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back to article Microsoft walks away from Yahoo!

Microsoft today abandoned its attempt to buy Yahoo!, after a short weekend of negotiations in which it raised its $44.6bn offer by $5bn. Microsoft thinks the deal still makes sense, if not at the price - another $5bn - that the Yahoo! board wants. But it won't go hostile - as Yahoo! would engage in scorched earth tactics, it …

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Someone sue Yahoo! please!!!!!

I'm sure their shareholders will be delighted when the stock falls down to $20, or even lower.

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Anonymous Coward

Micro$oft screwed me again...

I was planning on getting some stock in Yahoo in preparation for a buy out or takeover, but no...

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Gates Halo

Hostile takeover!

Who needs to perform a hostile takeover at an inflated price when you tell your future shareholders what their current board has refused? Let the owners tear current management apart, share price will drop, can buy it for even less than the initial offer.

Smart one, Balmer.

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Jobs Halo

WordPerfect All Over Again

Reminds me of when Novell bought WordPefect back in 1994 for $1.4 billion. It was worth a fraction of that only two years later.

Personally, I think MS should concentrate on improving it's search technology in order to win advertisers and content providers from Yahoo.

Just my two cents worth. :)

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Heart

Better dead than Red (mond)

Like many, Yahoo believe it better to die in dignity than to be taken over by the big purple gorilla. I applaud thier gumption. Long Live Yahoo!!!

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Paris Hilton

What?

Ballmer does not want a to swallow hand grenade?

Paris - because like ! she takes all offers in the end.

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On the bright side

On the bright side, this could be what leads Yahoo to start focusing its business rather than trying to be all things to all men.

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Gates Horns

So they really wanted the sawdust, not the wheelbarrow

All along commentary to the MicroHoo! merger has talked about the boost that getting Yahoo! developers into Microsoft's online technology groups would make. Mr. Balmer has today put that concept to bed once and for all. In bed with the fishes, that is.

This latest missive from the Rampage of Redmond shows that Mr. Yang may be right in his intransigence to complete the merger. If MS was interested in the core technology, a higher price MIGHT be worthwhile, based on future value derived from leveraging Yahoo's greater technical knowledge across many of MS's faltering web initiatives. However, Mr. Balmer has clearly indicated that all they wanted to do was buy out the Yahoo! brand, most likely to simply grab its existing customer base and its valuable co-branding with products from many ISPs world-wide. Clearly an attempt to get past the revulsion that much of the world feels for the Microsoft brand in direct competition without having to do anything to earn it.

If MS were to absorb Yahoo! the ISPs that use Yahoo! for providing their customers a portal and web services (email, spam protection, online tools) would be faced with a very unsavory set of choices: keep Microhoo! as their portal and service provider; get Google as a replacement for these services; or create their own portal and tools environment. Expensive solutions all the way around for Yahoo's customer base, not what these clients need right now with other wolves howling at their doors (ie, regulatory oversight, customer dissatisfaction and all the expenses already in place to compete in the Web 2.0 marketplace).

I'm certainly glad now that I did not buy a few thousand shares of Yahoo! to reap a MS takeover windfall. And maybe it's for the best: maybe the ISPs and end users will realize how close to being p0wned by MS they came and start doing real work to insure that they don't get fooled by this type of move again.

Done. Or, as they say in the news business...

[30]

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Gates Halo

Balmer pulls another tier 1 business move

You have to give it to Balmer, yet gain hes pulled a master stroke, yahoo will be begging for MS in a few months, and MS has to do fuck all lol

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Paris Hilton

MS will be the winner

Mr Ballmer has made a good decision for once, at least now there is 45Bn $ available to improve Vista. All MS has to do now is push forward Windows 7 with Ads built in to the internal search engine. Some nice hacker will then find a way to remove the Ads It would be win / win for everyone except Yahoo.

Does anyone really use Yahoo anyway. Its one of the sites I block, its seems more like a playmobil engine/interface.

Long live google.........[ and windows 7 ]........

Paris, because she knows all about being in difficult positions.

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Thumb Up

Spot of irony there

I like Ballmer's comment about Google being able to put their prices up at will ! I know another company that does that too, pots kettles and black spring to mind so quickly when Stevie is gobbing off.

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IT Angle

The business of unfinished business?

It sounds like unfinished business to me with both parties needing redirection

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Gold badge

I think Ballmer is very worried about Google + Yahoo

The way I read the letter it's an attempt to poison the shareholders for any collaboration with Google.

Ballmer must be worried about that possibility if he tries to talk it down the way he does in his letter, Yahoo should certainly pursue this further.

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Gates Horns

Yahoo! Lives!

I mean okay they're small but all those services they do give will continue now Ballmer has cleared off.

The worst possible result here was for MS to buy them up and shut down the lot, maybe forcing us to choose between their search or perma-vandalised Google for our information.

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Linux

Ballmer did the right thing

For once Ballmer did the right thing. Borrowing more money under the current circumstances (credit crunch and falling MS share price) would have been very stupid.

As rubbish as Yahoo are they are in a better position than MS, buy buying Yahoo was not the right thing for MS - thought it was a good deal for Yahoo shareholders.

I suspect that MS's share price will now rise and Yahoo's will return to it's downward trajectory of pre-offer. If Microsoft do their FUD properly Yahoo's share price will plunge and Ballmer will be able to pick them up for a song in 12 months.

I don't actually care about either company, does anyone use a search engine other than Google anyway? but it isn't good for Google to have no competition, or else they will become lazy and sloppy.

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Linux

Finally something the Borg has failed to assimilate.

Yes some share holders will be up in arms and yes Yahoo! will take a hit, but at least flickr and YUI! are safe now (for a while).

Zimbra must be crying tears of joy, they still have a business now, whereas they would have been looking down the barrel of a shotgun under Microsoft. For developers Yahoo! have a lot to offer and a promising future, they've lust lost their way a bit in the age of Google's domination but face it who hasn't.

I've re-activated my Yahoo! mail account in celebration. Actually I might even start using it now.

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Gates Horns

Too many cooks...

Khaptain wrote: "Mr Ballmer has made a good decision for once, at least now there is 45Bn $ available to improve Vista."

Just what Windows needs; thousands more cooks to fix that broth...

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Silver badge

The show ain't over yet

Ballmer is Google-obsessed and wants to get into the search/advertising/portal game (again, since MSN broke). Yahoo is the only opportunity to do this.

By walking away, MS are going to bring the wrath of the YHOO shareholders down on Jerry and friends. This is just a bargaining tactic.

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Gates Horns

The Microsoft Model - 3 E's

Microsoft tried to Embrace Yahoo!

Microsoft Extended their offer

Now Microsoft will Extinuish Yahoo!

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What Would Jack Welch Do?

[Jack Welch is the former Chairman and CEO of General Electric. He's a business strategy icon.]

There's a Jack Welch axiom fitting here: One, Two, Out. That is, if you can't be number one or number two in a business, get out. Microsoft is a number three on search (despite it being the default in IE). They gave it a good try. Now its time for them to give it up and get on with the rest of their business.

MS reminds me a bit of GE, actually. Lots of business units doing lots of different things. Most of them are global ones or twos. But XBox and MSN have been lagging for a long time. Its time for them to cut their losses.

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Jobs Horns

So, where were all these "smart move Steve" folk...

Back at the start of this thing? If it is now smart to walk away, then by implication starting on the takevoer bid was about as clever as yelling out "Chelsea!" outside Old Trafford.

So, now what are Microsoft's shareholders and serfs going to do? Breathe a sigh of relief, or start plotting a coup?

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Go

Nothing's changed, REALLY!

Let's see would a semi-astute business man with enough testosterone, that chairs cower at the mere mention of his name back down or would he attempt to fake out the chair company saying that he was no longer interested as he had some 3 legged stools he could use and their 4 legged model wasn't aerodynamic enough. After only a short period of time the confluence of the astute chair wielder's impatience and the threats of the leg manufacturer's union to sue Chairs! inc. leads to the purchase of Chairs! at a reduced price. The old haggling rules of offer, counter offer, threat to withdraw and cut price final deal win through. All the clever friends of the chair masochist buy a load of Chairs! stock, post crash, having garnered enough plausible deniability as they understood 3 legged stools were the new black for projectile fashion this summer. End result; unrealistic acting of indifference to the extra collateral available with the 4 legged Chairs! chair wins after all.

-This isn't financial advice /disclaimer

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Alien

Stocks

I come from Balkans so I'm pretty much sceptic about everything, especially when things look shady right from the beginning.

All I want to say is that it wouldn't surprise me at all if Yahoo made a deal with Microsoft (for a nice sum) to play this game for some time to boost the price of it's stocks (it doubled).

Or maybe there is a guy or group of people behind both companies so they just played around to get back to the game...

But what do I know, we didn't have computers before the collapse of the communism.

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Dead Vulture

MSFT dodged a bullet

Somebody made the WordPerfect analogy - I was thinking more along the lines of Time-Warner and AOL.

The acquisition made little sense and the value of companies like Yahoo is tenuous at best. I was watching with great interest... I thought the combination of Vista with a "successful" acquisition of Yahoo might yield a crippling blow to the company.

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go yahoo!!!!

suck e-peen ballmer

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Alert

@Adam Trickett

I also don't care about Yahoo's search engine or MS's search engine... But I do care about other services and offerings from Yahoo that MS would almost certainly close or ruin. Flickr for example... basically not compatible with the Microsoft way.

So now that MS is officially not going ahead, I guess I can safely pay for a Flickr Pro account without worrying about MS ripping me off.

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Gates Horns

MS's strategy - to break Yahoo?

@stuart - good point... Microsoft can buy up the pieces that will be result of the collapse of Y! when the shareholders blow the board away having lost their chance at selling their stock at an overvalued price.

Since M would have massively changed Yahoo anyway, breaking it up, it's financially better for them to buy it already broken!

Whether Microsoft actually wanted to buy Y! at all is an interesting question - merely by offering to buy them and then walking away will hit confidence in Y! so badly that it gives MS a chance to overtake them.

From a personal perspective, I only care about the fortunes of Y! because I like the Zimbra mail system and MicroHoo would certainly have killed that dead.

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anonymous junk 1

<<Micro$oft screwed me again...

By Anonymous Coward

Posted Sunday 4th May 2008 04:23 GMT

I was planning on getting some stock in Yahoo in preparation for a buy out or takeover, but no...

>>

Poor him. He was soooo smart to have decided to buy stocks that were lower than the price proposed by Microsoft and to sell them back to Microsoft for a higher price... Really, noone else would have had such a clever idea...

Think a minute and you might realize that the precise reason the price is not aligned with the offer is the fact it isn't certain. By buying the stocks cheaper, you take the risk of the deal fumbling, and the guy who's selling the stock to you is paying you that possible premium to take over that risk.

Saying you were screwed means you considered you should be able to get that premium without taking on the risk.

Seeing as you're unknowledgeable on this, you were actually saved. If it had proceeded, you might have bought, run into the realization of the risk you couldn't even understand, and lost half your money. Then you'd have cried foul, that it was unfair, that you were so clever buying for 32 for a deal at 33 and you don't understand why you got fucked when the deal dropped and the share went down to 16.

Thank Microsoft for not inflicting that lesson in stock management on you.

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anonymous junk 2

<<So, where were all these "smart move Steve" folk...

By Anonymous Coward

Posted Sunday 4th May 2008 22:35 GMT

Back at the start of this thing? If it is now smart to walk away, then by implication starting on the takevoer bid was about as clever as yelling out "Chelsea!" outside Old Trafford.

>>

Did you actually read what clever people said before making such a comment.

It should be easy to understand why both moves can be smart at the same time.

You probably even did this already in your own life.

You find an antique. You give it a lot of value, but you're not willing to sell the wife for it.

You suspect that in fact it is not worth very much to anyone else than you (you can make good use of it in your house, but it's very peculiar and not many other people would use it).

The merchant asks for your price. You give him. $29

Smart move no? If you give him a price and he accepts, you get the thing for a good price (for you, probably a price too high for anyone else, but what do you care as long as it's useful for YOU? you valued it around $33).

Then imagine the merchant is cunning and tries to get you to overpay. He asks for more than you're willing to pay. $37

Then you say no. Smart move no? You refused paying more than you thought it was worth to you.

Strange how both moves are smart, one being offering $29, the other being refusing to pay $37.

Or would you say that anything you ever thought was a good thing to buy at 29 would have been a smart buy at 37? and anything that it was smart not to buy at 37 should not have been bought at 29?

Then of course, it only gets even smarter once we take into account the fact the merchant probably won't be able to do anything with the ware he kept, and won't be able to sell it to anyone else for more than 20.

You can come back the next week-end and propose $22 instead of $29 and he will probably say yes in despair.

Now, this just *might* not be smart, though it looks awfully like it.

But in any case, your own comment was anything but.

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Silver badge

Up and down sides for MS

This can be interpreted in many ways:

MS won't be pissing $45bn into a hole in the ground: Good for MS.

MS lose the chance to get at all those yummy programmers that they can't hire on the open market: Bad for MS.

Yahoo management: Get to moon Ballmer. Must feel good

Yahoo management get minced by shareholders: Pain, pain, pain.

Google don't have to face a consolidated opponent: Google might have had a short term problem there, but in reality MS+Yahoo were both sinking anyway. Google wins.

MS and Yahoo would have dragged eachother down: Google looses.

The only people who have definitely lost are the YHOO! shareholders.

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Pirate

data.. put them all to sleep

meh.. resistance is futile..

they'll come back in three months and get it half the price

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Coat

@Mike

Riiight! And can you tell me why Jack Welch quit GE?

He famously tried to acquire Honeywell, leading to confrontation with the European Competition Commission over worries over monopolization over certain markets. One that level Wal-Mart should have bought Asda, Morrison's should have bought Safeway and they are only number three and four.

I will get my coat, with a book on competition law in the pocket.

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Google + Yahoo!

Google will kick Yahoo to the side now; there is no threat from them or thier inferior product. Why spend money on something, when you already have something better and you are number 1?

With the way Mr Yang has screwed up Yahoo!, even if MS was to do a hostile takeover, Google wouldn't help out Yahoo (it was an idle threat), Yang would have wanted the world from Google, and they would have left soon.

Mr. Yang should enjoy this moment for the time being. After the stock falls today (and nobody will re-purchase in profit taking), Mr. Yang will find himself dead to the business world. This is the only thing he has, and it is about to fall. His greed only hurts those who work(ed) for him.

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Hmm...

Do you think we'll be seeing motions of no-confidence in the board of Yahoo! at the next shareholders' AGM? I wouldn't be supprised - the share price went up from (IIRC) $19 to $32 and is going to shoot down, way down. Also rumour is that a lot of Yahoo! staff are really unhappy about the outsourcing of advertising to Google. Not good times...

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Gates Horns

@ Laxman

Yahoo! shares are now trading roughly at the same price as before Micro$oft's unwanted advances - meaning the only people to make money from this debacle are the speculators who drove up Yahoo! share prices in the first place Long term share holders are no worse off now than before and their faith in the board of Yahoo! has been borne out.

Now, let's get back to the real business of search engines - advertising!!

Evil Bill - because he is ...

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Bronze badge

Pretty simple: Deal, or No Deal

Steve just closed the door on the big read "deal" button and said "No Deal". He obviously thinks that the price is too high.

His next step is to wait a while and open up more cases. He is betting that the banker is going to have a better offer, and then he might take it.

Me, I'd give it a couple of months, and wait for the next "Deal". Given the way the stock price is floating around, the price is going to be lower and then Stevie boy is going to press the big red button saying "DEAL".

Of course, this does not take into account all of Yahoo!'s customers who once Microsoft does take over are going to be screwed royally (what do you mean Yahoo! only works on IE?).

(*SIGH*)

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typical

I reckon as a company they could probably keep going and do a good thing on their own, but as per usual the shareholders couldn't give a rats ass about that, it's about a quick win from m$ then they can feck off with their dough to the next company who needs screwing. I guess it was inevitable

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Gates Halo

isn;t it time

to remove the evil bill / good bill icon and replace it with Balmer icons ?

And where is todays update ? apparently yahoo is getting kicked by its shareholders... www.mercurynews.com

Good Bill because all he does now is charity.

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