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| 5/18 |
| 2008/2/1-7 [Computer/Companies/Google, Computer/SW/OS/Windows] UID:49047 Activity:kinda low |
2/1 MS tries to buy Yahoo
\_ GOOG 514.60 -49.70
:-)
I'm not the "short GOOG" guy, just someone who envies Google
employees.
\_ Official buyout letter from MSFT http://tinyurl.com/3ysrzu
\_ Another reason to hate The Borg.
\_ If the Borg can put GOOG in its place, more power to it.
\_ Put it this way: I increased my M$FT holdings after this move,
and don't hold any GOOG, but I am still rooting for Google.
What do you have against them?
\_ Why would you 'root for' one gigantic corporation over
another gigantic corporation. You're just eyeballs and
dollars for both. Neither 'roots for' you or people like
you.
\_ M$ software has been a disaster for the Internet and
with a few exceptions, is practically unusable. GOOG
is exactly the opposite. Why would I care that the
software I use be bug free and not cause major
world-wide security problems? Is that a serious
question? I guess you could say M$ has help keep
me in a job, cleaning up their messes...
\_ The smugness of GOOG gets me. I mean, what is so great
about GOOG? Everyone does search. I find Yahoo's search
generally better than google. Lots of people do webmail.
About the only positive things I've seen from google is
gmail imap and patent search, and both are really pretty
mediocre. And I totally hate the stupid text ads. One
reason I don't use google for search anymore is b/c
adblock plus doesn't block google's stupid text ads.
Yahoo and most other sites are smart enough to use ads
that adblock blocks.
\_ MSFT buying YHOO is a major boon for GOOG. MSFT has no
track record of being able to assimilate other companies
effectively, and all the talent will bolt from YHOO if it
happens (and guess where they'll go?) MSFT will be saddled
with multiple redundant services and internal conflicts over
how to resolve the redundancies. It'll damage two of GOOG's
competitors in one shot. -tom
\_ Are you kidding? Most of MS's good tech comes from
buyouts. With few exceptions MS has done extremely
well with their purchases. Are you trying to troll the
entire motd with statements like that?
\_ I don't think that is true: M$ has piles of cash and now
they have something to spend it on. -ausman
\_ Non sequiteur. Microsoft already has products in
every area Yahoo does; they're trying to buy eyeballs,
but when Yahoo Mail gets subsumed into Hotmail and
Flickr becomes Windows Live Photos, they'll lose the
eyeballs anyway, after taking numerous write-downs
on discontinued lines of business. MS is still
dominated by the OS and Office apps; MS's dilemma is
that they won't make any decisions which will hurt the
OS or Office, which seriously cripples their ability
to execute in the web app space, where the OS and Office
are irrelevant.
The odds of MS being able to successfully execute a
takeover of Yahoo and a shift to an ad-based web
services revenue model are miniscule; I'd guess less
than 10%. -tom
\_ I agree with most of what you said, but there is
no need for M$ to shift to an ad-based web services
revenue model across the company.
\_ The history of companies who have two competing
lines of business is not good. -tom
\_ In what why do they compete? I see apps
and web portal as complementary.
\_ The web service is better for users the more
platform-neutral it is; MS has a long
history of trying to tie everything into
their own OS and applications. What do
you think will happen when someone from the
IE team says "hey, we have this new
standards-violating feature in IE, we
need to use it in the next version of the
portal/Flickr/Mail application", and someone
from the Yahoo side says "we can't do that,
it won't work for a whole bunch of our
customers"? Right. -tom
\_ This is an interesting perception,
but you are straying from the topic of
MS moving to an ad-based web services
revenue model. Please explain why
MS would want/need to do so.
\_ Because web services are eroding
the relevance of the OS and desktop
apps. -tom
\_ Let's say this is true. Won't
M$ have to go in that direction
whether or not they acquire
Yahoo!? What's changed? Also,
one can go to web-based apps
without an ad-based model. In
fact, business customers (much of
M$'s customer base) are
probably willing to pay more
to avoid ads or external
connectivity at all.
\_ I do think MS has to go in
that direction--I just think
they're unlikely to be able
to execute. They're in a
very similar situation to
IBM in the early 80s. Would
IBM buying the #2 clone maker
(Osborne or whoever) have
saved IBM's dominance? -tom
\_ So what does the
purchase of Yahoo! have
to do with a shift to an
ad-based revenue model
if you feel M$ is going
to shift anyway? If you
feel that such a shift
is inevitable then it
makes the purchase even
more attractive, no? I
disagree that M$ will shift
to any ad-based model for
their apps, but who knows.
BTW, IBM is not exactly dead
at this time. I wish I owned
a company that needing
saving like IBM.
\_ IBM stock lost 75% of
its value starting in
1984. It took 13 years
and a complete
transformation of the
business to recover to
1984 levels. The company
is now successful but
completely different and
not particularly relevant
to the industry; certainly
not dominant the way it
was. MSFT purchasing
YHOO combines *two* of
Google's competitors into
one less efficient
entity with even less
ability to execute. -tom
\_ This is another tangent.
\_ You mean like GE?
\_ MS makes money by the bank-full. They don't need to
switch from their current model to anything. This
is a direct attack on GOOG's online ad model which
is 99% of GOOG's income. *IF* MS completely and
utterly fails, it is still going to scare the crap
out of GOOG execs, and rightly so because if it
is even partially successful GOOG is going to get
hurt badly potentially crippling the company. Just
the distraction of the possibility of losing ad-share
to MS might be enough to cause GOOG to stumble. Bad
bad bad news for GOOG and the markets reflect that. |
| 5/18 |
|
| tinyurl.com/3ysrzu -> dealbook.blogs.nytimes.com/2008/02/01/microsofts-letter-to-yahoo/ dealbook&posall=Middle1C,TopAd,Position1,Top5,SFMiddle,Box1,Bottom 3,Right5A,Right6A,Right7A,Right8A,Bottom7,Bottom8,Bottom9,Inv1,Inv2,In v3,tacoda,SOS,ADX_CLIENTSIDE&pos=Top5&query=qstring&keywords=? dealbook&posall=Middle1C,TopAd,Position1,Top5,SFMiddle,Box1,Botto m3,Right5A,Right6A,Right7A,Right8A,Bottom7,Bottom8,Bottom9,Inv1,Inv2,I nv3,tacoda,SOS,ADX_CLIENTSIDE&pos=Middle1C&query=qstring&keywords=? dealbook&posall=Middle1C,TopAd,Position1,Top5,SFMiddle,Box1,Botto m3,Right5A,Right6A,Right7A,Right8A,Bottom7,Bottom8,Bottom9,Inv1,Inv2,I nv3,tacoda,SOS,ADX_CLIENTSIDE&pos=Position1&query=qstring&keywords=? 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 09509 of a share of Microsoft common stock. 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 represents a 62% premium above the closing price of Yahoo! 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. 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! 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. 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. 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. 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! My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. 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 44 comments so far... While this may the only viable option for YHOO, once the merger integration smoke clears in 18-24 months, GOOG's search share will exceed 75%, the ensuing period of competitive confusion will give them time to reformulate strategies for Mobile and video search. Again, not sure what else YHOO could do but Eric, Sergey and Larry must be cackling with glee on this one. currently, only goolge has a real presence, and the result is that there is no competition in the market. good in the long run for publishers and and advertisers if they work togehter to offer a world wide profram like google's adwords and ad sense. and more importantly, how comfy his golden parachute is. Another example of incompetence being rewarded with MILLIONS in exit moolah. There is hope for Bernie Ebbers (after he completes his 20 years minus good behavior). Maybe some telco play that's in need of qualified, ethical leadership will ask for a sit-down in 2025. That's how much the company was over-spending in 2006 compared with Google. Combined there were almost $10 billion in redundancies at the two companies. So their redundancies relative to Google amounted to over 42% of total spending! Yahoo and MSN Search engines, together, are not even a remote match to Google's. Though Yahoo had a multi-year headstart to Google, it lacked severe innovative features and consumers have taken to Google religion. Together, they will drown in the strong currents of Google. In the current scenario the way Yahoo is s... |