Summary Of Today’s News: Negotiations between Yahoo and Microsoft, widely expected to result in a negotiated deal by Monday, fell apart today. There were a number of statements, all summarized below. Steve Gillmor also convened a special session of the Gillmor Gang at 7 pm to analyze the news - The transcript is still being created, but the recording is now up and live.
Listen to the special Microsoft/Yahoo Gillmor Gang here, with participation from Steve Gillmor, Michael Arrington, Doc Searls, Dan Farber, Dana Gardner, Robert Anderson, and Robert Scoble.
Today’s News (chronological):
- Breaking: Microsoft Withdraws Yahoo Bid; Walks Away From Deal: Microsoft withdraws their February 1 offer, won’t go above $33/share and Yahoo wants $37. The post also includes a letter from Microsoft CEO Steve Ballmer to Yahoo CEO Jerry Yang delivered today.
- Email From Steve Ballmer To All Microsoft Employees: Leaked email from Steve Ballmer to all Microsoft employees that we got our hands on. He explains the deal news to the troops.
- Yahoo’s Tough Week Ahead: Yahoo faces a bleak world next week; look for the stock price to tank. Do they have a backup deal with Google?
- Yahoo Responds: “The distraction of Microsoft’s unsolicited proposal now behind us”: Yahoo issues a press release suggesting relief that the pesky Microsoft distraction is behind them.
- Optionally, skip all the above and just read CNET’s cartoon summary of today’s happenings:
See all
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I just looked at the april archive to try to find the post about the analyst who was closest to the deal and sure it was going to happen and boy do you guys blog a lot. Anyhow, he was wrong as so many others were. It’s too bad too, as both companies are in trouble in the long run, they should have made it happen….
doeboy - yep, you are totally right. Here’s the link:
http://www.techcrunch.com/2008.....oftgoogle/
Here is an interesting scenario - could msft have released this on Sat, so that the thought of a yhoo stock crater on monday gets all the instituions to call yhoo directors and DEMAND that they take $33 before market open? My thinking is that this gives a full day on Sunday for everyone to simmer and get some action occuring. Although this may not been the case, as MSFT could of done an exploding offer so perhaps they really do feel that there is an impasse.
As for MSFT itself, this non-buyout is not going to be good as everyone thinks. Yeah the stock will bounce big on monday, but effectively their search initative is dead. With Yhoo certain to go to goog for search, no advertisiers will bother with the effort to use msft search. Regulatory issue will be a non-issue if they proceed with the open bidding system where MSFT can be part of as well (which we all know they will not be able to as their bid density is marginal). So the bottom line is that for advertisers why waste the time and effort to use MSFT search when you can just use ONE system Adwords and garner 80%+ inventory of search. Inevitable, the lack of a buyout has effectivly only strengthen goog and will be the downfall of both msft and yhoo when it comes to search.
Finally, I think that this will push yhoo to join up with AOL which might actually be a really good combination the more i think of it. yhoo/aol would essentially own the display advertising market and goog would own the search market. The ironic thing is MSFT would be the odd person out.
It would have been a PR nightmare for Microsoft to aggressively go thru with this.
But NOW will Google step in? - if that would bring a PR nightmare (because of monopolization accusations ) - Will AOL stop in or will New.com step in and attempt to Yahoo into a political appendage for Murdoch.
The mystery is too much to bear - TOO MUCH to bear
What will happen to Yahoo search?
I am not convinced that this was the way to go for yahoo. Maybe not a good deal for MS either way but Yahoo should have taken the deal in my opinion.
Yahoo’s incompetence is nothing less than staggering, both as an advertising platform business and as a corporate management culture that should be focused on maximizing shareholder value. Does anyone outside Yahoo give the slightest credibility to statements from Yang?
Good for Yahoo!, good for Microsoft.
They both live like trust fund kids - making mistakes, no sense of urgency, certain that they can rest on their laurels. And they won’t be competitive until they feel desperate.
Only Microsoft’s trust fund is truly large, thanks to its monopolies in OS and Office apps. Sure, both of these monopolies are threatened, but it will take a while until they stop throwing off more cash than Redmond knows what do do with, and until then MS online properties will lose money and users.
Had they combined, Yahoo! would have stayed asleep until Microsoft’s trust fun went dry. Alone, they will feel desperation earlier, may have a chance to wake up and compete. It may not, of course, but joining with Microsoft would only have made Yahoo!’s decline more certain.
So Microsoft saves itself $40+ billion of investment that it would only have squandered. And Yahoo! keeps alive its chances to succeed.
Congratulations to both of them.
One word:
Crackheads
Jerry Yang is totally clueless. I predict YHOO closes tomorrow at $23 per share. Lots of hedge funds are going to get it up their arses tomorrow and Jerry Yang is going to find himself hated by a lot of investors, big and small.
so we read that Google could step in… ok. But what about all the brands… Could some brands be acquired, separately, now?
Good riddace. Glad that microsoft walked away from yahoo. Too bad for yahoo though. Poor guy Yang. I hope he has a bunker built for himself somewhere. All the shareholders are going to come after him next week.
Hey and I’m looking for Mr. Mark Mahaney. If you find him, please ask him to contact me. I need someone to teach me how to make baseless predictions.
I couldn’t find him. May be he went hiding with Mr. Yang in his bunker
Does anyone truly benefit if Yahoo’s stock tanks??
I sincerely don’t know, so I’m asking if anyone does know.
Would MSFT do this, back out, and make Yahoo’s stock tank?? Would it help MSFT to tank Yahoo’s stock?
I don’t think they’re evil, but binness is binness…
Yahoo should fire all the US employees and outsource the jobs to India.
@12
Yahoo insisted that the MS deal was under valued. Now the gets to decide. Microsoft may be able to pick up the pieces of Yahoo’s shattered image and management team much cheaper now, if the stock tanks. That will leave a cheaper deal, plus a much weaker team at Yahoo for Microsoft to deal with.
It is down the hill for Yahoo now!!!
Here’s the summary:
Arrington is really jealous of Google, if that makes sense. I guess it comes down to a concern over how much revenue TC can earn with an ad-hoc monopoly in advertising (Google). Or maybe the smug googlers in the valley; whatever ,the bias is abundantly clear. Big facebook and yahoo fan, fairly anti-google, why? Personal interest is all I can come up with….
Well, the result is against most people’s expectation. But rethink about the different corporate cultural backgrounds the two companies have, it is not hard to realize this possible outcome. Sounds a hindsight? Yes, it is.
Ballmer ’s hardball playing at the beginning and “microsofteded ” its position to sweeten the deal to $33 later and finally gave all up, all proved that Mallmer was not a good deal maker and might have taken a myopic view.
Was it due to his personality or due to culture issue? Maybe both. MSFT shareholders may take a deep release for the short while YHOO’s may take a hit. But Keep in mind, the market is to reflect a company’s long term value instead of the short eventually.
While Ballmer said MSFT can go forward without YHOO, I hope he is right or he may have made a big strategic mistake by walking away as time waits for no one.
Yes they should make it happen, good for all.
Good stuff, I couldn’t handle the thought of Flickr being owned by the same company that created Windows.
Thank goodness, If there was ever a titanic mistake to be made by Balmer, it would have been to purchase a declining Internet portal like Yahoo.
Yang can no go back to his crack pipe.
Thank goodness, If there was ever a titanic mistake to be made by Balmer, it would have been to purchase a declining Internet portal like Yahoo.
Yang can now go back to his crack pipe.
Whoops
Next steps for Microsoft:
1. Offer $1M packages for the top Google and Yahoo engineers to move to Redmond (minimum 3 years). They could hire that way 1-2k engineers that they urgently need at a fraction of the Yahoo cost. Will also severely screw Goog and Yhoo which won’t be able to match.
2. Rebrand Windows Live + Search. You don’t hear about MICROSOFT Xbox, right? Invent a brand users could relate to.
3. Throw $5B in worldwide marketing around the newly branded Hotmail/Messenger/Search products.
4. Purchase a few cool startups just so people can start liking MS. a-la Twitter and FriendsFeed.
5. Invest some $100M in lobbying against Google in Wash D.C. It’s high time they’re declared a monopoly so they stop acquiring any web company.
6. Keep the change ($45B - ~$10B = $35B in the bank) or give some bonuses to employees.
How about MS just parks that money $45B into 5% yearly investment? That comes out to $2.5B a year. Way more than Yahoo will ever make.
so what will you do? buy or sell of yahoo’s stock?
Jerry’s ass is in biiiiiig trouble.
Google does not need Yahoo. It has its own niche and a lot of cash to make it bigger. What does Yaho offer? A huge user base and that’s it… However, Yahoo users use Google for search anyway, so what’s the point of acquiring Yahoo? Google already has access to its users…
Cheers.
Microsoft valued Facebook $15 B with about 40 (?) million fast growing users. Yahoo can open its platform [with lot more users] to developers in Facebook-style API. if they can execute that strategy effectively, it is valuation will be well above what MSFT is offering.
Also, Yahoo [Panama] has just implemented Google-type minimum bid for keywords that can hugely improve the bottom-line [with the assumption that advertisers are not too pissed off by the move for the added expense and complexities to the bid management].
Good luck Yahoo!
Subhankar Ray
amateur night at the apollo. hilarious.
Interesting in Steve Ballmer’s email- this is all about Internet Advertising in Search, Display & Video. With aQuantive purchase MS starts to get in the Agency game. With Yahoo, it would have got in the Search, Display & Video game, and seriously increased its position in Search Ads.
If MS does not go through, it will look at other Advertising companies, Ad Networks and Ad Platforms. Most of Google Search Ads run on publisher sites- not on Google.com, so MS is missing a publisher Ads solution.
I would add other Ad Companies, like AOL bought Ad.com, Cox bought Adify.com, and Yahoo bought Blue Lithium, Google bought DoubleClick. Other companies like Facebook with 36M Users at 15B may be too expensive, but could buy Vertical Networks like Glam.com with 35M users across publishers for display ads, and other Ad Platforms like OpenX for text ads, small startup but could be interesting.
Yang blew it - and besides, spending 44B for Yahoo seems kind of ridiculous.
I’m sure MS could use that money betterly on their own efforts.
I knew M$ would quit. No balls to throw away $20B and get nothing.
It was all a plot to destroy #2 and clear the field to a face-to-face gauntlet with Google.
Expect some heavy press against Yahoo sponsored by M$, but we all know who is the real loser here: M$
Wow, all this about a fight to be on the list of “the best of the rest”. It’s pathetic.
Why is it that the numbers look the way they do? Microsoft can only bank on $30B in its desktop software market vs. a potential market of $300B in online ad revenue? I draw your attention to the fact that the desktop IS Microsoft’s market. The online ad space is dynamic and subject to disruptive influences (Facebook anyone). The 10 to 1 ratio is as a result of Microsoft choking on their own vomit and Google bringing home the bacon (for now).
The desktop could be revenue relevant for the long term if Microsoft would offer up products that consumers and CIO’s felt compelled to buy not compelled to avoid.
The fallout? Yahoo got screwed, Google goes on, Microsoft fragments in ever increasingly stupid ways, and Apple has an even better claim for the hearts and minds of desktop consumers…
Yupiee! My prediction turned out to be right!! Microsoft walks away!!
Sorry I wasn’t there for all this action for a while. But, its a great news for the web…. Yahoo will surely flourish in 1-2 years.
Just sighed into my boring ass Yahoo mail, my boring ass Hotmail, and my bring ass gmail
That’s great news!
Now, MS could get focused on finishing Vista
Great posts and update on the status of talks. Another strike against “old media.” CNBC’s Faber was assuring us that there would be no decision this weekend. Perhaps because they wouldn’t be able to tell us. The CNBC site is dead about the deal, just regurgitation wire stories. Thank you for Techcrunch and Henry Blodget.
What a crazy outcome. Why didn’t Ballmer and Yang have this conversation two weeks ago–or longer?
Yahoo’s stock will plunge, and because of Yang and board’s arrogance and naiveté, the shareholders will get bludgeoned. If no other company offered a better alternative, how is it possible the board could turn down Microsoft.
I agree with Blodget, that the merger would have been a complete disaster. The Yahoo workers didn’t want to be acquired, and would have fought everything along the way.
Where does this leave Ballmer & Microsoft? As Mr. Schonfeld points out, Ballmer wagered almost everything on this deal. I don’t see how to losers in search add up to one Google killer.
I can’t wait to see.
Thanks again Techcrunch!
Does this mean Google is going to take over the world (more so than they already have)?
Yahoo would have to fully adopt adsense to help offset the 8 point drop they’re going to see tomorrow morning..what would that do to Yahoo’s company morale?
I was wondering, and hopefully someone could give a little insight, say Microsoft backs out just so that Yahoo’s stock plummets and they can come back with a lower offer….isn’t that illegal? To intentionally sabotage a company’s stock price like that? Couldn’t the Yahoo shareholders, especially the large holders go after Microsoft? I am sure Microsoft would never admit to that but it would be a little convenient, am I totally wrong about this?
Some thoughts:
1. Microsoft screwed up through bad tactics. Their initial bid was too high. If they had made their initial offer at $27 (when the Yahoo stock price was $19.50) and then raised to $35, they would own Yahoo. By bidding $32 and then making a measly raise to $35 they appeared to be trying to nickel and dime the bid.
2. Why did Microsoft decide not to go hostile? Did they poll the big institutional shareholders and discovered that they did not have enough support? Is there a lot of opposition to the deal in Microsoft?
3. It is not necessarily over yet. Look at the Oracle BEA Systems merger. That took a year or so to complete, with Oracle withdrawing their initial bid.
god damn it jerry is ugly as f(**()
Cartoon is too good
good