Here is the internal e-mail from Microsoft CEO Steve Ballmer to Microsoft employees explaining the Yahoo acquisition offer:
From: Steve Ballmer
Sent: Friday, February 01, 2008
To: Microsoft – All Employees (QBDG)
Subject: Proposed Acquisition of Yahoo!
Today, I am very excited to announce that Microsoft has made a proposal to acquire Yahoo!. This announcement represents a big opportunity for Microsoft, and is the next major milestone in our companywide transformation to embrace online services, search, and advertising.
By combining the strengths of our companies, we can deliver an efficient and highly competitive offering for our customers. Our complementary assets will give us increased talent and scale to compete in the markets of search and online advertising, and pioneer new innovations in the areas of video, mobile services, online commerce, and social media.
This year, online advertising is a $40 billion business. It will grow to $80 billion by 2010 and will continue to increase in the years beyond. This market provides a significant growth opportunity for Microsoft—our ability to provide the best search and online experiences for consumers, and the best ad platform for publishers and advertisers, is the key to unlocking this opportunity.
We are on a good path with our existing search and advertising product roadmaps. To date, we have made progress in our organic online services and advertising efforts, and by joining with Yahoo!, we will take the next step toward becoming a major search destination and social platform for consumers. The combined reach of our content properties and combined breadth of our tools for advertisers will enable us to provide an online advertising platform at scale. Together, we’ll create a company that is in a much better position to compete against an increasingly dominant player in this market.
Through our recent acquisitions of aQuantive and Tellme, we understand what it takes to successfully integrate new talent, assets, and infrastructure into our company. Leaders from both Microsoft and Yahoo! will work together closely on the integration process to ensure that we are thoughtful about the questions we ask and the decisions we make. As we move forward, we’ll look carefully at how to bring our assets together to create the greatest value for customers, employees, and shareholders.
During this transition period, I urge you to stay focused on your commitments and team goals. We are committed to communicating with you frequently as our leadership team works on bringing the two companies together.
As I outlined in my quarterly strategy email last week, we grow by anticipating new areas where software has the greatest potential to create opportunities. The proposed acquisition of Yahoo! will transform our ability to compete as new opportunities in online services, search, and advertising emerge.
I am very excited about today’s announcement and about the collective talent and energy we will bring to the industry. A great opportunity is in front of us to evolve how people and businesses create, find, and use information. Through today’s proposed acquisition, we can take our business to new levels of success and growth.
Kevin Johnson, Chris Liddell, Ray Ozzie and I will host an employee web cast that can be viewed live beginning at 10:00am PST and will also be available on-demand. You can link to the web cast at http://msw/NewsEvents/StudioCas
ts/Pages/conferences.aspx
Steve
Online advertising $80 billion by 2010?
I am amazed the fake Steve Ballmer hasn’t been posting
Buy the company!!! Stockmarket is going nuts overseas.
Investors talked very loud on phone. Buy… Buy… Exchange tires, cars, etc…
BUY YHOO & MSFT… WOOOOOAAAAAHHHH
people have speculated about this for a while, I think its a great move for microsoft. Hopefully between yahoo and microsoft they will come up with a decent ad platform that can actually compete with adsense
This sounds much bigger than war with iraq. If Iraqis brought Yahoo shares. Woooahahhahahaha.
Microsoft upsets Google. JUMP HIGHER… HIGHER!!!!
Someone want to tell me how this effects Zimbra? Yahoo bought Zimbra recently, and it seems that Yahoo knew that MS wanted them in this period.
The Tin Foil Hat suggests that MS decided to push harder when they saw the potential of targeting Zimbra as well (which is a growing competition to Exchange).
I haven’t invested in Zimbra yet, but I know a lot of people who are flipping out about this right now.
Woooooooooooow!! Very nicely written
What does this mean for the Maven Networks deal?
FAKE!!! Check out the date. 5:09 PM?
Friday, February 01, 2008 5:09 PM
@8… It’s time zone.
Exciting indeed…
WOW Great Move! Knock google of the Top there getting to powerful.
as Daimler-Benz wanted to grow by acquiring Chrisler, everyone said, that the to companies will help each other to grow and earn money
Aquisition will be live on stage… Bill Gates, Steve Ballmar, Jerry Yang, Nick Fildo, Terry.
I can wait for thousands camera flashes.
How is it that Steve sent this email at 5:09pm today when its just before 10am PST?
Even if their servers were based on GMT (which they are not) the time stamp still shows this email to have been sent in the future.
A fake
Hm… Will this mean that M$ will rewrite/replatform the ginormous amounts of FOSS-based stuff Yahoo! has? IIRC, Yahoo! used FreeBSD for servers and PHP for programming.
We all know what happened when M$ took over Hotmail, and how long it took them to get it working properly again, and the horrible thing it is now when compared to the good old Hotmail days.
What would happen with Zimbra, Flickr, del.icio.us and the likes? Will they be M$-ified, or are they simply going to be dropped at some point?
As much as I like to see Yahoo! survive, this is bad in my book.
Still in shock but understandable.
Uneducated people. Here the real time in Europe!!!
http://www.worl...time-europe.htm
I cant think of a bigger clash of management cultures.
If this goes through, this will prove to be one of the biggest milestones in the history of the internet evolution.
I wonder whether the Yahoo team will want to stay on board this mega-company or will want to just ship to smaller more nimble operations. So far the consensus inside Yahoo seems to be split – some are jumping ship, some are passively keeping their options open and some have no intent on leaving. I can’t wait to see this play out.
Boris
blog.bincsearch.com
I have contacted a few mid level management people at Yahoo who could be described as, ‘Yahoo Purple Lifers”. They have intimated that they will stay and work to make any cultural changes to the organization, and I quote, “as painful as possible for the new Microsoft directors and division Veeps, short of insurrection”.
I’ll try and write something up on this attitude that seems pervasive, on my blog, over the weekend. There has been plenty of bitterness over the layoff’s already.
…and I am very excited to see me on the flickr frontpage
http://flickr.c...unny/2235021280
So long Zimbra…
I just hope DOJ makes M$ spin off or sell Zimbra (IBM? Oracle? RedHat, Sun? IPO?)
Zimbra was great.
YDrive all the better — to be.
I just hope this isn’t a setback for openness/CreativeCommons…hallmarks of Yahoo. Will Microsoft take the old-school approach to copyright policies?
Is this real? The email is time stamped 5:09 pm.
YouSoft or MicroHoo
-:)
Rajan Tawate
If Microsoft is smart, and they get this thing through, they will rebrand under the Yahoo! name and redefine their company. Vista sucks. Web based apps and open source is where its going to be. This is Microsoft’s chance to right the ship and go web based and open source.
Microsoft-like thinking will kill Yahoo!, but maybe Yahoo!-like can save Microsoft.
It won’t happen though. Microsoft is going force Yahoo! into a misshapen hole.
Interesting that the time stamp has been removed from this email.
It was there an hour ago.
GMT is +0800 from PST.
Sorry people, but if Microsoft successfully acquires Yahoo, Zimbra will be a dead product. The only development work I can see Microsoft authorizing will be migration tools to Hosted Exchange.
What a difference a few years make. If this happened in 2000, the tone of all comments would be “Microsoft sucks!”. Those are still here, but more muted.
Now, I read a little more tone of…excitement? Curiosity? Google’s rise, Microsoft’s more modest online success and Yahoo’s torpor have re-arranged attitudes somewhat.
-this is a sad day for all of the believers in yahoo, since 1994-
most of us started to web surf with yahoo; but yahoo made crucial mistakes:
1. didn’t buy ebay, when they could
2. didn’t buy google, when they could
3. didn’t buy youtube, when they could
4. didn’t buy facebook when they could
5. didn’t consolidate in one powerful yahoo web2.0 platform all their properties (pretty cool individually, flickr, del.icio.us, upocoming…etc..)
this will be their destiny. yahoo will be remembered as a footnote in the history of the web, like altavista, excite, lycos…
pretty sad.
I thought the tone of the letter was interesting. It suggests/assumes the acquisition will go through as planned while all reports say things like “if” because as far as we know, only a proposal has been made. Perhaps those involved on both sides have already decided it’s a done deal, despite what’s been publicly reported so far.
You guys do not see the obvious. If this letter is real then is a testament that the deal is already done or about to be done no doubt about it. If it wasn’t 100% sure deal Ballmer would not have send this email to all of the employees.
Translated:
“If Fiorina got $1B in kickbacks with the merge of HP/Compaq, I’ll get $5B with this one, suck this lemon carly!!1!”
I think this is a big mistake. Yahoo is greatly overvalued — almost a dying brand, like AOL. Yahoo is completely lacking in innovation and still living in 1997.
This merger is a giant leap…backwards. Welcome to Web 0.9, time travelers! I LOVE the Daimler-Benz-Chrysler analogy! PERFECTOMUNDO.
Finance message boards for MS, YHOO and GOOG are going crazy with rumors and numbers. Look at boardcentral.com – they scan all major financial message boards out there and build most read lists, stock popularity indexes and even Hype barometer. It seems there is an entire subculture of message boards addicts.
Ugh. Bad idea MSFT. Bad idea Yahoo!
In a merger, you want 2 + 2 = 5
This is 2 + 2 = 3
This is something cooked up by the investment houses to get fees.
The problem is that a large bulk of Yahoo’s constituency is “legacy” users from the pre-Google days. Yahoo isn’t very good at picking up new users, except in its peripheral off-brand manifestations like Flickr.
Google has a much more solid and robust strategy for gobbling up new users on completely new platforms, like mobile. The Yahoo brand is flagging badly, and whenever most people think of Yahoo, they picture that boring, goofy red logo and grey website that screams “1997″….
Give me one example of a truly innovative or standout killer app that Yahoo has served up with since it bought Broadcast.com and that site disappeared into the black hole of Yahoo’s awful, confusing internet radio offerings.
Flickr *might* qualify as a standout service, but other than that — what is there?
Most of Yahoo’s offerings — like “Groups” — are so complicated and spam-infested, it would take a Divine Strake bomb just to unravel them and figure out where the profitability lies.
I just received this ‘letter’ in my inbox:
IMMEDIATE ATTENTION NEEDED:
HIGHLY CONFIDENTIAL
FROM: WILLIAM HENRY GATES III
DEAR SIR / MADAM,
I AM WILLIAM HENRY GATES III, AMERICAN ENTREPRENEUR, SOFTWARE EXECUTIVE, PHILANTHROPIST AND CURRENTLY SERVING AS CHAIRMAN OF SOFTWARE COMPANY MICROSOFT. THIS LETTER MIGHT SURPRISE YOU BECAUSE WE HAVE NOT MET IN PERSON NOR BY CORRESPONDENCE. I CAME TO KNOW OF YOU IN MY SEARCH FOR A RELIABLE AND REPUTABLE PERSON TO HANDLE A VERY CONFIDENTIAL BUSINESS TRANSACTION, WHICH INVOLVES THE TRANSFER OF A HUGE SUM OF MONEY TO AN ACCOUNT REQUIRING UTMOST CONFIDENCE.
I AM WRITING YOU IN ABSOLUTE CONFIDENCE PRIMARILY TO SEEK YOUR ASSISTANCE IN ACQUIRING THE AMERICAN PUBLIC CORPORATION YAHOO, A GLOBAL INTERNET SERVICES COMPANY. IT PROVIDES A RANGE OF PRODUCTS AND SERVICES INCLUDING A WEB PORTAL, A SEARCH ENGINE, YAHOO MAIL, NEWS, AND POSTING. MY PARTNERS AND I SOLICIT YOUR ASSISTANCE IN COMPLETING A TRANSACTION BEGUN BY MY COMPANY, AN AMERICAN MULTINATIONAL COMPUTER TECHNOLOGY CORPORATION WITH 79,000 EMPLOYEES IN 102 COUNTRIES AND GLOBAL ANNUAL REVENUE OF US $51.12 BILLION AS OF 2007.
IN 1996, MY COMPANY, THEN THE PERSONAL COMPUTER MARKET LEADER IN THE UNITED STATES OF AMERICA, SOUGHT TO WORK WITH THE GOOD OFFICES OF THE SUPREME COURT TO MAINTAIN AND INCREASE REVENUE SOURCES BY FIXING VARIOUS ANTI-TRUST CASES. THE ISSUE IN QUESTION WAS HOW EASY OR HARD IT WAS FOR AMERICA ONLINE USERS TO DOWNLOAD AND INSTALL NETSCAPE NAVIGATOR ONTO A WINDOWS PC. ALTHOUGH WE DID NOT SEE IT AT THE TIME, THIS INSTIGATED THE BEGINNING OF OUR DOWNFALL.
DESPITE THE COURT FINDING THAT THE REVISED PROPOSED FINAL JUDGMENT WAS IN THE PUBLIC INTEREST, WITHIN TWELVE SHORT YEARS MY COMPANY WAS LEFT FLOUNDERING BY A SERIES OF UNSUCCESSFUL VENTURES: THE FAILURE TO LAUNCH LONGHORN, THE ZUNE, WINDOWS VISTA AND MANY, MANY MORE.
DUE TO SUCCESSFUL BUSINESS DEALINGS THROUGHOUT THE 1990S MY COMPANY IS WORTH FOUR-HUNDRED-AND-ONE BILLION U.S. DOLLARS ($401,000,000,000).
MY BITTEREST ENEMY, GOOGLE, NOW REMAINS IN CONTROL OF THE INTERNET’S LUCRATIVE ADVERTISING BANNER BUSINESS.
MY COMPANY IS CALLING FOR YOUR URGENT ASSISTANCE IN FUNDING THE TAKEOVER OF YAHOO! TO ACQUIRE THE ASSETS OF THE ENTIRE INTERNET COMPANY IN ORDER SO THAT WE MAY REGAIN OUR MARKET LEADING POSITION IN BOTH ADVERTISING AND ONLINE SEARCH.
I WOULD BESEECH YOU TO ALLOW US TO TRANSFER A SUM EQUALLING $44 BILLION TO YOUR ACCOUNT TO AID IN THIS IMPORTANT VENTURE. THE NASDAQ STOCK MARKET OF THE UNITED STATES OF AMERICA WILL FUNCTION AS OUR TRUSTED INTERMEDIARY. I PROPOSE THAT WE MAKE THIS TRANSFER BEFORE MID-2008.
I KNOW THAT A TRANSACTION OF THIS MAGNITUDE WOULD MAKE ANYONE APPREHENSIVE AND WORRIED. BUT I AM ASSURING YOU THAT ALL WILL BE WELL AT THE END OF THE DAY. A BOLD STEP TAKEN SHALL NOT BE REGRETTED, I ASSURE YOU. PLEASE DO BE INFORMED THAT THIS BUSINESS TRANSACTION IS 100% LEGAL. IF YOU DO NOT WISH TO CO-OPERATE IN THIS TRANSACTION, PLEASE CONTACT OUR INTERMEDIARY REPRESENTATIVES TO FURTHER DISCUSS THE MATTER.
I PRAY THAT YOU UNDERSTAND OUR PLIGHT. MY COMPANY AND OUR COLLEAGUES WILL BE FOREVER GRATEFUL. PLEASE REPLY IN STRICT CONFIDENCE TO THE CONTACT NUMBERS BELOW.
SINCERELY WITH WARM REGARDS,
WILLIAM HENRY GATES III
Can you imagine if GE, Disney and their networks accounted for 70-80% of all TV spending and then one tried to purchase WPP and the other Omnicom? That’s essentially what is going online now and no one really seems to care.
JoeT – I only use Google to search, nothing else. MyYahoo is my home page, their email is my core email, I use YIM more than AIM, I use their sites for a number of things that Google just doesn’t do well. Google keeps trying but they seem to fall flat on anything outside of their core competency. The mining and aggregation of data and the small transactions they take from ads.
Yahoo is not a search engine, they never were! When they started they were a guide. And except for that little mistake they made buying Inktomi back in the hey day they really were more of content aggregater than data minors. I like their their sites better, their whole look and feel is better. Google’s email sucks, their maps are cool but MSFT’s are cooler. People seem to have fallen in love with Google but they have only executed well on their core competency everything else has been a lackluster failure or result of an acquisition.
So you may argue that Google is the king but I say let them have search. The more people use search the more they realize its worthless. As an advertiser on their network I get mediocre results and a lot of clickfraud and ultimately that is going to be their downfall. They are great for reaching people when someone is looking for you but for display ads they suck.
Most people i talk to have similar experiences with AdSense.
I think Ballmer is right, and the merger is a very good idea.
It will revitalise Microsoft, and help it transition as an organisation (this is about much more than the MSFT stock price!).
Microsoft has some great marketing skills in the aQuantive camp, and seems to have avoided destroying aQuantive or looking all its people. It does not have great relationship with consumers though. This is Yahoo!’s strength, as is its now very high-quality search and content matching algorithms.
Yahoo! is proving that it cannot handle the operational side as well as it should, and here it may have something to learn from Microsoft.
I think the combined group would make a very potent contribution to both advertiser choice and experience and to keeping Microsoft relevant to the world today and tomorrow.
Digital Marketing blog – YaSoft! or MicroHoo! ?
MS+YAHOO = Die alone, die together.
@12 – “Knock google of the Top there getting to powerful.” School failed you.
@43 – “Yahoo is not a search engine..” They seem to think they are in their PR, and so does MS. I too remember when they were a directory, and I used it often, but they kicked that to the curb long ago. Now I fight with Y!Groups and MyYahoo, but I rarely win. Mash is ridiculously bad. Meanwhile, iGoogle is simple and it works. “Google’s email sucks..” Hardly. Superior spam filters, capacity, speed, UI and free POP make Gmail converts very happy ’round these parts. “I use YIM more than AIM..” There’s your problem right there.
@31
That said, still, highly unlikely.
Microsoft always wonderful. Consider what they’ve done to modern day computing as we know it today. And its foundation is very solid. Will they want kill the Yahoo brand after paying $44 Billion for it? Quite unlikely. Why the need to kill the king of traffic and user loyalty? That said, never say never…
HAHAHA LMAO
calling that an “internal email” it was more like a press release..
MSFT is lame.. I hope Yang and co. don’t sell out..
What I “liked” about that “internal email” was comments like:
[quote]
Microsoft and Yahoo! *will* work together closely on the integration process to ensure that we are thoughtful about the questions we ask and the decisions we make. As we move forward, we’ll look carefully at how to bring our assets together to create the greatest value for customers, employees, and shareholders.
During this transition period, I urge you to stay focused on your commitments and team goals.
[/quote]
As if it’s already happening.
GOOGLE vs MICROSOFT…..
The war has begun….