Yahoo formally rejects Microsoft offer

Yahoo has formally rejected Microsoft Corp.'s $44.6 billion takeover bid as inadequate. The response had been expected after Yahoo's intentions were leaked over the weekend.

Many analysts expect Microsoft to raise its offer by $5 billion to $12 billion to entice Yahoo to sell. Yahoo is believed to want a bid of at least $56 billion, or about $40 per share. The decision could provoke a showdown between two of the world's most prominent technology companies with Internet search leader Google Inc. looming in the background...

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Microsofts Response to Yahoo! Announcement:

"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."

A hostile takeover in the making ???

Oh Yahoo... you aren't even worth what Microsoft has offered you. Don't be too greedy it will be the end of you.

That said, I am glad the purchase didn't go through. I don't see the benefit for either side and really like Yahoo and Microsoft the way they each are.

They should sell out to Microsoft, its in their best interest, both in terms of financial and stable growth. They just don't want to sell out to Microsoft because in the end...its "Microsoft". Oh please, let them dominate the world already!

Yahoo can bounce back. Good for them not selling out. They have good things going for them despite financial woes (i.e. - innovative IM and e-mail, Yahoo Answers, an upcoming music service, and more).

The issue in the case of Yahoo's board is that it very much *is* all about the money. Other than Jerry Yang (who was there when the company started), most of the current board climbed on when Y! stock was higher than it is now, and they want a positve return on their investment. $50 is significant, as it is above the all-time high for Y!'s stock. The majority of the current board (which is responsible for Jerry Yang coming back) is responsible to the big institutional investors, who invest to make money, not lose it. Pretty much the only company that has the bucks to bail out Yahoo *is* Microsoft (Google is the dominant search and online advertising player, so it would be in a worse antitrust position than even Microsoft, and I certainly don't see Time-Warner (who just put AOL on the block) rushing back in to make another Internet play; Comcast would be even less likely). The deal will get done; however, this is just posturing by the suits to drive up the price.

Definitely a good move on Yahoo's part. Otherwise, Microsoft would be facing so much trouble by anti-trust regulators that the buyout wouldn't have been worth it anyway, seeing how Microsoft already dominates the web browser (less now, but still they have 75%+ of the market), OS, and productivity suite software markets.

I think Google will buy Yahoo. It is well known Yahoo doesn't like Microsoft and I don't think they will sell out at any price to them, in fact I'd be as bold to say they are waiting for Google to make an offer. Naturally this is purely my opinion and should be taken with a grain of salt.

You haven't read many of these related stories have you?
Google doesn't have the money to even approach MS's bid, let alone surpass it.

And the board obviously can't accept a lower offer, regardless of who it's from.

Microsoft lost the plot a few years ago. I suggest that Yahoo will be as good for Microsoft as AOL was for Time Warner :confused: A match made in heaven :nuts:

Microsoft need to start looking at making money outside the US, because the economy is just about to implode. I would suggest that the purchase of Yahoo (which would use a sizable chunk of Microsoft's cash reserve) is to generate cash outside North America. MS markets by geographical breakdown. (based on volumes) in 2004: Europe. 28%. North. America. 28%. Asia. 30%. Rest of the. World. 14%. Wonder what it is now!

This makes me a bit perturbed. The buyout would have been good for the stockholders, good for the company as a whole which just had to let go of a large group of employees and good for technology. The only thing it was bad for was the board members, and by bad i mean it wasn't enough money for them and their children and grandchildren to retire and buy islands in the pacific. Hopefully Microsoft makes a slightly better offer and yahoo takes it before more talented engineers get fired. I hate to see technology and progress suffer at the hands of big business.

I'd laugh if this caused the share holders to get rid off the board members. Surely the shareholders would have done very well out of this.

These days microsoft works to seek out new ideas and dominate them, not necessarily think of the ideas themselves. Yahoo has a broad customer base, so does AOL/TWC... buying the company buys the customers.

(Volatile said @ #5)
These days microsoft works to seek out new ideas and dominate them, not necessarily think of the ideas themselves. Yahoo has a broad customer base, so does AOL/TWC... buying the company buys the customers.

First of all, MS has always copied ideas or bought anything it couldn't beat. MS lost not just to Google, but to Yahoo. You think Yahoo is doing bad? MS Live is doing even worse. Except MS has billions to throw at Live to keep it afloat. Apparently, MS has billions to throw at Yahoo too? But I don't see how buying Yahoo will help MS, other than give MS the opportunity to kill off one of its competitors. Yahoo users don't give a damn about Yahoo very much, and they really won't give a damn about MS Live.

MS's strategy of imitation and its arrogant attitude towards Windows users, which MS treats like a captive audience, is coming back to haunt MS. Now MS is caught up in a dozen non-profitable schemes and its cash cows are starting to lose their exclusivity. Windows users are either not upgrading like MS demands they do, or they are finding that alternatives to MS's tyranny exists.

That same arrogant attitude is the reason why no one wants to use MS services. People have learned that dealing with MS is like dealing with the devil. MS is a dishonest company.

@Toadeater:

That was quite ignorant. Yahoo's services have been around for over a decade, while Live has just recently established itself in the past two years.

And this imitation, you say.. I ask you to name one company that doesn't improve on other's ideas but rather does everything totally randomly. It's a strategy, and it's bringing in billions. If I was in control of Microsoft, I wouldn't destroy a perfect money making strategy in order to make a few people happy.

Funny how they say inadequate. They want to sell. What happened to not wanting to go to big bad Microsoft, was that just Yang ?. I wonder if MS will even bother offering more, seems like a very cheeky ploy by Yahoo though fair enough because Microsoft look desperate, worth a shot really.

If they do get bought out do you think MS will axe MSN and Windows Live. Does anyone else think they're a shambles ? Microsoft just seem to have way too many services, all over the place. I know Live is new and all, but it's just come off as lame from the start.

MS possibly, Live no. Live isnt really in huge competition with Googles services. Some overlap but then alot of those that do are more popular than Googles generally (messaging). They may cut back some services but.

Stupid Yahoo board... I guess one way or another they won't be seeing the inside of the board room much longer. They'll either go belly up or get thrown out by the shareholders for rejecting a profitable buyout.

(Emil Protalinski said @ #2.1)
Yahoo wants to buy AOL? Umm, I'm pretty sure that was around 2005.

No it was MS that wanted buy them, but then Google brought a 5% stake in them.

(nezermundy said @ #2.2)

No it was MS that wanted buy them, but then Google brought a 5% stake in them.

No there was a story today somewhere that Yahoo wants to buy AOL now

(neufuse said @ #2.3)

No there was a story today somewhere that Yahoo wants to buy AOL now


Mind looking around for it again? I'm a little doubtful but interested nonetheless.

(Emil Protalinski said @ #2.4)

Mind looking around for it again? I'm a little doubtful but interested nonetheless.

Google it for both stories