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February 9, 2008

Microsoft’s $80 billion (and growing) Yahoo Headache

Michael Arrington

79 comments »

The buyer in any public-public merger generally sees a stock price hit - they’re offering a premium over what the market thinks the seller is worth, and the market takes that out of the buyer’s hide. But Microsoft lost nearly $40 billion in market cap in the eight trading days since they made their offer. That’s quite a penalty - and one Microsoft likely didn’t plan on dealing with.

Microsoft closed at $32.60 per share on January 31, hours before the Yahoo bid was placed. On Friday, the stock closed at $28.56, a decline of about 13% and the lowest it has been since 2006. That erased just under $38 billion in Microsoft shareholder value.

The Microsoft offer is half cash, half stock. As Microsoft’s share price declines so does the offer price for Yahoo. It may be a coincidence that the amount of market cap that has vanished is almost exactly the same as the bid amount (the two numbers converge as stockholders flee Microsoft). But coincidence or not, Microsoft has shrunk by a Yahoo in the last eight days.

Yahoo is now putting up a fight (to the delight of Silicon Valley in general, Google specifically and bloggers everywhere), and Microsoft needs to decide if they’ll bid higher or stay firm. Microsoft will get this deal if they have the stomach for it. But with the market charging Microsoft nearly $1 in market cap for every $1 they bid, the Yahoo deal is looking to be a lot more expensive than it should be. Cue a sad song from the world’s smallest violin, please. And pass the popcorn.

  • Sphere It

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Comments

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  1. Anon

    February 9th, 2008 at 8:45 pm

    The market’ll correct when Yahoo accepts.

  2. Michael Arrington

    February 9th, 2008 at 8:45 pm

    yes, but which way? :-)

  3. YDRIVE

    February 9th, 2008 at 8:48 pm

    Yahoo could put up an all-cash-only as a condition… in that case, serious buyers only 8-)

  4. Jen

    February 9th, 2008 at 8:55 pm

    MSFT’s stock should bump a bit, unless they end up paying closer to a $40 level.

    Current MSFT stock has already baked in a $31-$35 offer (now that everyone’s had some time to digest), so consummating the deal shouldn’t lower MSFT anymore…. and if deal doesn’t happen, shareholders will return since they’re sitting on crazy cash reserves (read: buyback or special dividend).

    But for MSFT’s sake, this needs to end quickly, one way or another.

  5. Isaac

    February 9th, 2008 at 9:00 pm

    Yahoo is on a course to get swallowed up. Rumors have been circulating for over a year.

    Stopping this deal would be like trying to turn the Queen Mary in a bathtub.

    The deal will be good for everyone. It will free up space for smaller players like Vclick and AOL to really take off and ultimately lead to more opportunity for everyone.

  6. Eric Locken

    February 9th, 2008 at 9:03 pm

    Good time to buy some Microsoft shares?

  7. Arie Lyundyk

    February 9th, 2008 at 9:10 pm

    On Monday when Yahoo! sends the letter that they are declining the offer, YHOO will be lower than its $18 (and change). I expect Yahoo! to be trading in the $15-17 range and in the $10 range by the summer. With this stock drop, MSFT will be able to buy YHOO on the cheap. However, MSFT is now instantly number 2 in the Internet space. Yahoo!’s customers will jump the sinking ship.

    Declining and fighting is probably their dumbest move.

    When you aren’t reading Kara and her “insider”, the truth is that most of the YHOO employees want to go to Microsoft, especially if they will be richer. For the employees, they hate Google more than they hate Microsoft and all that matters is a stock that makes them much richer than they are today. The real Yahoo! crisis is that the majority of the employees want to be as rich as Google employees and the Microsoft deal helps that. The rejection makes Yahoo! a second rate AOL and the beginning of the 3 year death begins.

    Yahoo!, well come to the dead pool.

  8. BubbleHead

    February 9th, 2008 at 9:18 pm

    As I pointed out in the last post, MSFT has lost even more value than you indicate here. The stock was trading at $35 a few days earlier when they released stellar earnings when a huge (and most would say suspicious) high volume selloff began and didn’t stop until Friday.

    It is obvious from the trading, that big holders of MSFT knew this deal was coming. I mean, come on, Goldman Sachs is advising MSFT on the deal so they obviously knew. If MSFT ups their bid to $40, I fully expect MSFT to trade down to $26 at least temporarily.

  9. BubbleHead

    February 9th, 2008 at 9:20 pm

    Arie, if YHOO goes down that far on Monday it would be a killer buying opportunity. MSFT will not give up on this deal yet.

  10. allen stern

    February 9th, 2008 at 9:26 pm

    I totally agree that the bid helped to move the stock lower. I am not 100% sure it’s the only reason - I made a chart of some other tech companies and their declines over the same period:
    http://www.centernetworks.com/.....yahoo-deal

    Looks like Baidu is off more than MS at -16% (I know its a China play) and even Apple/Google are off 8%.

    So perhaps it’s a combo of the bid plus the general market conditions? Where’s Cramer when you need him :)

  11. Ray Burt

    February 9th, 2008 at 9:40 pm

    Obviously, Microsoft expected a Yahoo denial — is there a planned 2nd phase that they were expecting and want? For example, could this be a way to distract a major competitor with no real intention of acquisition follow through?

  12. Hey, investors...I have nothing do with this.

    February 9th, 2008 at 9:41 pm

    All media companies should stay out Microsoft/Yahoo stuff this monday. Investors can do anyone. They are more powerful RIAA. They have power to sue blogger companies, expensive media, any companies who printed false light about Yahoo/Microsoft stuff.

    I’m keep off. I have nothing to with… It’s micheal and some posters.
    I’m not saything shit about Microsoft/YAhoo.

    Sue Mick, CNET, WSJ, etc…

    Because I read it correct.
    Information is provided ‘as is’ and solely for informational purposes

  13. Thinker

    February 9th, 2008 at 9:43 pm

    It’s called dilution…

  14. I'm innocent.

    February 9th, 2008 at 9:43 pm

    I’m back off…

  15. B.Ackles

    February 9th, 2008 at 9:53 pm

    Off the topic, but where is Crunchbase?

  16. Steve

    February 9th, 2008 at 9:58 pm

    #10,

    Allen, it has a lot to do with the bid (90%). Apple and Google went down because of their missed earnings/guidance. When was the last time Google missed both top line and bottom line? Microsoft had good earnings, but this Yahoo bid hammered it and it broke the $32/share resistance. It might drop to as low as $25 depending on how much they are willing to pay Yahoo. But the stock is already priced in a lot. Their operation cash flow is about $20b yearly. They can surely afford Yahoo just fine.

    A lot of people just forgot how big the company Microsoft is. It’s a huge takeover for sure, but it’s Microsoft.

  17. What went wrong

    February 9th, 2008 at 9:59 pm

    Microsoft isn’t be blame for this. If monday, Yahoo’s stock crashed like Enron… Oh man… Oh man… Oh man….

    America’s economy will get worst. worst.. worst…starting to frighten investors, CME, NYSE, Wallstreet, people & advertisers. Expect homeless people.

    Investors of yahoo is worry about mondey hit.
    Mortgage crisis, high food cost, high advertisment cost, high gas prices, high kitchen stuff. It will make economy black shadow.

    Can you at least write something good instead of popcorn.

  18. Kevin

    February 9th, 2008 at 10:03 pm

    This is about to get really, really interesting.

  19. PinkConnection.com

    February 9th, 2008 at 10:05 pm

    yahoo will be a $50 stock in three months

  20. Techcrunch is bad company

    February 9th, 2008 at 10:09 pm

    This monday… My prediction stock Goog, MSFT, Yahoo stock will mostly likey to drop very bad.

    VERY BAD.

    Interesting drama and bad bloggers & bad media pressure.

  21. @19

    February 9th, 2008 at 10:14 pm

    PinkConnection.com is not likely to happen…. Yahoo accidently brought Boardcast.com and losing millions after youtube success.

    This is why IRS will force Mark Cuban to pay $1.6 billion back to Yahoo.

  22. Anon2

    February 9th, 2008 at 10:15 pm

    I think the the comment I heard on venturebeat.com is kind of realistic. Basically search results are becoming a commodity. Are the results from Yahoo, Google, MSN, Ask, etc. that different?

    Yahoo’s problem seems to be more a marketing problem than a tech problem.

    I don’t know if anyone on this blog has used Yahoo search lately, but Yahoo search with the automatic “suggest” is actually more user friendly and much more visually pleasing than google’s. I used to use google for everything, now I find Yahoo’s suggest to be more useable because it got me to the answers much faster with less typing. Yahoo’s result page has more suggestions if you click on the little arrow.

    One thing that bugs me about google is how do you turn on google suggest. I had to google “google suggest” to find out. And there doesn’t seem to be a way to turn it on for return visits :( Why don’t you talk about stuff like that?

    IMHO, Techcrunch should try yahoo search sometime instead of blindly doing infomercials for google all the time, maybe do a taste test or something. And maybe do some real analysis as to why some kind of Yahoo marketing would fail or succeed or whatever.

    Too much bashing, more dynamic analysis of more diversified ideas would be better.

  23. @anon2

    February 9th, 2008 at 10:24 pm

    This is a blog. You want to write your own? Do it. You dont like this one? Dont read it.

    Oh yeah, what’s with 12, 14, 17, and 20? Fake non-native “english”? WTF???

  24. Steve

    February 9th, 2008 at 10:24 pm

    #22,

    Anon2, finally someone with a good point. I too like the search/suggest drop-down, esp on Yahoo Finance. You can easily search for a stock, by name or symbol. Very neat.

    They do need to get people to “yahoo it”.

  25. Techcrunch is idiot company

    February 9th, 2008 at 10:25 pm

    Techcrunch is really bad company. It’s far hurting yahoo/Microsoft/google.
    Google also owns tiny yahoo shares.

    We are glad Google jet kick out mike. Mike takes revenge against Yahoo/Microsoft/Google. He does attack them.

  26. @22

    February 9th, 2008 at 10:27 pm

    if u believe in YHOO so much, then why not tell us ur name? hiding behind an anon name?

    Scenario 1:
    YHOO search results are different from MSFT and GOOG. it’s not a marketing problem, it is a technical problem. Well, YHOO sucks.

    Scenario 2:
    YHOO search = GOOG search = MSFT search. In this case, why the heck did YHOO work on Panama, if it wasn’t a technical problem? Stupid management? Why didn’t they put that money towards marketing themselves better? Again, YHOO (i.e. its management) sucks.

    I have worked with YHOO product managers and VPs in the past. They are the most moronic bunch you can ever deal with.

    FACT: YHOO does not let you bid on “exact” keywords, only broad keywords. Google lets you do that. No, that’s asinine in my mind.

    So, the next time you tell TC or anyone else that YHOO is the same, check your facts and your logic. Oh wait, you support YHOO so we shouldn’t expect either from you! ;-)

  27. noah

    February 9th, 2008 at 10:27 pm

    ms should drop yahoo like a bad habit. not worth the time, money or trouble.

  28. Chris

    February 9th, 2008 at 10:29 pm

    did you notice how much google’s market cap got erased since microsoft’s announcement for the yahoo bid?

  29. @23

    February 9th, 2008 at 10:31 pm

    Americans can’t locate the U.S. if that’s you…

  30. @27

    February 9th, 2008 at 10:33 pm

    Noah, I seriously agree. They should take $44 B and do the following:

    a) Offer good salary increases to their current employees and those who are willing to jump ship from YHOO, who is great at wasting their talent. “Show us your option grant letter and we will pay you at $31/share” ;-)

    b) Do deals with major content providers that take Yahoo out of the picture. Yahoo is king when it comes to content and that’s pretty much it. Even that is getting more distributed every day.

    c) Buy Bebo or another social network for way cheaper than Yahoo.

    So, with (a) you get good employees and with (b) and (c), you can get users. I don’t care for Yahoo technology - it’s crap! Try using yahoo on your cell phone, it sucks and display marketing is in a bubble right now - expect a market correction after the dust settles down on all these deals.

  31. @2

    February 9th, 2008 at 10:36 pm

    Hey Michael,

    Aren’t you the pundit here who should be making predictions rather than asking us? ;-) Huh? you get paid the big bucks so show us some value dude. after all, we (through our visits and seeing your ads) pay your salary!

  32. Alaska Miller

    February 9th, 2008 at 10:48 pm

    Too many idiots here. Techcrunch sucks too!!!

  33. EH

    February 9th, 2008 at 11:05 pm

    I got yer “tiny yahoo share” right here, bub.

  34. YPloy

    February 9th, 2008 at 11:20 pm

    @30…You can’t possibly be thinking that YHOO and bebo are even remotely comparable, are you? A company that’s looking to acquire bebo has a completely different objective than a company trying to buy YHOO.

    Once again readers often resort to emotional assesments if you don’t see that Yahoo is #1 in mail, #2 in search, #1 in news (?). I believe they’re in the top 3 for personals and autos.

    And you suggest buying bebo instead? Bebo I’m sure is a great company with lots of value…but it’s apples and oranges.

  35. Kvan

    February 9th, 2008 at 11:46 pm

    fuck that 80 billion they better sell i’m a stock holder; even though i even think Yahoo isnt worth that much. For 80 billion why not buy something else or buy every startup out right now 80 billion is kinda absurd. Fuck that buy Sprint they’ll probably sell for 80 billion

  36. Hyloka

    February 9th, 2008 at 11:47 pm

    If you want to run numbers and comparisons, how about this:

    If you look at Google and Yahoo over the past 3 months, both have declined, and have followed about the same path (until the infamous “headwinds” hit Yahoo investors in the face when Yahoo announced earnings).

    For the year, since January 2nd close, Google has declined from $685 a share to $516 a share, about a 25% drop.

    Google is eating Yahoo’s lunch, so I don’t think it’s rationale to think that Yahoo’s stock would have been doing better over the year than Google’s, especially after its last earnings call.

    Yahoo closed on January 2nd at $23.72. A 25% discount on its stock would put it at $17.79.

    So, factoring in that Microsoft’s current offer for Yahoo is partially in Microsoft stock and partially in cash and that Microsoft shares closed Friday at $28.56, the current offer on the table for Yahoo comes in at $29.08, close to what Yahoo closed at on Friday.

    So, the offer on the table, right now, still represents a 63% premium on what a Yahoo share would have been worth if Microsoft had never made the offer and Yahoo’s stock followed the same trajectory as Google’s stock has on the year.

    Reports abound that Yahoo is holding out for the $40 a share that they could have got last year from Microsoft. A $40 price would represent a premium of 125% over what Yahoo’s stock would have been on Friday if it followed the Google trajectory (and come on, after the headwinds hit, how many of us really think that the investing public would have treated Yahoo the same as Google?)

    Even a price of $35 a share would represent a premium of about 97%.

    Right now, Microsoft shareholders are propping up Yahoo stock to the tune of about 61% and they probably aren’t going to be too happy to hold it up very long.

    Be real interesting if Microsoft starts playing ball like Ellison and just drops Yahoo and lets their stock price sink back down. If you’re a Yahoo shareholder, that’s got to scare you right now. Google may be interested in trying to toe the antitrust line to save the enemy that it shot if by saving that enemy it can thwart Microsoft, but I’m sure Google would be content to just let Yahoo bleed out on its own if Microsoft takes its bandages and walks away.

  37. @30

    February 10th, 2008 at 12:23 am

    totally agree with you. ms should stick to its successful core businesses, buy nothing in excess of $5B and leave jerry to face headwinds (and shareholder suits) for the next 100 days. In another 100 days, y will be begging for $19.

  38. Web Browsers

    February 10th, 2008 at 1:09 am

    I think you meant Microsoft shares went down, instead of “Microsoft lost”, since no one took money from their pocket.

  39. Red devil

    February 10th, 2008 at 1:20 am

    half of the fanatics here I think are msft employees trying to gorge up yahoo

  40. It might be time to rethink...

    February 10th, 2008 at 1:21 am

    Microsoft stock has plummeted because Microsoft Shareholders don’t like this deal. If this keeps up, it will be those shareholders rising up to hold MSFT’s board and CEO accountable for a scheme that wipes out their entire cashpile, puts them into debt, and wipes out 80 billion from their market cap. All this to realize 1 billion in cost savings? Ballmer — that’s nuts.

    What’s interesting is that Yahoo’s board and Execs are standing firm together, and this past week, big announcements rolled out from Zimbra, Yahoo Music, Yahoo Live, etc. It seems like Yahoo is waking up again… maybe Jerry and Sue will finally deliver that vision that shareholders have been waiting for. :)

  41. Everett

    February 10th, 2008 at 1:21 am

    Goog should come in and just snap it up already ;)

  42. Zorba

    February 10th, 2008 at 1:33 am

    Yahoo have had more then enough time to try get more value out of their assets, but they could not and that’s why the stock was at $19 and heading south. They are silly to reject the MSFT offer.
    On Monday, Yahoo’s stock will drop below $19 and then maybe MSFT can get them for an even cheaper price…….
    Bad decision to reject the bid by yahoo for shareholders and employees alike. Are they too proud to be acquired by a huge software giant that has managed to weather the markets and competitors for 35 (?) odd years……..
    Yahoo can learn a thing or 2 from MSFT, but looks like they want to join GOOG and continue to miss earnings (the post on search becoming a commodity was spot on)

  43. Wes Bowling

    February 10th, 2008 at 2:13 am

    Uhhhhh this was a dumb article. Lots of stocks corrected around that time. Heck look at google correction.

  44. Jack

    February 10th, 2008 at 2:24 am

    The whole market is down this past week. The Nasdaq lost 11% - I hardly think the entire Yahoo deal is to blame.. http://finance.google.com/fina.....amp;q=NDAQ

  45. joan

    February 10th, 2008 at 2:44 am

    Search is nowhere near where it should be.
    And the internet is nowhere near where it will be in 20 years.
    So why buy Yahoo?
    Because Microsoft thinks they can’t take on Google without Yahoo?
    It’s ridiculous.
    It won’t improve the search results, it won’t help the users.
    Instead of buying Yahoo they should open up search, allow developers to improve the search results, to thinker with the algorythm, and I bet you will cause Google a headache worth more than $ 80 billion because the developers will make it better and where does that leave Google?

  46. Darren Stuart

    February 10th, 2008 at 2:47 am

    I bet there are some real annoyed investors that bought yahoo stock because of the sale and now are going to end up with a 15 buck share price when MS tells them to get lost.

  47. Andy Gongea

    February 10th, 2008 at 2:50 am

    How about leaving Yahoo in pain, and building some new networks with that money.

  48. 福泉市

    February 10th, 2008 at 4:09 am

    收购不是问题，整合才是问题。

  49. Per Eriksson

    February 10th, 2008 at 4:25 am

    Great post, good summary of how its going down.

  50. jim

    February 10th, 2008 at 4:41 am

    As the dust is starting to settle this deal does not feel right for microsoft and for yahoo. it seems like oil and water. even if microsoft completes this transaction it would be very difficult to digest for them from a product and services standpoint as well as a financial standpoint.

  51. Cee-tee

    February 10th, 2008 at 5:39 am

    Hi! I am Cee-tee Punzalan from the University of Asia and the Pacific in the Philippines. I would like to request if you can support our cause to help poor kids get a good education. Is it possible if you can link our blog -http://kchanneluap.blogspot.com in your site. Thanks!Hope you could support us.

  52. Ray Burt

    February 10th, 2008 at 5:44 am

    google results have really declined in quality recently

    the world needs a good search engine — one that gives people the results they want

    any ideas out there?

  53. Vlad Mazek

    February 10th, 2008 at 6:14 am

    I’d like to propose a different way to look at this.

    Microsoft makes actual money selling actual software licensing and their market multiple is 16x the earnings.

    By comparison, Yahoo multiple is close to 70x with Google’s close to 40x. If you ask me, Yahoo just cemented its price per share at $30 and going forward is nothing if a going concern. Company with a temp CEO, that has no plan for the future, that is being crushed by Google.

    The market overcompensates Google and Yahoo for what they might be one day. With Yahoo being weaker every day, cutting staff, emerging Web 2.0 products that will replace its mediocre portal technology, would you as a developer want anything to do with their platform or would you as a customer ever consider purchasing their software (Zimbra) or would you ever take a job at a company whose stock price will be going anywhere but up or would you trust your lifetime of pictures to Flickr if you knew this company is about to go the path of Excite, Altavista, AOL..

    Suicidal yelp just turned into the fifth largest newspaper in your town that the main paper bundles in with the “extended reach” package - “Hey, for $5 more we can put this ad in the 10 other local community newspaper”

    I say we rename “Yahoo!” to “Yahoo?”

    -Vlad

  54. /pd

    February 10th, 2008 at 6:56 am

    Buy Put at 25 or 20 and call at 35….

    markets should open at about $30 for YHOO

    tues latest, MSFT will up its bid by perhaps $2-$3 dollars.

  55. iguide

    February 10th, 2008 at 7:29 am

    What’s the deal between Yahoo and Microsoft?

  56. shams

    February 10th, 2008 at 7:41 am

    @48, English please :-) .

  57. Jan Furling

    February 10th, 2008 at 7:42 am

    Yahoo has it on their home page that they will spurn Microsoft’s bid
    http://biz.yahoo.com/ap/080210…..yahoo.html

  58. whoopie

    February 10th, 2008 at 8:19 am

    great coverage of this here so far. the canonical deal here remains as it always has: if shareholders want the deal and ballmer wants the deal, yang and the board can only delay it, not prevent it. jerry, the execs, and the board might as well up the stakes - if a sale goes through, they are all finished. they must see the writing on the wall, they just want to make sure they go out with a bang. the issue here is if shareholders run them out before ballmer does. win-win here for google, all this drama is upsetting the culture of yahoo…yang can’t stretch this drama out indefinitely.

  59. Dheeraj Sultanian

    February 10th, 2008 at 8:43 am

    Too many techies…no finance people:

    A. When a stock goes down the company doesn’t loose or spend that money, it just goes to money heaven. Claiming otherwise is stupid.

    B. Why the H would MS raise its bid? There is nobody bidding against them. So lets say Yahoo instead gets into a search deal with Google (only alternative) - Google would have the justice department all over it and all of a sudden loose its warm fuzzy feeling look and turn into an Orwellian bad guy - and since Search is the only money maker at Google, crap! MS wins!

    C. The synergies with MS/Yahoo combo are great, and although everyone says the cultures are different, Money is still green even if you work at Yahoo or Microsoft.

    MS is going to get the deal done, because they have something that yahoo doesn’t have: TIME. Google’s market share worldwide is stagnant or slightly shrinking. MS has massive cashflows ~ $20-$25B per year. Yang, for god’s sake - take the DEAL

    http://www.infosupply.com

  60. WiredMike

    February 10th, 2008 at 8:49 am

    MSFT could do quite a bit with $40billion…They could afford to hire the best of the best, invest heavily in new products, services and spend a ton on marketing to increase marker share, all for a fraction of what they would spend on acquiring Yahoo! They could acquire several other companies for much less, they already have many of the things Yahoo! has already…it seems that it’s really about eyeballs…

    Hotmail / Yahoo! Email
    Live Search / Yahoo.Com Search
    News / News
    On and on…

    Yahoo! offers only a few things MSFT doesn’t already have with MSN and I think $40b could be much better spent teaming up and/or acquiring a few other companies, hiring top talent and beefing up marketing and product development.

    Mike

  61. David Blomstrom

    February 10th, 2008 at 9:19 am

    LOL - The prospect of Microsoft and Yahoo destroying each other is absolutely inspirational. Yes, Google needs competition, but let it be classy competition…something similar to Apple, or…well, Google!

    Bill Gates, if you’re reading this: I hope you’re Yahoo adventure ruins you, you global prick.

    P.S. The website I referenced isn’t online yet, but it should be in a few days. I’m sure Bill Gates will enjoy it. :)

  62. John

    February 10th, 2008 at 9:23 am

    In case anyone is interested, I have dissected the poison pill and offer a plain English explanation here: http://www.johnriccardi.com/bl.....n-english/

  63. Steve

    February 10th, 2008 at 9:53 am

    #61,

    Also note that a poison pill has rarely actually been triggered. As the matter of fact, I don’t know the last time that happened. What happened was, many times the target companies *adopted* the poison pill plan. When that happens, the bidder would either raise its bid or run far away.

  64. Penny Gould

    February 10th, 2008 at 10:40 am

    Money Money Money - That’s not my focus. I actually try very hard to use Yahoo! products, Local Listings and Free Websites. I have found that using these 2 products, which should be easy entry level people friendly products - to be excruciatingly difficult. I welcome anyone, including my local junior college - to take over Yahoo! My impression on Yahoo! as it is now - they took a bunch of programmers, led them blindfolded down a hallway, stuck them each in a different room without windows, phones, or access to the other programmers, and gave them the user requirements to build a piece of the functinality. They all turned in their products, never to be seen or heard from again. A different team, perhaps an alien, then integrated the functions, not very well….. the folks at Yahoo! may hate Google, but do the ever use the Google site for Business Solutions? It’s a breeze! Uncluttered, easy to use, easy to follow, with lots of good educational info. Politics aside, money grubbing speculation aside, Yahoo! needs to improve. Whether they do it themselves, or it gets done for them - THAT is the question!

  65. Anon2

    February 10th, 2008 at 10:41 am

    Yahoo is not a bad company. It is a pretty good company in a slump. It can turn it around.

    MSFT isn’t stupid. They don’t buy crap companies. To all the Yahoo haters, do you really think MSFT would blow more than half their life savings on crap?! Get real.

    Yahoo clearly has something neither Google, MSFT nor AOL has been able to accomplish despite their best efforts over the last few years (which is ages in web time). They are #1, 2 or 3 in many key areas. Clearly YHOO is not the crap you all say they are.

    I share @52’s opinion. Google search results aren’t as good as the hype. The results IMHO are becoming a commodity (@22). You never seem to hear this from TC or the media. The media isn’t really doing its job of informing the consumer.

  66. Tech4um.com - Tech Forum

    February 10th, 2008 at 11:47 am

    I hope neither Microsoft nor Google purchases them. Honestly, Microsoft needs to stop buying their competition and come up with ideas of their own, and Google needs to stop becoming more and more like Microsoft (i.e. buying doubleclick)

    The less the competitors, the more we suffer

  67. PaperMoon

    February 10th, 2008 at 1:04 pm

    Michael,

    I’ve given you and your writers grief in comments in the past, for some lousy posts, and I wanted to apologize.

    Your comments about Yahoo’s upcoming layoffs inspired me to buy their stock, and benefit from this bid. Can’t beat the free money… I think I owe ya!

    I really don’t think Yahoo will plummet tomorrow. If it does, I’m buying more! Microsoft will win this if they want it, and I’m sure nothing has happened that hasn’t been anticipated. Doesn’t it always go this way? Big company bids. Little company’s stock jumps, big company’s stock falls. Little company turns down the bid. Big company bids more.

    I see Yahoo’s rejection of the offer as an indication that it’s negotiating. Which means that the $20 stock that I bought will soon be worth $35. If it goes to $15, I’ll buy another 2000 shares. Because it WILL go to $35.

    Thanks for the tip. Got any more?

  68. wonky

    February 10th, 2008 at 4:24 pm

    All these are just speculations of no basis. You don’t know any better than joe next door. Everyone just turned up to be “experts” suddenly and more than half of you do even know what’s going on. Reading newspapers, online articles or blogs won’t get you anything more than speculations on their part.

    The context of what most of you relate to is search with GOOG being the 900 pound gorilla and affecting YHOO MSFT etc etc. Since when was MSFT’s key earnings is search?? How many properties do YHOO have outside of search?? Do any of you guys know anything beyond what’s happening in USA? Have a peek at Asia, I don’t know the exact numbers but the chinese population certainly outnumbered the other countries and go ask anyone in Taiwan, Korea or China… many would define internet as YHOO.

    If I’m working in MSFT’s ad services, online component… I will be worried at the moment because the bid basically says, what we have in MSN/Live is pretty much crap. It certainly raises questions about their confidence in their own department.

    The last bit is my speculation but the rest are just facts

  69. Scott

    February 10th, 2008 at 9:10 pm

    I think Yahoo’s search results are better, right now, than Google’s. Part of this is simply because SEO people don’t target and try to game Yahoo as much, and part is that Yahoo’s results are not as filtered as Google’s (because Google needs to be hyper aggressive in keeping out the spammers).

    But when you don’t have the traction, you need to be three times as good before anybody notices.

    It would be useful if someone came up with a somewhat objective test of search quality. In the pre-internet days there were standardized databases you could use, where humans would choose the best results by hand to compare to the search engine’s results. I think the details of such a test would need to be either kept secret or changed between tests to avoid gaming.

    I was involved in a search engine years ago that got some good press simply because we studied up on various journalists’ prior articles, and then hardcoded in good results for their pet search terms into our engine.

  70. Muddabir SEO

    February 11th, 2008 at 12:08 am

    Hmm Its good looks nice to me.
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    Muddabir
    http://www.xoerts.net.pk

  71. b2b_dna

    February 11th, 2008 at 3:37 pm

    Still no finance people here yet, and it’s complicated stuff, but here’s the way risk arbitrage works when a deal is announced:

    Microsoft announces they buy Yahoo! at a premium, and the details in terms of cash and stock are announced. If the deal eventually goes through, the cheapest way at that moment to obtain a given share of Microsoft is to own Yahoo! shares and get the Microsoft share upon the consumation of the merger.

    Knowing this, the arbitragers jump in with billions in trading capital and place trades where they simultaneously go long (buy) Yahoo! and go short (borrow then sell) Microsoft. By doing this, they guarantee themselves a riskless spread. In other words, they’ve sold $30-ish Microsoft shares through their short sale and bought $25-ish Microsoft shares through their purchase of Yahoo!

    These trades can lose money if the deal fails to go through. The spread between the implied price of a share of Microsoft obtained by owning Yahoo! and the current price of a Microsoft share reflects the market’s estimate of the probability the deal succeeds. Little spread means the market thinks the deal goes through. A remaining spread means the market is discounting the probability of the deal.

    Microsoft’s stock has thus been the subject of intense short selling since the deal was announced. These short sales can occur regardless of whether any holder of Microsoft actually sells shares, since the shares sold short are borrowed through securities lending programs run by major custodians like State Street Bank.

    This is utterly normal and indicates little about whether Microsoft’s shareholders “like the deal.”

  72. Leigh

    February 13th, 2008 at 1:14 am

    I think Google should make a bid. :)

  73. Leyton Jay

    February 13th, 2008 at 6:13 am

    Microsoft / Yahoo! is a shotgun marriage and Google’s holding the shotgun.

    Yahoo have some good ideas but their web searching is poor, it lacks the power of Google and Microsoft are a threat to the freedom, inventiveness and openness that the internet stands for.

    What Google has done in bringing the internet to people for free, Microsoft seek to undo for profit.

    My name is Leyton Jay. But people always spell it wrong, they spell it Layton Jay. Recently I added this mis-spelling to my website meta description to try and show up in results for the mispelling. On Google I got nowhere because it knows the mispelling doesnt appear in my actual content, it knows thats not my name.

    Yahoo! on the other hand swallowed it hook line and sinker. It’s search algorithms just accepted the meta description at face value and my site comes out top for that search.

    This shows that Google have spend time and money bringing us honest, representative results. Yahoo! either unwilling or unable to spend the time and money on their algorithms just believed me at face value.

    Since Microsoft made the offer Google have stepped up their crawling, for months Google accounted for around 60%-62% on my site’s non-human traffic. As soon as the offer was announced it began to rise and its now around 82%, leaving both MSN and Yahoo! for dust.

    Check out my live stats –> http://www.leytonjay.co.uk/statistics/

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