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Apr 12, 2001
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Microsoft Walking Away from Yahoo Acquisition

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On February 1st, Microsoft made headlines after publicly offering to purchase Yahoo for $44.6 Billion ($31/share). Microsoft's interest in Yahoo was primarily focused around their advertising business in an attempt to gain talent and technology in that sector to further compete with Google. On February 9th, Yahoo officially declined the offer due to claims the bid "massively" undervalued Yahoo.

Negotiations continued, opening the possibility for a hostile takeover from Microsoft. In the end, however, it appears Microsoft is walking away from the negotiations and will not pursue a hostile takeover.

In a letter from Microsoft's Steve Ballmer to Yahoo's Jerry Yang, Ballmer detailed his reasons. In the end, Yahoo was insisting on a $53 billion price ($37/share), while Microsoft's offer topped out at $47.5 billion ($33/share).
"Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer. After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal," said Ballmer.
Another key factor included Yahoo's recent outsourcing of advertising services to Google, which could introduce regulatory hurdles in pursuing an acquisition.

Article Link
 
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CalBoy

macrumors 604
May 21, 2007
7,849
37
That news could not have come at a better time from a market stand point.

I don't know...

Yahoo! shares will undoubtedly fall on Monday and Microsoft might see a slight increase on Monday. That might encourage Microsoft to try again in the near future.
 
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trip1ex

macrumors 68020
Jan 10, 2008
2,338
739
Man I was tired of reading about this deal. So hopefully it is done.

I don't think MS really wanted to buy them. They just wanted to make sure a competitor has to pay a lot to acquire them.
 
Comment

BOSS10L

macrumors 6502a
Jan 13, 2008
588
0
Upstate NY
$6.5 Billion? They let Yahoo walk away over a paltry $6.5 Billion? That doesn't sound like the M$ I know and loathe.

As already said though, definitely not an unwelcome development.
 
Comment

jbernie

macrumors 6502a
Nov 25, 2005
927
11
Denver, CO
Will be interesting to see what the major Yahoo! shareholders do, I am guessing everyone was just excpecting Microsoft to pay the higher price at the end. Well they did offer $33 per share as compared to about $19 when they first made the bid.

Microsoft shareholders in general will be happy as they seemed to be the ones most unhappy about the bid in general (except for Jerry Yang at Yahoo).

Will be interesting to see if Microsoft goes after Salesforce.com, SAP or maybe someone else, they obviously have the $$$ and the interest in an acquisition.
 
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CalBoy

macrumors 604
May 21, 2007
7,849
37
Well, hopefully Yahoo's stock with rise again :D
That can only happen if Yahoo! gets its act together and starts delivering products people want.

Google didn't become popular simply because its homepage has a nice color scheme; Google offers better services than either Yahoo! or MSN, and that's why it is dominant in that market.
I don't think MS really wanted to buy them. They just wanted to make sure a competitor has to pay a lot to acquire them.
That doesn't really make much sense considering Microsoft's weaker position in the online market. Microsoft actually needed Yahoo! so it could buy itself a larger market share in internet advertising.

If anything, Microsoft's sudden pull out today will make the stock fall on Monday and make it easier for someone else to buy Yahoo!.
As already said though, definitely not an unwelcome development.

Depends on what point of view one approaches this from.

The only real winner out of this development is Google.
 
Comment

backdraft

macrumors 6502
Nov 4, 2002
332
13
USA
Death of Exchange!!!

Zimbra is Saved!!!!
http://www.zimbra.com/

Sun should buy them. Seeing as Apple wont.

Would love to see an Apple-Sun Merger Mac OS X + Solaris = Ultimate OS.

XRaid EOL? Replace with a ZFS enabled Raid with an Apple face lift. Sun knows Servers and Apple knows the Desktop/Client Side.

Apple needs to include an Exchange killer with Mac OS X Server they should integrate Zimbra if they don't buy them (else open exchange, Scalix port). Wouldn't mind a Content Management System either

VOIP: Asterisk, FreeSwitch

A video on demand system (Quicktime Server + Cataloging/FinalCut Server) combined with Joost front end.
 
Comment

elppa

macrumors 68040
Nov 26, 2003
3,232
114
As far as I see it the good guys won.

Well done to Jerry Yang for playing this one smartly. Who looks like the better leader now? I guess Ballmer was pragmatic, which is something I didn't think we'd see, but Yahoo definitely can score this a win. They never wanted to be taken over, least of all by Microsoft and now they have their wishes.

Microsoft should try buy AOL I reckon next. The “corporate cultures” the analysts like to talk about couldn't be better matched. :)
 
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zama36

macrumors member
Mar 21, 2007
86
8
As an MS employee, thank goodness!!!

It's about time Ballmer stops wasting time. He should have been fired for Vista. He needs to stop wasting time and money.

MS has a great pool of talent. If there was real leadership, MS would be innovating not copying.
 
Comment

elppa

macrumors 68040
Nov 26, 2003
3,232
114
Zimbra is Saved!!!!
http://www.zimbra.com/

Sun should buy them. Seeing as Apple wont.

Would love to see an Apple-Sun Merger Mac OS X + Solaris = Ultimate OS.

XRaid EOL? Replace with a ZFS enabled Raid with an Apple face lift. Sun knows Servers and Apple knows the Desktop/Client Side.

Apple needs to include an Exchange killer with Mac OS X Server they should integrate Zimbra if they don't buy them (else open exchange, Scalix port). Wouldn't mind a Content Management System either

VOIP: Asterisk, FreeSwitch

A video on demand system (Quicktime Server + Cataloging/FinalCut Server) combined with Joost front end.

Sun Open Source most of the technologies in Solaris, so Apple can just hover up the bits they like (D-Trace, ZFS) and leave out the bits they don't and avoid the sticky issue of a merger.

Which is what they do at the moment.
 
Comment

MisterMe

macrumors G4
Jul 17, 2002
10,709
63
USA
This was a dumb idea from the start. There was upside but plenty of downside to the move:
  • No upside. Microsoft already has MSN and Hotmail. What can the Redmond Monopoly hope to gain from Yahoo.com that it doesn't already have with its existing properties?
  • Downsides. Yahoo.com is one of several pioneer web portal/search engines. However, it has lost the march to Google. A Microsoft/Yahoo combine would have left Google with fewer competitors, not a larger, stronger competitor. Result: A stronger Google, exactly the opposite of what Microsoft wants. As a technology company, Yahoo's primary assets reside in the brains of its employees. A buyout would have prompted a significant number of them to go elsewhere. Microsoft would have been left with the empty hulk of Yahoo.com.
For all of its bluster and the blind fear or adoration of most technology fans, Microsoft has been on the decline since 1999. Many ignored the larger implications of products like Windows Me and Windows Vista. They also paid scant attention when Microsoft's bailed on the MSNBC cable channel. They did not even fully grasp the implications of the fact that the Xbox and Xbox 360 lose money.

The general public may not yet understand, but clearly Microsoft's corporate colleagues and competitor's understand. The Big Bad Wolf huffed and puffed, but it could not blow down Yahoo's house of straw. What's next? Stay tuned.
 
Comment

Cromulent

macrumors 603
Oct 2, 2006
6,064
42
The Land of Hope and Glory
Sun Open Source most of the technologies in Solaris, so Apple can just hover up the bits they like (D-Trace, ZFS) and leave out the bits they don't and avoid the sticky issue of a merger.

Which is what they do at the moment.

I always thought Apple and SGI had more in common than any other computer company. But yeah Apple just use the best bits from Solaris without having to take on the extra baggage that Sun would bring. Although it would help them out in the enterprise market.
 
Comment

amac4me

macrumors 65816
Apr 26, 2005
1,303
0
Good news. I don't think the merger would have worked in the long run.

Better for consumers and the industry as the merger would have eliminated choices ... Microsoft most likely would have killed Yahoo Messenger and Yahoo Mail.
 
Comment

beez1717

macrumors member
Oct 16, 2007
80
0
Earth
what I think

This is the best news we could have gotten: if micro$oft had baught yahoo, then we would have seen a large chunck of the internet being ruled by a tyrent and that is never good for an industry or location.
 
Comment

aforty

macrumors 65816
Nov 27, 2007
1,422
544
Brooklyn, NY
Jerry Yang should be forced to resign. If I was the head of a fast-sinking ship, I'd take the money and run.

Dumb move by Yahoo, their stock will tank come Monday and they'll be begging Microsoft for their initial bid. That said, this may happen after all. Smells like classic Microsoft takeover tactic.
 
Comment

Analog Kid

macrumors 603
Mar 4, 2003
6,034
5,300
Well that was a lame anticlimactic ending
:D I have to agree.

My guess is the MS shareholders finally got through to Balmer with a message along the lines of: "You keep killing all the pets let you buy. Prove you can take care of your hamsters and then we'll talk about buying a pony."

This never made sense to me, and I don't know why MS seems to feel the need to get into online advertising. Take the $40billion and give it to charity, but there's no need to kill Yahoo in the process...
 
Comment

Kwill

macrumors 68000
Mar 10, 2003
1,595
1
This was a dumb idea from the start. There was upside but plenty of downside to the move:
  • No upside. Microsoft already has MSN and Hotmail. What can the Redmond Monopoly hope to gain from Yahoo.com that it doesn't already have with its existing properties?
  • Downsides. Yahoo.com is one of several pioneer web portal/search engines. However, it has lost the march to Google. A Microsoft/Yahoo combine would have left Google with fewer competitors, not a larger, stronger competitor. Result: A stronger Google, exactly the opposite of what Microsoft wants. As a technology company, Yahoo's primary assets reside in the brains of its employees. A buyout would have prompted a significant number of them to go elsewhere. Microsoft would have been left with the empty hulk of Yahoo.com.
For all of its bluster and the blind fear or adoration of most technology fans, Microsoft has been on the decline since 1999. Many ignored the larger implications of products like Windows Me and Windows Vista. They also paid scant attention when Microsoft's bailed on the MSNBC cable channel. They did not even fully grasp the implications of the fact that the Xbox and Xbox 360 lose money.

I understand the brains of Yahoo do not want to become MS employees. On the other hand, Yahoo is not worth anywhere near what MS was offering. It was an interesting battle of wills. I think (hope) Yahoo won out.
 
Comment
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