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April 30, 2008

Microsoft Says They’ll Pay More

Michael Arrington

31 comments »

Microsoft is leaking that they are willing to increase their Yahoo bid to as much as $33 per share, up from the original $31/share offer. That original offer, which included payment in Microsoft stock, has fallen in value to just $29.12/share.

This is a surprise since Microsoft has previously stated they wouldn’t increase their bid. Analysts largely expected them to either walk from the deal or go hostile.

$33 may not be enough to get Yahoo to move the knife away from their nose, however. The WSJ says they want $35 - $37.

The people say that it’s unclear what final approach Microsoft will take, but that discussions between the two companies have been stymied by a stark divide on price. Microsoft has said privately in recent days that it’s willing to offer as much as $32 or $33 a share, well above the $29.12-a-share value of its original cash-and-stock offer as of Tuesday’s market close, these people say. But major Yahoo shareholders have signaled they want in the range of $35 to $37 a share, with Yahoo’s management and board similarly shooting for an offer in the upper $30s, they add.

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This entry was posted on Wednesday, April 30th, 2008 at 2:40 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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Comments

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  1. Nick

    April 30th, 2008 at 2:41 pm

    One has to wonder if the $33 number is still tied to the MSFT stock price. If so the market will reduce it to $31.

  2. paintless dent repair tools

    April 30th, 2008 at 2:48 pm

    @Nick I think half the $33 is tied to it, cause its a 50/50 deal.

  3. Andy Gongea

    April 30th, 2008 at 2:49 pm

    Interesting. Let’s see how much will it take to close the deal. Who knows… maybe Yahoo really wants to be independent.

  4. Carl Starrett

    April 30th, 2008 at 2:50 pm

    I still wish Microsoft would go away. The Vistazation of Yahoo would be very bad for my business.

  5. Your Daddy

    April 30th, 2008 at 2:50 pm

    I guess they realize a hostile take over is useless if everyone leaves afterwards. Its not like the old school Gordon Gecko deals. BTW, Blue Horse Shoe Loves Anacot Steel!

  6. Chris W.

    April 30th, 2008 at 2:57 pm

    Come on Yahoos, take the deal. You’re taking up some major TechCrunch real estate every day with this drama. It’s turning into the Yankees-Red Sox coverage by ESPN, like they’re the only baseball teams in the WORLD.

  7. Mogilny

    April 30th, 2008 at 3:14 pm

    This drama reminds me of a Russell Peters joke. This is what Mr. Ballmer gets for doing business with Mr. Yang

    Here is the link,

    http://youtube.com/watch?v=-qtrAMK7_Qk

    warning, the joke is a bit racial.

  8. Jared

    April 30th, 2008 at 3:15 pm

    Why not an IAC (Ask.com) and AOL/TimeWarner proposition? There was just an article about AOL more efficiently monetizing pages it owns and Yahoo has lots of extra inventory.

    IAC is the 4th largest buyer of online advertising in the U.S. (Nielsen Online AdRelevance, Jan 08)

    Clearly there would be operational efficiencies from an IAC/AOL/Yahoo. It would be the online media behemoth to Google’s search behemoth.

    Finally, a 3 year strategic partnership with Microsoft on search. Rolled up that is a ~30% market share for MS to work with.

  9. Jerry Yang

    April 30th, 2008 at 3:25 pm

    Dam.. I don’t wanna sell to evil microsoft.

  10. rc

    April 30th, 2008 at 3:31 pm

    Come on, take the deal or leave it.

    rc

    trading tennis blog

  11. Alex

    April 30th, 2008 at 3:32 pm

    @Jared - valid points

  12. Alan Wilensky

    April 30th, 2008 at 3:41 pm

    This rumor just sets up the scenario for Microsoft to walk away from the deal after yahoo balks. As if the company can’t find out what to do with the 20 billion in cash that the transaction would incur. It’s ridiculous. You can launch an empire with that money, acquire willing victims, rather than boat anchors that are so unwilling.

    Forget the stock part of the transaction - the cash man, the cash…what are these guys thinking…? Make your existing and underperforming on-line channels work, throw a minicule amount of that cake at it.

    Gawd. What an uninspiring story…Where is the creativity? Is this what the best minds in Redmond can come up with? It’s as if they fell ass backwards into the money and don’t know what to do.

    Meanwhile, back at the ranch, yahoo should hold out and continue to quietly work on their ubiquity platform.

  13. Joe

    April 30th, 2008 at 3:43 pm

    Jeez Come on Steve, Leave yahoo alone, Don’t waste your money on a has been web property.

    I think that Bill needs to have a word with you, Otherwise Yang must be smoking the same crack that you like to inhale.

  14. Gopinath

    April 30th, 2008 at 3:54 pm

    Microsoft digging its own burial ground…

  15. yt

    April 30th, 2008 at 4:32 pm

    Be Patient Mr. Softy,

    Mr. Yang and the gang know a good thing. Didn’t the tortoise win the race without a big club?

  16. Fabian Schonholz

    April 30th, 2008 at 4:52 pm

    I still think Yahoo should remain independent and revitalize their technology. It is really silly to think that the sum of the parts will present an increased front. Yahoo, with the “right direction” could be a real competitor to Google.

  17. Wade

    April 30th, 2008 at 6:03 pm

    Fools ! Now they’ll want $40.

  18. DT

    April 30th, 2008 at 6:07 pm

    Yahoo is doing really well recently and have made good contribution to the world. People who want the deal must be thinking more about their stock than the benefit of public.

  19. lawrence

    April 30th, 2008 at 6:18 pm

    lol - MS wants Yahoo. they made that clear from the get-go

    3 weeks from now, MS will probably rise their 33/share price to 35, if Yahoo demands it

  20. YDRIVE

    April 30th, 2008 at 7:13 pm

    Nice win win…

  21. chance

    April 30th, 2008 at 7:52 pm

    My thinking is that if Yahoo is going down, they will take MS down with it. Jerry will up the price so that MS will lose even after the merger. There is so much distrust of MS from the valley that this will be the downfall of MS and they will cheer when it crashes.

  22. Que from Crested Butte

    April 30th, 2008 at 7:55 pm

    @Jared - Good thought but Barry and IAC are a little tied up right now or they would be in the hunt I am sure.

  23. 9ice

    May 1st, 2008 at 2:17 am

    Can’t they just forget about the deal. I love the internet as it is right now. And I don’t want yahoo to start neglecting standards like our dear ….

  24. fer

    May 1st, 2008 at 6:27 am

    Pagarle más!

  25. jro

    May 1st, 2008 at 9:01 am

    This is a lose-lose proposition. Yahoo continues to hold out, but everyone thinks the acquisition is inevitable, so the talented folks are leaving Yahoo in droves (so says a colleague.) MS may have to go hostile, and the i-hate-microsoft-because-i-have-to-hate-someone crowd just makes the rest of the yahoos jump ship.

    For everyone who wants to see Yahoo go it alone: won’t they being doing so without the talented folks?

    Everyone is losing in this affair.

  26. Ealeal

    May 1st, 2008 at 12:01 pm

    I guess Microsoft still needs that reminder on allowing one’s mouth to write a check that one’s ass can’t cash… Wasn’t that a strict promise that they wouldn’t pay another red cent for Yahoo just a minute ago?

    Honestly, I’m hoping they close just so we have something fresh to read about.

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