Microsoft says "no" to Yahoo buy-out, only wants search deal

Microsoft told Yahoo today that it is not interested in a takeover of the company, and only interested in making a search engine deal with the company. The decision came from Steve Ballmer, the CEO of Microsoft.

The announcement made Yahoo's stocks plummet to $9.14 a share, from $11.57. Steve Ballmer told Yahoo that it was only interested in a search engine only deal, and would not be interested in a takeover of the company. The original offering of $33 a share to purchase Yahoo was turned down by Jerry Yang, back in early May.

The renegotiation's of Microsoft to acquire Yahoo came about after the announcement that Jerry Yang, the former CEO of Yahoo stepped down. "We are done with all acquisition discussions with Yahoo" Steve Ballmer told the press during a question and answer session at Microsoft's annual shareholders meeting.

However, after talks about not acquiring Yahoo, Microsoft offered to have a search engine only deal, where Microsoft would remove the Yahoo search engine, and replace it with its own, Live Search.

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38 Comments

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The worst thing Yahoo can do is sell now at such a deflated price. They need to ride out the storm just like every other company and grow stronger from it.

A merger with Microsoft (back then or now) would have been a disaster for Yahoo's corporate culture. In any scenario, Microsoft would have effectively gutted Yahoo. Don't blame Jerry Yang for protecting his employees.

In theory, they should suck it up. However, they won't bounce back, not in their current state.

What amuses me is that Ballmer has claimed on many occasions that Microsoft is no longer interested in taking over Yahoo starting a few months ago, yet Yahoo keeps on coming back. Yahoo doesn't seem to understand that no means no.

Microsoft gave Yahoo! a chance and they were to damn greedy. I dont blame MS one bit for not wanting to buy out Yahoo even at a cheaper price.

techbeck said,
Microsoft gave Yahoo! a chance and they were to damn greedy. I dont blame MS one bit for not wanting to buy out Yahoo even at a cheaper price.

Definitely agree. They had there chance, and Ballmer said he is done with Yahoo takeover, because they annoyed him with this dangling the chew toy above his head. Now ballmer has the power, and he is going to make Yahoo beg. Good on Microsoft.. wait till Yahoo reaches an all time low.

Yes I also agree on this. And those who are bashing Ballmer... he is one smart businessman, which is exactly why he is in the position that he is.

LordJTC said,
Yes I also agree on this. And those who are bashing Ballmer... he is one smart businessman, which is exactly why he is in the position that he is.
Yes let Ballmer be a role model. CEO's everywhere will be flinging chairs across the room and foaming from the mouth :P

Magallanes said,
Ballmer is a dick.. not just any dick but a very lucky one.

Jealous are we?

Ballmer is a very intelligent person.. Not out of defense but the truth, look how well Microsoft is growing.

afusion said,
Jealous are we?

Ballmer is a very intelligent person.. Not out of defense but the truth, look how well Microsoft is growing.


Balmer may act a little nuts sometimes, but you don't get to be as high up in Microsoft as he is by being stupid. He's not a genius like Bill Gates is, but he's no dummy.

afusion said,
Ballmer is a very intelligent person.. Not out of defense but the truth, look how well Microsoft is growing.

Ballmer is ruthless. Ruthlessness and intelligence are not mutually inclusive. He has been lucky that his ruthlessness has paid off, but in the long run it will come back to bite him and Microsoft. The wheel turns, very quickly sometimes.

I can't help but laugh at Yang...I bet he is thinking about letting everyone at Yahoo shoot him in the crotch with paintball guns. I think he let his ego get the best of him.

I have no sympathy for Yahoo!, Yang shouldn't of been allowed to step down, he should of been fired for making such a stupid (and costly) decision. What is happening to Yahoo! is because of what Yang did and they are letting the idiot still work for them? also I dunno why MS is interested in doing a search deal with a company on the virge of going under for....

Even if they go under their search engine technology won't disappear; someone will get it and I'm guessing Microsoft wants to be that someone.

I have a feeling Microsoft still wants the company, but they're now saying they don't want it and are instead hovering like vultures waiting to snap it up.

Windows Live search hasn't exactly been a huge success for them. They can't even pay people to use it, even though they have been trying to.

And, Yahoo is quite popular in some countries, afaik yahoo kick ass in Japan over Google.
Instead live search is good for nothing.

Live search has worked well for me, but search is the only area MS cares about when it comes to Yahoo. The other live services are shaping up to be quite well with the new wave 3 versions.

For someone who came to the game as late as MS did, they've got some good stuff to show for it already.

I would guess now maybe the time to purchase a few shares in Yahoo, specially if Microsoft cuts a deal with them with regards search. Share price would then go up (presumably) and people who have invested could indeed make a little cash.

PROGAME said,
how about Yahoocrosoft? :P

I was leaning toward rebranding some Yahoo and MS Products
Ya!soft Pipes!
Ya!soft Vista!
Ya!Soft Games!

I get it on Yahoo's website is would say powered by live, just like it says on AOLs but by Google, technically this take Yahoo out of the search market.

thealexweb said,
I get it on Yahoo's website is would say powered by live, just like it says on AOLs but by Google, technically this take Yahoo out of the search market.

Steve Ballmer stated that the world doesn't need "3 googles".

So if the deal is finalized, which I am sure will be, Yahoo will move one step closer to being purchased by Microsoft, at a much much lower price tag then $9/share. I would think they are waiting till Yahoo shares even out a little, probably around $3-5 a share, and acquire Yahoo.

This is all part of Microsoft's new campaign to appear a more friendly company, as trashing a company's share price in order to force them to use your own search engine is typically well received by the general public.

Honestly though, Microsoft was offering $33 per share and now won't deal at $12-15? This just shows it's still the company that used to bully OEMs and abuse it's monopoly position. Ballmer has been a disaster for the company.

Are you serious? The ones trashing yahoos share price is yahoo itself, Yang didn't want to deal months ago and got bit in the butt from his stupidity.

MS isn't forcing yahoo to do anything, the fact is that times have changes in those months that have past, Live and it's services are shaping up to be quite good, MS doesn't need all those extra and similar services, so why even pay for them now? All they every cared about was the search part of the company and still only do.

The general public doesn't even follow this mess, a mess that's been made by Yahoo itself. MS offered over and over, only to get turned down time and time again, so now they don't want to pay for the whole company when only one part is worth a dime. That's just smart business.

Ballmer hasn't hurt MS at all, aside from spoiling news early on new products.

GP007 said,
MS isn't forcing yahoo to do anything, the fact is that times have changes in those months that have past, Live and it's services are shaping up to be quite good, MS doesn't need all those extra and similar services, so why even pay for them now?

Microsoft was willing to pay a high price for Yahoo and was actively pursuing such an arrangement. Now Microsoft is happy to watch Yahoo shares slide in order to force their Live search engine upon them. We have seen this aggressive showmanship from Ballmer many times before, trashing everyone from Apple to Google in the media. It's sad that there is so much innovation from within the company but it is led by an imbecile that stands in such stark contrast to the company's public image.

lylesback2 said,
Steve Ballmer stated that the world doesn't need "3 googles".

So if the deal is finalized, which I am sure will be, Yahoo will move one step closer to being purchased by Microsoft, at a much much lower price tag then $9/share. I would think they are waiting till Yahoo shares even out a little, probably around $3-5 a share, and acquire Yahoo.

With the money saved from buying yahoo at a fraction of the price they could go after AOL and FaceBook as well.

theyarecomingforyou said,
Microsoft was willing to pay a high price for Yahoo and was actively pursuing such an arrangement. Now Microsoft is happy to watch Yahoo shares slide in order to force their Live search engine upon them. We have seen this aggressive showmanship from Ballmer many times before, trashing everyone from Apple to Google in the media. It's sad that there is so much innovation from within the company but it is led by an imbecile that stands in such stark contrast to the company's public image.


They aren't forcing Live search on anyone. That's they're offer as it is now. Yahoo was worth something when it was still good for $33/share. It's not worth anything anymore. Maybe if yahoo wouldn't have been run by a complete idiot who made a complete ass of the company while negotiating with MS, there'd still be a deal on the table.