Microsoft Walking Away from Yahoo Acquisition

[G58]

Okay, copy and paste this one for future reference, it's my last fee lesson!

Where Google has become THE search engine, Wikipedia is the universal source of peer reviewed reference on everything. That's a given.

At times of heightened interest in a company, you'd expect the number of searches on the history and details of that company to rise. Indeed this is exactly what normally happens. Information is the most valuable tool in any situation.

But in Yahoo's case this hasn't happened - indicating that there isn't the level of interest in finding out the facts. It's also an indication of the level and quality of strategic thinking surrounding Yahoo.

The idea that smart people talk a lot and talk bull**** when they do is a common myth. In reality, smart people ask questions - lots of them. The best place to start is Wikipedia. It's just not happening here.

This is why I've been so derogatory about this whole deal. It's like watching two mangy old dogs in the street negotiating a conjugal congress... and the dog ultimately deciding the bitch is asking too high a price - and her thinking: he stinks!

But like all old dogs, you know they'll be back sniffing at each other again. But it still won't attract the thinkers. And those who don't think still won't be pulling the Wikipedia page up the rankings.

forgive me, i don't understand what you are pointing out.

 

[Rocketman]

If I were Microsoft I would "opportunistically" buy Yahoo stock in the open market starting now and going forward until they have a substantial percentage ownership. The market price is a substantial discount to their offer which would have the effect of making any future actions a dollar cost averaged down activity.

Rocketman

 

[coleridge78]

You can't use those numbers to support your argument. That study represents the market share for Internet SMTP mail exchangers and not the entire mail transfer agent space. Lots and lots and lots of places that use Exchange for their internal e-mail systems use either sendmail or postfix for their MXes. Exchange's SMTP gateways just don't work well for large SMTP loads.

The fact that the study compares sendmail, postfix and Exchange should have been a dead give away, even if people didn't read the article.

Well, "smtp exchangers" are the "mail transfer agents space", technically, but I get what you're saying. You're differentiating user mail service (IMAP, POP, MAPI, etc) from the border. And you're right, as far as it goes, but what you *can* suss out from those numbers is that it's utterly bonkers to think that Exchange, even for internal handling, has a majority of the market. Even if *all* of the Barracuda, Postini, Sendmail, and Postfix sites were using Exchange internally, that *still* wouldn't push them over 50%; and that's obviously a ludicrously generous scenario.

That's odd. His definition is pretty consistent with industry accepted practices and a quick search found multiple on-line dictionaries with at least one consistent definition.

I'd be interested in backup that comes from someone who doesn't make money off promoting the notion of an "enterprise" (ie, "you're big bad and special!") to C*Os. An enterprise is any group or organization engaged in a purposeful activity; his definition was "a large company with many employees having deadlines to get product to market and trying to make a lot of money for shareholders". That is something else entirely, namely, a large corporation, which is only one of many types of enterprise, and in the overall scheme of the market, one that is responsible for comparatively little of our economic activity and overall jobs. Hence I submit that it is meaningless, if not outright idiotic, to call that "THE" enterprise.

 

[G58]

I actually guessed 40th on the basis of the amount down the page it was. But, in the interests of accuracy and being as I'm so keen on the right information, I actually counted them. Sad but true!

In a Google search in Safari on a MacBook Pro on the deck of my yacht, using the local wifi network, the Yahoo Wikipedia page came up exactly 40th!, not 39th, not 41st and certainly nowhere near 27th.

Its actually 27th, and the links above that are all to Yahoo! pages.

 

[hagjohn]

I smell a shareholder lawsuit coming soon.

 

[milo]

Good news for AAPL, and the stock is up even more today. I'm sure this didn't hurt.

I knew MSFT has been stagnant but hadn't really looked at it for a while - it's still below the highs in 1999 or so! I can't imagine why anyone would want to own it these days, maybe they pay a bit of a dividend?

 

[jakeOSX]

Okay, copy and paste this one for future reference, it's my last fee lesson!

Where Google has become THE search engine, Wikipedia is the universal source of peer reviewed reference on everything. That's a given.

At times of heightened interest in a company, you'd expect the number of searches on the history and details of that company to rise. Indeed this is exactly what normally happens. Information is the most valuable tool in any situation.

But in Yahoo's case this hasn't happened - indicating that there isn't the level of interest in finding out the facts. It's also an indication of the level and quality of strategic thinking surrounding Yahoo.

The idea that smart people talk a lot and talk bull**** when they do is a common myth. In reality, smart people ask questions - lots of them. The best place to start is Wikipedia. It's just not happening here.

This is why I've been so derogatory about this whole deal. It's like watching two mangy old dogs in the street negotiating a conjugal congress... and the dog ultimately deciding the bitch is asking too high a price - and her thinking: he stinks!

But like all old dogs, you know they'll be back sniffing at each other again. But it still won't attract the thinkers. And those who don't think still won't be pulling the Wikipedia page up the rankings.

i am going to politely disagree.

the way i see it, the fact the wikipedia was so far down is a good thing. it shows that the actual tools yahoo provides are much more visited than the wikipedia page.

while the wikipedia is important, it makes more sense to use it for a company that is not a web company.

oh and to counter your argument, if you google 'google', the wikipedia page is 69th. obviously google is less relavent than yahoo....

 

[ktlx]

Well, "smtp exchangers" are the "mail transfer agents space", technically, but I get what you're saying. You're differentiating user mail service (IMAP, POP, MAPI, etc) from the border. And you're right, as far as it goes, but what you *can* suss out from those numbers is that it's utterly bonkers to think that Exchange, even for internal handling, has a majority of the market. Even if *all* of the Barracuda, Postini, Sendmail, and Postfix sites were using Exchange internally, that *still* wouldn't push them over 50%; and that's obviously a ludicrously generous scenario.

You can't use the original article to extrapolate in any way from a snapshot of Internet-visible SMTP mail exchanger records to the mail transfer agent market share. The two simply aren't statistically related. The article linked to doesn't even pretend to present that information either and is pretty clear about what it's numbers mean.

To take a ludicrous example, company A running two postfix servers for both MX and MTA and company B running two sendmail servers for MX and 200 Exchange servers for MTA (behind the sendmail servers) both contribute 50% market share for postfix and 50% for sendmail using their MX share calculation methodology. However, the MTA market share would be 98% for Exchange, 1% for postfix and 1% for sendmail.

 

[bluefido]

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.

This is not really good or bad news. Just news. Google is now the 800 lb. gorilla in the room...I bet you in about 10 years everyone is going to rail on about how Google is ruining the tech industry. The same thing that Microsoft did to IBM, Google is now doing to Microsoft.

Web apps will replace traditional OSes (including OS X) and applications (including Office). I guess I can care less whether Microsoft was successful or not, but it seems so odd that fanboys take it as a struggle between good and evil.

Yahoo didn't sacrifice anything. It threw away billions of it's shareholders money. Deny Micosoft what ? It's virginity ?

Exactly. If I was a Yahoo! shareholder, I would be furious right now. What plans does Yahoo! have now to return its stock price up to what Microsoft had offered? Undervalued? For being Google's whipping boy? I don't really have sympathy for Microsoft, but at the same time, I find the constant paranoia amongst Mac fans to be stupid.

 

[G58]

I get the Wikipedia 'google' entry at position 25!

But I'm using uk Google:

<http://www.google.co.uk/search?num=100&hl=en&safe=off&q=google&btnG=Search&meta=>

From Yahoo's point of view, if they're only thinking about page ranking. But in this case they shouldn't be... again, in my humble opinion.

The story that Yahoo is "the most visited page" is an interesting one. With all those different links to pages, I decided to do some digging. I discovered they're mostly links to pages that accessible from Yahoo's main page.

And now I've been forced to revisit what was for me a rather painful period in my past. I detest clutter on web pages, so I long ago stopped looking at any msn, aol and Yahoo pages, and therefore regret entering into this whole argument. The bill's in the post m8!

i am going to politely disagree.

the way i see it, the fact the wikipedia was so far down is a good thing. it shows that the actual tools yahoo provides are much more visited than the wikipedia page.

while the wikipedia is important, it makes more sense to use it for a company that is not a web company.

oh and to counter your argument, if you google 'google', the wikipedia page is 69th. obviously google is less relavent than yahoo....

 

[DMann]

Yahoo! Shares

I smell a shareholder lawsuit coming soon.

A drop of $4.17 is not nearly as severe as MS had imagined or hoped it's walk would affect the stock price - nor is it significant enough to fret over, especially since the stock price, which was hovering at $29, was based on pure speculation that MS would follow through with their desperately hostile take over attempt. A 12% drop in stock price is nothing these days, as it will likely shoot up again once Yahoo! announces it's future plans. If anything, this melodrama has increased Yahoo's perceived value more than any merger could possibly have elevated it.

 

[rjohnstone]

If I were a Yahoo! shareholder, I would be upset.

The MS bid brought Yahoo! out of the cellar. The return of Yang has done squat for Yahoo!'s value.
Their stock was falling and the MS bid was the only thing that gave them some life.
The charts clearly show the bump they got from the offer and the drop they suffered from the retraction.

All fanyboy crap aside, Yahoo! shareholders don't care WHO owns/runs the company as long as they are making money on their investment.
The charts below clearly show that the shareholders have not been happy with Jerry's progress so far.

 

[G58]

I agree with your first comment. But it contradicts your last comment!

If "Yahoo! shareholders don't care WHO owns/runs the company as long as they are making money on their investment." they deserve to loose their money.

If I were a Yahoo! shareholder, I would be upset.

...Yahoo! shareholders don't care WHO owns/runs the company as long as they are making money on their investment.

 

[coleridge78]

You can't use the original article to extrapolate in any way from a snapshot of Internet-visible SMTP mail exchanger records to the mail transfer agent market share. The two simply aren't statistically related. The article linked to doesn't even pretend to present that information either and is pretty clear about what it's numbers mean.

To take a ludicrous example, company A running two postfix servers for both MX and MTA and company B running two sendmail servers for MX and 200 Exchange servers for MTA (behind the sendmail servers) both contribute 50% market share for postfix and 50% for sendmail using their MX share calculation methodology. However, the MTA market share would be 98% for Exchange, 1% for postfix and 1% for sendmail.

No, it wouldn't. First, again, you're not quite clear on what MTA and MX are (MX is not a server, it's a DNS record type; and Postfix does not do user access to mail, which is the primary role of Exchange). On the substance of the argument, in your example Exchange would *not* have 98% of the market share. Market share is commonly measured (or is adjusted to measure) on a per-site (or more accurately, per-user) basis. Because it takes 200 Exchange servers to do the work that 2 "postfix" (in reality, these would be UW-IMAP, Dovecot, QMail, or the like) machines do, does not mean that Exchange is magically awarded with a designation of 98% market share; it has 50% market share, one of two sites (or a ratio of the users at each site). This makes for a meaningful statistic that reflects how many users each are serving, rather than a count of how many licenses or machines or etc it happens to take to serve X users--which is what you'd end up with in your example.

 

[elgrecomac]

Thank God. Yahoo! is far too good of a site to be eaten up by Microsoft.

So they will ultimately be swallowed up by Google...gee...now that DOES make sense.

 

[Don.Key]

Web apps will replace traditional OSes (including OS X) and applications (including Office).

Return to Thin Client, retry number 1001.

Maybe this would be an option in large corporations capable to run their own servers but in SOHO environments this is very unlikely. Usage of online apps is privacy killer and security nightmare. Anyone using google office basically submits all his documents to data squid without any chance to control what happens with them.

 

[weev]

I agree with this. And when I said earlier that MS would kill Yahoo, I didn't mean close it down, just pillage it.

Yahoo have perhaps a breathing space, they can try and swim further or just bob about and wait for the next attack.

A slow death, or a slow resurrection. Who knows?

A drop of $4.17 is not nearly as severe as MS had imagined or hoped it's walk would affect the stock price - nor is it significant enough to fret over, especially since the stock price, which was hovering at $29, was based on pure speculation that MS would follow through with their desperately hostile take over attempt. A 12% drop in stock price is nothing these days, as it will likely shoot up again once Yahoo! announces it's future plans. If anything, this melodrama has increased Yahoo's perceived value more than any merger could possibly have elevated it.

 

[rjohnstone]

I agree with your first comment. But it contradicts your last comment!

If "Yahoo! shareholders don't care WHO owns/runs the company as long as they are making money on their investment." they deserve to loose their money.

No contradiction... Bottom line is $$$.
I, as a shareholder of any given stock, don't care "who" is running the company. I care about earning a return on my investment.
Losing 14 billion in value overnight is something any investor would be pissed about.

Jerry Yang's arrogance will be his undoing. If Yahoo! was in a better position I could see it, but they were trading at $19 a share prior to MS making their bid.

 

[Erwin-Br]

If "Yahoo! shareholders don't care WHO owns/runs the company as long as they are making money on their investment." they deserve to loose their money.

I have yet to meet the first shareholder who invests in a company for a reason other than making money. I don't think Yahoo shareholders invested in the company because the name sounds so funny.


--Erwin

 

[BongoBanger]

As mentioned previously, this is still ongoing - MS have made it clear they will not raise their bid to what Yahoo are looking for, Yahoo today have also made it clear the door is still open.

Which they had better do given the following:

But its two largest shareholders independently told The New York Times they would have sold for as little as $34.

"I am extremely angry at Jerry Yang and at the so-called independent board," Gordon Crawford, portfolio manager for Capital Research Global Investors, the largest Yahoo shareholder with some 16 percent of stock, told the newspaper.

The show's not over yet, folks.

 

[bluefido]

I agree with this. And when I said earlier that MS would kill Yahoo, I didn't mean close it down, just pillage it.

Yahoo have perhaps a breathing space, they can try and swim further or just bob about and wait for the next attack.

A slow death, or a slow resurrection. Who knows?

It's at $24 now, and more than likely, going to fall further. Yahoo! should of sold. When the deal was first announced the price was around $19.50, the price went up upon news of the Microsoft merger. Yahoo! really f***d it up for their stockholders.

 

[G58]

Ah, so you do care who runs Yahoo. I quote:

"Jerry Yang's arrogance will be his undoing"

It's absolutely vital who runs a company. Studying who runs a company, just as effective study of enemy leaders in military matters is at the very core of all victories. Montgomery studied Rommel during WW2 and wasn't at all surprised to discover [after the war and after Rommel was dead!], that the Field Marshal had done exactly the same!

Would a MacExpo be the same without Steve Jobs? Would the Pepsi man have done iPod/iTunes? Is it really a big surprise that so many more users are defecting from Windoze since Billious Gates left? and that lunatic Ballmer was let out of his pen?

Backing Apple before 1997 was obviously not a smart move. Gil Amelio was a disaster. Backing Apple in 2001 after the release of the first iMacs made much more sense. Backing Jobs, even when he first returned in 1997 was a leap of faith that I prefer to call a gamble. Backing Steve Jobs in 2001 made much more sense.

Study the personalities and make more money.

No contradiction... Bottom line is $$$.
I, as a shareholder of any given stock, don't care "who" is running the company. I care about earning a return on my investment.
Losing 14 billion in value overnight is something any investor would be pissed about.

Jerry Yang's arrogance will be his undoing. If Yahoo! was in a better position I could see it, but they were trading at $19 a share prior to MS making their bid.

 

[G58]

You appear to be confusing intelligent assessment with emotion. Sure, there are emotions involved, but the response is one of stone cold logic.

I have no idea why anyone would invest in Yahoo. But as someone who's launched and designed the corporate images for literally hundreds of companies, I have no idea why anyone would invest in a company CALLED Yahoo. It sucks like a drain imo.

In Part IV of Gulliver's Travels: A Voyage to the Country of the Houyhnhnms, the protagonist comes upon a race of (apparently) hideous deformed creatures, the "Yahoos", described as "human beings in their basest form."

Picture it!

That one would never have got past my desk. Neither would 'Ask Jeeves'. I might well have fired anyone stupid enough to suggest that a bald headed butler should be used to represent a search engine. Actually, I might have killed him.

Missing smiley? No, I'm quite serious.

I have yet to meet the first shareholder who invests in a company for a reason other than making money. I don't think Yahoo shareholders invested in the company because the name sounds so funny.


--Erwin

 

[rjohnstone]

G58
Point taken.

 

[hagjohn]

MS was offering $37/share. If they go back down to pre-"offer" (somewhere around $18.00, I think), stockholders will be very upset.

A drop of $4.17 is not nearly as severe as MS had imagined or hoped it's walk would affect the stock price - nor is it significant enough to fret over, especially since the stock price, which was hovering at $29, was based on pure speculation that MS would follow through with their desperately hostile take over attempt. A 12% drop in stock price is nothing these days, as it will likely shoot up again once Yahoo! announces it's future plans. If anything, this melodrama has increased Yahoo's perceived value more than any merger could possibly have elevated it.