Yahoo's Reply To Microsoft's Ultimatum

The Board of Directors of Yahoo! Inc., today sent a reply to Steve Ballmer, Chief Executive Officer of Microsoft Corporation.

The response letter states "At the same time, we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders."

The letter also states : "We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction."

In short, either Microsoft pays more for a peaceful takeover, or prepares itself for a Corporate War !

Link: Yahoo!

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49 Comments

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Has anyone seriously considered that it is Live! that could well be folded into the more-recognizable Yahoo! brand (especially in terms of the IM, mail, and portal businesses)? I am a shareholder in both companies, yet Yahoo! is my default start page (I use Vista Ultimate x86 as my OS of choice), and both IM clients start when Windows does. (I don't use Not-So-Hotmail, and I primarily use Yahoo Mail as a spamcatcher. E-mail from my ISP, which happens to be Comcast? Outlook 2007.) Microsoft's attempt to acquire Yahoo could well be their recognition that the Live brand has failed (and failed miserably; "Epic Fail", in other words) and thus they are taking the traditional approach to solve the problem (buying a better-known brand).

So which brand is really in trouble?

It is hilarious to see people with just barely enough information to even have an opinion start spouting uninformed corporate predictions. Do they even teach the basics of Capitalism in schools anymore?

Seriously, people saying things like "google should buy them" and "M$ is a monopolistic company" just makes me wonder what kind of mis-educated morons this world is producing. This is an exceptionally favorable offer for any shareholder who is into the "making money" method of investing as opposed to the "throwing money away" method. The deal will be done and the board will be fired and the shareholders will all make a little money and we'll all live happily ever after. The end.

Oh, and then Yahoo will eventually be absorbed into the world of Live!

I just hope Microsoft gets hammered by antitrust cases if they do succeed with this unlawful takeover! And if even the courts give Microsoft the green like to take over Yahoo and the merger goes through, I'm switching to GMail immediately!

(XerXis said @ #20.1)
unlawful? lol :D

As Microsoft is legally considered a monopolistic company in the US, the act of buying out one of their major competitors could possibly be illegal, according to antitrust laws.

I don't know about the financial stuff, but Microsoft acquiring Yahoo would definitely have an impact in the portals / webmail / IM arenas. I don't think Microsoft would keep the Yahoo brand alive (what's the point of the acquisition then?), and that'd cause a lot of troubles. Sure, you can allow people to keep their Yahoo e-mail addresses and IM accounts, but Windows Live (or MSN) and Yahoo have drastically different styles that people wouldn't get used to easily.

Furthermore, while Yahoo might be dying in the US, around here in Taiwan at least 70 or 80 percent of Internet users have Yahoo Taiwan set as their start page (and consequently use Yahoo's services - Yahoo Mail and YIM are a lot more popular than the Windows Live equivalents here). What would Microsoft do with that? I'd imagine it's the same in quite a few other countries like Japan, etc.

I hope the two companies can settle this issue the right way without giving Yahoo's userbase too of a headache.

wctaiwan

"Now go away before I taunt you a second time!" For some reason, that just seems like the right scene to re-enact here.

ROFL This is funny! So who will actually take over Yahoo!? I'm thinking Google, if Microsoft doesn't, but that's just an unfounded guess.

im sorry but yahoo is being greedy right now. the bottom line is this: microsoft will end up owning yahoo very shortly. my only fear is they may get rid of yahoo mail / messenger and make everything msn.

(smooth3006 said @ #14)
im sorry but yahoo is being greedy right now. the bottom line is this: microsoft will end up owning yahoo very shortly. my only fear is they may get rid of yahoo mail / messenger and make everything msn. :angry:

Nope..they wont...IMO they allowed Y! & MSN messenger to interact easily...like ways they will build a bridge between there online services...and it will obviously keep the current Y! users ..

(something like this..if you visit MSN groups (automatically it will show up related available Y! groups & vice versa)

lol

If MS goes directly to the shareholders and they vote for the transaction, the Yahoo Board is going to look even more like a giant group of idiots than they already do.

-Spenser

Well, at least 1300 people on Neowin.

Plus yourself who was interested enough to comment.

Plus all Yahoo!'s shareholders and stakeholders.

Plus all Microsoft's shareholders and stakeholders.

That's quite a number.

(C_Guy said @ #12.1)
Well, at least 1300 people on Neowin.

Plus yourself who was interested enough to comment.

Plus all Yahoo!'s shareholders and stakeholders.

Plus all Microsoft's shareholders and stakeholders.

That's quite a number.

If you are a software developer or work on IT technologies related with MS, then you must be informed about this matter, a MS mistake can put another nail in the coffin of the MS products and so in your daily work, and the same for Yahoo technologies, MS can push to kill many yahoo software and services.

(ThePitt said @ #12)
who gives two ****s about this anyways?

I do. I've been an active member of Yahoo's Small Business program for 2 years. I like the way Yahoo's programs run and would have to seriously consider moving somewhere else if MS took over... depending on how all of that was affected.

Some Yahoo shareholders have sued Yahoo because they turned down what is, in their opinion, more than fair and is in essence screwing it's own shareholders.

yeah, that won't happen. i suspect that most "people" who own shares are actually other businesses who have no emotional connection to the business and just want to make profit. in any case everyone has a price and in most situations it's pretty low.
i really don't get why yahoo are doing this their shareprice has fallen since the offer. it's better now than it was at the time. they should take it and be happy, it really doesn't seem like the board is acting in the interests of the owners.

I'm sure they'd laugh their ass off after they tell MS no, and then their Yahoo stock value is halved and they sell them off just to get rid of them, and MS picks them all up at less than half of what they offered

Ballmer will make a tour with his famous "Developers, developers, developers..." performance to collect more money and will finally be able to pay the price.

Pretty sure they can pay it already....they'd go into debt sure but a good portion of it would be money they have on hand or coming in from other investments.

You bring the crowns and heads of conquered kings to my city steps. You insult my queen. You threaten my people with slavery and death! Oh, I've chosen my words carefully, Persian. Perhaps you should have done the same!

Madness...?

Lets face it, Yahoo! are history.... From a shareholder point of view I'd rather take the cash and run than to pray Yahoo!'s own stock goes up. MS have put a pretty decent bid in, I can't see why Yahoo! are fighting it.

(Navan said @ #4)
Can't wait what happens next..i hope Corporate War...lol! :P

Hopefully some sort of Mutually Assured Destruction.

(McoreD said @ #3)
Wow... this is getting so exciting. So now what's Microsoft's step to acquire Yahoo?

It is exciting and at the same time its an excellent example of how powerful Microsoft is, not necessarily a good thing! The next step they take is likely to be proposing a new Board of Directors directly to Yahoo! shareholders, that means that the shareholders will decide, and who's to say that Microsoft hasn't paid its employees or associates to actually buy Yahoo! shares in order to get a vote in on this and vote for Microsoft?!

It will be very interesting to see this unfold.

Microsoft hasn't paid its employees or associates to actually buy Yahoo! shares in order to get a vote in on this and vote for Microsoft?!

They'd have to buy an awful lot of shares to make any real difference - small minority shareholders don't get much of a say.

That's a blatant lie from the directors. Their instatement of their severance packages indicates that they are quite opposed to takeover. $31 is a really fair figure, the only reason why Yahoo is trading at anything close to that is because of this bid, and if this falls through they're probably looking at shedding over half to three-quarters of their value overnight.

(Ledward said @ #2)
if this falls through they're probably looking at shedding over half to three-quarters of their value overnight.

Thank god you're not my broker.

(AJCrowley Esq said @ #2.1)

Thank god you're not my broker.

Excuse me?

Yahoo went from just under $34.00 a share in October, 2007 to $19.00 a share on January 31, 2008. The only reason Yahoo is trading at $28.00 now is because of the Microsoft action.

Anyone who thinks that Yahoo will maintain its position in the absence of a credible takeover bit should be advising psychotics in the looney bin, not investors with an expectation of sanity. :confused:

(theyarecomingforyou said @ #1.3)
Calling someone a "n00b"... what a mature response. /Fail

are you serious? calling someone a noob is not a mature response, followed directly by slash fail? is this some kind of joke or are you really under the impression that dropping slash responses in forum posts IS a mature response?