webfives/ ]
[ http://www.webfives.com/whatis.aspx ]
[ http://seattlepi.nwsource.com/business/258559_vizrea07.html ]
[ http://blogs.zdnet.com/mobile-gadgeteer/?p=723 ]
[ http://blog.seattletimes.nwsource.com/brierdudley/2007/11/microsoft_buys_toutonghis_seat_1.html ]
[ http://www.techcrunch.com/2007/11/30/microsoft-acquires-mobile-focused-social-networking-site-webfives/ ]
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