Microsoft makes $44.6B bid for Yahoo

[AppleInsider]

In its latest bid to challenge Google's dominance in the online search and advertising markets, Microsoft on Friday issued a hostile takeover offer for Internet staple Yahoo valued at $44.6 billion.

Under the proposed deal, Microsoft would acquire all the outstanding shares of Yahoo common stock for $31 per share, representing a 62 percent premium above the closing price on those shares on Thursday.

According to a statement issued by the Redmond, Wash.-based software giant, Yahoo shareholders could 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.

"We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," said Microsoft chief executive Steve Ballmer. "We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners."

In a letter to Yahoo's Board of Directors also published on Friday, Ballmer revealed that Microsoft approached Yahoo in late 2006 to explore ways the two firms could align to create a more effective competitor to dominate forces such as Google. The offer, which also included talk of a possible acquisition, was rebuffed.

In a written response to that offer sent last February, Yahoo's Board is said to have expressed confidence in a turnaround strategy and a significant organizational realignment, arguing that it was the wrong time for its shareholders to enter into discussions regarding an acquisition transaction.

"A year has gone by, and the competitive situation has not improved," Ballmer wrote in his latest letter.

"Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition," he added. "Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers."

[ View this article at AppleInsider.com ]

[mdotdubz]

Wow, First I gotta cancel my Yahoo email account. Seond, I gotta buy some Yahoo stock real quick!

[e1618978]

Originally Posted by mdotdubz

Wow, First I gotta cancel my Yahoo email account. Seond, I gotta buy some Yahoo stock real quick!

too late - it shot up 60% already.

[mdotdubz]

yeah, I missed the boat :0( ... It'll probably be all over the place and end a bit lower today. Msft on the other hand is actually down almost $2 (6%) premarket.... Guess the market is looking at it as another dumb aquisition by mr.softee...

[monstrosity]

This really is a very sad day.

I was always quite fond of yahoo.

Farewell old friend

[e1618978]

Another year, another company for Microsoft to run into the ground. Maybe its time to buy Google.

[Monkeyoe]

Anyone know how much money Microsoft has (Assuming the shareholders deny it)?
Because damn, 44.6 billion dollars, you could be a millionaire with that!

[StuBeck]

What companies have MS run into the ground? And why do people see this as a horrible thing?

[e1618978]

Originally Posted by StuBeck

What companies have MS run into the ground? And why do people see this as a horrible thing?

Hotmail, for one - it was the most popular internet email client before they bought it.

Looking through their history on wikipedia, they have actually bought fewer companies than I thought - but every business that they have entered (except windows and office) has been a dismal failure (including xbox, at least from a financial perspective).

[GuyInFlorida]

Originally Posted by mdotdubz

Wow, First I gotta cancel my Yahoo email account. Seond, I gotta buy some Yahoo stock real quick!

Not buying the stock... but I don't trust M$. I think it is time to get a dotMac account.

[monstrosity]

Originally Posted by StuBeck

What companies have MS run into the ground? And why do people see this as a horrible thing?

Microsoft are like the anti-Midas, things turn to poop instead.

[fuyutsuki]

How deliciously evil. Good job I didn't get too used to Flickr I guess.

[BuzDots]

Baldmer

http://www.ntk.net/media/dancemonkeyboy.mpg

[ascii]

Yahoo has the oldest and best email, and easiest to use small business hosting IMO. Or should I say *did* have.

[BYODKjiM]

"Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition," he added.

Balmer doesn't see the irony in that statement, or does he just have a mental disorder?

[always13]

If yahoo is bought out by Microsoft, though i'd think the government would have issues with this... it's only a matter of time before they make Flickr a mess, just as they've made Hotmail into crap... grrr

[e1618978]

Another reason that this will fail is that windows is the OS for losers, and most competent tech people hate Microsoft. I'm sure that Yahoo will have an exodus of their best and brightest if this happens, including a lot of BSD folks.

[JeffDM]

Originally Posted by GuyInFlorida

Not buying the stock... but I don't trust M$. I think it is time to get a dotMac account.

For what? There are other alternatives for email, photo sharing, search and so on.

[mdotdubz]

Originally Posted by always13

If yahoo is bought out by Microsoft, though i'd think the government would have issues with this... it's only a matter of time before they make Flickr a mess, just as they've made Hotmail into crap... grrr

baldmer, lol.... That guy just looks evil! He always looks like he's scheming some kind of evil takeover plot...

[VinitaBoy]

So NOW Microsloth is concerned about "a credible alternative" in the software market?! Damn, but they didn't seem so "concerned" when they were 99.9% of the OS market! Fscking hypocrites.

[oilerch50]

I like yahoo classic mail more than gmail. I have both. I also enjoy the interface with yahoo news and the new yahoo search. I have both toolbars on my IE browser at work. I will let this play out. I will probably cancel yahoo---I do have this visceral and often irrational hatred for MS.

When SJ eventially retires-hopefully, several years from now, I would like Google to then buy Apple. Apple and Google seem to have all of the creative juice these days.

[TednDi]

We are the Borg. Lower your shields and surrender your ships. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service us. Resistance is futile.

[iPhone91]

So, when is Steve Ballmer going to stop hiding in the shadows and finally don the Darth Vader mask. It is his destiny...

[Flounder]

OK, so they've made a hostile bid. What are the chances of Microsoft succeeding in its acquisition attempts? This isn't a subject I know much (or anything) about?

Can anyone fill in some of the gaps?

[backtomac]

Originally Posted by Flounder

OK, so they've made a hostile bid. What are the chances of Microsoft succeeding in its acquisition attempts? This isn't a subject I know much (or anything) about?

Can anyone fill in some of the gaps?

FWIW, here is one person's view on the subject.

Like you I wonder how this will turn out and if (how?) this affects Apple's relationship with Google.

[Restalot]

Microsoft + Yahoo = Microhoo... I like it!

[Nicnac]

Originally Posted by always13

If yahoo is bought out by Microsoft, though i'd think the government would have issues with this... it's only a matter of time before they make Flickr a mess, just as they've made Hotmail into crap... grrr

The government? What government? Our administration is more concerned with oil and war profits. They don't give a damn about anti-trust, corporate abuse, home-loan scams, or anything else as long as they continue to get richer. Sorry to be blunt but I haven't seen anything being fixed anywhere in the world to do with monopolies. In fact last time I checked, we are going backwards with AT&T buying back the empire they lost when the government DID actually care.

[teckstud]

Originally Posted by StuBeck

What companies have MS run into the ground? And why do people see this as a horrible thing?

Haven't you noticed that this website is full of AppleFanboyzngirlz that simply refuse to discuss anything related to Microsoft in a mature discussion? They will call you a troll and curse your first borne- so watch out!

[backtomac]

Originally Posted by teckstud

Haven't you noticed that this website is full of AppleFanboyzngirlz that simply refuse to discuss anything related to Microsoft in a mature discussion? They will call you a troll and curse your first borne- so watch out!

There are some reasonable minds here. Quite a few actually.

Eventually you'll learn to block out the fanboi stuff. It happens everywhere.

[StuBeck]

Originally Posted by e1618978

Hotmail, for one - it was the most popular internet email client before they bought it.

Looking through their history on wikipedia, they have actually bought fewer companies than I thought - but every business that they have entered (except windows and office) has been a dismal failure (including xbox, at least from a financial perspective).

Hotmail still exists and a lot of people use it.

Xbox has made a profit, it isn't a dismal failure. You forgot about IE and a few others as well.

[StuBeck]

Originally Posted by teckstud

Haven't you noticed that this website is full of AppleFanboyzngirlz that simply refuse to discuss anything related to Microsoft in a mature discussion? They will call you a troll and curse your first borne- so watch out!

No, I know this. I'm just responding to their message with logic and seeing what they respond with.

[MacTel]

Originally Posted by e1618978

Another year, another company for Microsoft to run into the ground. Maybe its time to buy Google.

Yeah, no doubt. There goes their savings account. It will take a few quarters for M$ to save that amount again.

[Ronbo]

Originally Posted by teckstud

Haven't you noticed that this website is full of AppleFanboyzngirlz that simply refuse to discuss anything related to Microsoft in a mature discussion? They will call you a troll and curse your first borne- so watch out!

Yeah. And thank God you were here to elevate the intellectual tone of the discussion with a little name calling.

[bluedalmatian]

Originally Posted by StuBeck

Hotmail still exists and a lot of people use it.
.

Only spammers LMAO

[Dave Marsh]

Troll alert! Troll alert!

I think it's funny when people come to Apple enthusiast sites then complain that the people are all Apple enthusiasts!

Microsoft was a great partner of Apple in the early '80s following the introduction of the Macintosh, introducing Excel and Word into a world dominated by Lotus 123 and Word Perfect/Word Star. All was fine until Microsoft developed a graphical interface for DOS by blatantly copying the Mac's interface, tweaking here and there to legally get away with it. That soured a log of Mac customers on Microsoft, which continues to this day.

Since then, Microsoft has used its monopoly power to acquire other companies to enhance its portfolio, but has seldom improved upon the quality of its acquisitions, leaving observers to wonder exactly what Microsoft was good at, besides making money. If that's all that matters, they've been a great company, but some of us want value in products we purchase beyond mere functionality. That's why we stick with Apple, and why we're Mac enthusiasts.

I too wonder exactly what added value Microsoft will bring to this new acquisition. The good folks at Yahoo! started great, but have been faltering a bit, at least compared to Google. Besides a financial infusion, what will Microsoft bring to this party? We'll have to wait to see if it gets bolted on to Vista, or merely repackaged as some new Microsoft service.

[bluedalmatian]

Originally Posted by e1618978

Another reason that this will fail is that windows is the OS for losers, and most competent tech people hate Microsoft. I'm sure that Yahoo will have an exodus of their best and brightest if this happens, including a lot of BSD folks.

Interesting point. I d not thought of that. Dont Yahoo put a lot into FreeBSD - I know they host the project on thier servers, I suspect a lot of their people do development on it too. most of Yahoos servers run on FreeBSD.

[pmjoe]

Apparently one of the reasons Microsoft is interested is because Yahoo has more registered users than Google.

Hope Microsoft realizes that I'll cancel my account with Yahoo if they take over.

[pmjoe]

Originally Posted by e1618978

Looking through their history on wikipedia, they have actually bought fewer companies than I thought

Why buy a company when you can steal their ideas and sell them as your own "innovation" for free. You won't have any problem finding a history of that with Microsoft ... and they're good at it!

As others have also said, they're also good at buying companies and running them into the ground. Yahoo is toast if Microsoft gets their hands on them.

[tundraboy]

Let me get this straight. Yahoo, who is not doing too well in the search market (28% share and falling), is going to be acquired by Microsoft, who is doing even worse than Yahoo (7% share and falling), and Microsoft thinks they'll turn around things by taking the helm of the merged entity?

The mediocre and the incompetent merge and with the incompetent taking control? Oh this is going to be a lovely ride.

A quick buck for Yahoo stockholders, the shaft for MS holders.

[e1618978]

Originally Posted by StuBeck

Hotmail still exists and a lot of people use it.

Xbox has made a profit, it isn't a dismal failure. You forgot about IE and a few others as well.

One or two quarters of profits does not erase the $6 billion or so total losses to date ($9 billion including lost interest that they would have earned had they not lost the $6 billion). The xbox division was a financial mistake, and it will never make enough money to justify the sunk cost.

Originally Posted by MacTel

Yeah, no doubt. There goes their savings account. It will take a few quarters for M$ to save that amount again.

Microsoft has a net income of $16B/year, so it will actually take them three years to recover. Maybe more, because they won't be getting interest on the cash part of the yahoo buyout anymore. [edit - it looks like "levered free cash flow" is the important statistic, because that is what they get free after taxes, debt, and operating expenses are paid. The combined company will have $14 billion in levered free cash flow, so it will take 3.25 years, or 5-6 years if you count opportunity cost of the lost interest payments]

Don't get me wrong, I am happy about this move - but I am happy about it because I hate Microsoft, not because I think it will be good for them. This will beat out TimeWarner/AOL and Daimler/Chrisler for the #1 spot on the bonehead merger list.