Yahoo issued the following press release responding to the breakdown in today’s Microsoft negotiations (interesting that Chairman Roy Bostock is taking center stage here, not CEO Jerry Yang). As we said earlier, this is just the beginning of a very long week for Yahoo.
Yahoo! Issues Statement in Response to Microsoft
SUNNYVALE, Calif., May 03, 2008 (BUSINESS WIRE) — Roy Bostock, Chairman of Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company issued the following statement today in response to Microsoft Corporation’s announcement that it has withdrawn its proposal to acquire Yahoo!:
“We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets. From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view. Yahoo! is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making. Today, Yahoo! has:
– a refined strategic focus to drive enhanced volume and yield;
– reorganized to focus its efforts on its most promising products and services;
– invested in innovations designed to revolutionize display advertising and facilitate closing the competitive gap in search; and
– enhanced expense and resource management to support improved profitability.”
Jerry Yang, co-founder and chief executive officer, Yahoo! Inc. added, “I am incredibly proud of the way our team has come together over the last three months. This process has underscored our unique and valuable strategic position. With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users.”
About Yahoo! Inc.
Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California. For more information, visit pressroom.yahoo.com.
Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.
“With the distraction of Microsoft’s unsolicited proposal now behind us…”
You wish. It’s just getting started.
It brings us a surprise end. Microsoft has a more failure at their Internet strategic roadmap.
Will this slow down fresh hiring at Msft?
Lee - agree. Pulled that into the title.
Yahoo! is really evolving, I’m glad Microsoft is keeping it’s hands off!
There is love of the brand and running a business and I think Yahoo maybe forgot the latter. It is about shareholder value and the value is in what money you can make for your shareholders.
Ohh boy this is going to be a very interesting Monday.
Cheers - Eric
Pretty nice response. Now I really hope Yahoo gains momentum to solidify their business and show their words in action.
“executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market.”…
Yeah! You are doing GREAT at this market selling your selfes to Google! Thats an earth-shaking inovation and a superb sample of strategic thinking: “if you can beat them, join them”
What a opportunity lost to join force to a giant and build an respectful option for the market…
Yahoo chose long ago to go public but they are acting like a private company. They have a responsibility to their share holders and these poison pills they have taken recently shows how much they care about the stock price. They should have negotiated with MSFT in good faith instead of immediately looking for other suitors. From what I have read … it seems that YHOO had no intention of ever selling to MSFT, no matter what the price was offered. If YHOO was really undervalued by MSFT by billions, where were the other company’s offers?
Glad I sold my stock already.
what responsibility to their share holders? they have had three months long to sell their stocks. If they still hold YHOO stocks, it is only their own greedy to blame.
Yahoo should be THANKING Microsoft for doing this. This gave Yahoo a kick in the ass it so desperately needed. Maybe now they won’t take their situation of minting money for granted and will continue innovating and bringing new products to market
I guess Jerry doesn’t believe in efficient markets. If MSFT’s deal undervalued Yahoo’s worth he must have been buying a TON of Yahoo stock on the open market when it was under $20/share *rolls eyes*
everyone needs to calm down, read this blog..they have good points.
http://ibooyah.com/blog-mt/mt-.....arch=yahoo
Memo to Roy Bostock …
You screwed the pooch.
Thank you,
All Yahoo Shareholders
A couple of comments:
1. Miscrosoft needs to concentrate on making better software, includong web-based software, networking, and devices. Stay out of the damn internet portal business. Microsoft is not an online content comapny, and they need to stop dreaming about all these corny “synergies” which will never play out. This is megalomaniacal dreaming. Tell me, WTF does Yahoo have to do with making better software? Microsoft needs to go back to the drawing board, trash crappy products like Vista, and come out with a new OS that’s 1/3 the size of Vista.
2. Coprorate America needs to permanently ban the phrase “maximize shareholder value” from its lexicon. This is deceptive — what they really mean is “maximize CEO and executive pay.” Why don’t they just come out and say it? .
Hey Michael,
Seems that a lot of people are commenting about potential possibilities for both Yahoo and Microsoft, as well as a lot of other tech companies that are being affected by this. You guys should give away a prize if/when someone guesses it right. At the least, people will get a kick out of it.
Just a thought
Peter Epstein
http://www.thewebwar.com
yahoo is not serving stockholders. This was emotional decision by jerry yang and david flio. They will be lucky if someone offers them 20 billion.
You need a near death experience to survive. Yahoo should start by doing what Microsoft would have done. Shed nonperforming assets.
War is negotiations (politics) by other means…
Shareholders who thought they were gonna get 33 buck are likely to wind up with half that by monday morning.
Get ready for shareholder lawsuits.
Meanwhile, by outsourcing ads to google, yahoo has shot its ad business - not shot it dead - but why would a publisher go with Yahoo if Yahoo is going with Google?
Nice.
I am really glad yahoo still exist, hope yahoo provide more nice services..
Jerry Yang needs to go.
They will continue to add things such as “Buzz” “Women’s Portals” etc.
Why no reinvent the movie business? music business?
At least TRY to be great.
Yahoo great you can keep being Yahoo for maybe another year. But remember this lesson and put your ego aside. This is your chance for a rebirth. Don’t screw it and wake up.
how many vice presidents does yahoo have again? what’s the ratio of managers to workers?
the brass at yahoo didn’t want to sell because they knew that microsoft would come in and clean house. not that microsoft doesn’t have bad managers, and doesn’t make bad decisions, but my biased opinion is that:
1) microsoft tends to put a premium on talent, albeit maybe not to the extent that google does.
2) microsoft understands that studio execs tend to have no effing clue what they’re doing in software, since software is about software, and NOT about who schmoozes with whom.
regarding mr. cashy cash’s comments, yahoo’s users tend to be women. the name of the game is and always will be monetization, so it makes sense as to why they tend to target their core demographic.
I’ve worked with Yahoo as a reseller of their search and also on the sem side. Much of their technology for these “services” is nothing short of embarrassing. Need I mention panama to add to the heap. Marrying with a company like microsoft with a history of successful (I am forgetting about Vista here for the sake of argument) software development would be huge even aside the many other synergies that would exist like increased search market share.
A note to yahoo–your partners hesitate to invest in your offerings because you do not offer them sufficient reporting statistics to inform / justify their investments. A daily spreadsheet is ridiculous when you consider the reporting that Google offers.
Now you are refusing to take steps clearly inline with improving your company–there will be a comeuppance for this.
Yahoo may/is opening up their network for developers like Facebook, and can make it real huge. Good luck to Yahoo!
Subhankar Ray
Microsoft is better off on their own. They need to stop being cheap and invest like crazy in their own assets. They’re only going to do it right if they do it their way. They can be scary good in this space if they play their cards right.
xBox (and xbox live) = good, networking has adoption, price is reasonable, and it all works pretty good (as long as it doesn’t burn rings in my games or give me the red circle of death)
zune = “can’t use cool sharing because everyone else has an ipod”
Mouse/keyboards = good (premium but not groundbreaking)
live = “like little google clone but less reliable with a smaller index, why bother”
silverlight = good (.net is still rising, and I could see myself using this down the line, but not today.)
office = good (everyone uses it and I can’t live without excel or word).
sharepoint = good (this is pretty useful)
MS money = “why switch from intuit products, really…”
.net = good (huh, this runs ALOT faster than my Java version…)
.net framework = my app wont run without downloading this crap?
IIS = good (GUIs are my friend, apache is older than dirt)
Vista = “like upgrading cars to SUVs when everyone’s complaining about gas prices”
Yahoo finally started moving but it’s still too uncoordinated. Lots of great services but I think they need to start reinvesting in what they have instead of spreading out further. Sure they’ve removed some services that weren’t working, but those services weren’t working because it feels like they neglect their core assets too much by chasing the next thing. Throw some more innovation at groups, mail, store, finance, news, even reinvent the directory.. The Flickr thing is cool but the oldies can still be goodies if you made it a coroporate priority to try. Also, they’ve whored out some assets in an effort to bring in more cash. I agree that they need more cash but sometimes a paid service (like flickr pro accounts, Yahoo Store, etc…) is a better model to make money without “ruining” your product.
@Brian: You really seem to have little or no experience in business (be it small or corp) IT or web development. While I could nitpick about the pros and cons of using your suggestions in the business sector, I’d rather point out that when it comes to a web server, the person managing it shouldn’t need a GUI so much so that they pick an inferior, poorly-supported and highly vulnerable web solution instead. The only possible explanation I’d understand is an existing intranet in place with the Web portion powered by IIS. Apache is secure, trusted, popular, stable, and several other adjectives I could tack on. IIS is simply not a reliable Web server solution.
M&A is a tricky business and I am happy for Yahoo! as well as for Microsoft that this transaction did not go through.
Reason:
1. Investment banks and consulting companies (almost) always overstate the synergies in the transaction. Its a simple reason: They get a large chunk of money in the form of transaction fees if the merger goes through.
2. Had the deal gone through, it would have been an uphill task for Yahoo & Microsoft to merge the work-cultures, maintain the Yahoo brand equity, and integrate the operations.
3. Consolidation in this space is not a good thing for the market. Yahoo and Microsoft both like to acquire small companies and this trend boosts the innovative landscape in the valley. Imagine what would have happened (for smaller companies’ acquisitions) if Yahoo would have ceased to exist and Microsoft would have spent a considerable chunk of its kitty on the acquisition.
Good luck to Yahoo and Microsoft. Yahoo! has to come back and execute on the “statement” that it deserves more valuation. I have no doubt in their ability but am not sure about what their strategic vision is. There should be an internal “cleansing” operation within Yahoo so that it can find its glory days once again!
@Chris Stick with what you know. IIS/.net deployments have worked well for me. Maybe you’ve had a lot of trouble and frustration with it. From my stand point there are merits to both and a lot of it depends on context. I haven’t had integrity issues or vulnerability issues that have caused the IIS to give me problems. Quite Frankly, I find it extremely easy to work with and I like that. Apache is a tried and true work-horse but it’s not the only option on the block. Believe me there are many top corporations whose websites run it successfully. I think there are a lot of opinions out there, this is mine.
Yahoo is a joke, dying on the vine. Only Jerry, Sue and their Board are yet to figure it out.
$19….the price of Yahoo’s stock on Monday. Yang is an idiot.
Today Yahoo giving Microsoft the Finger, but tomorrow they are set for Romantic Date!
Love is in the Air! -;)
umm…. in a word, amazing!!!
to all you guys who are complaining that yahoo should have taken the deal, i’m assuming that you’re also the same ones who were cheering when dell stated that jobs should simply part out apple, and return the money to the shareholders…
of course, this was back in the late 90’s/early 2000s.. oh yeah, that’s right, most of you were probably in high school then!!!
the fact of the issue is that alot of businesses deal with a dynamic cycle, and yahoo has the potential to come back, and who’s to say that something might not happen to google within the next few years.
keep in mind, if you hit google regarding their advertising, then google crashes…
and i don’t believe you have to impact google very much on a percentage basis for their shares to be impacted…
peace..
@ Wen: Exactly! If the shareholders have no faith in Yahoo!, they had ample time to dump it. If they didn’t, its greed or stupidity.
They could’ve folded but waited for the River card.
So they have nobody to blame but themselves. People never learn from Kenny Rogers.
Of course I’m hoping that Yahoo! really can execute and right the ship.
What they are talking about??
Seems they are selling the search to Google… this is value for the company?? maybe in short term some money… Just accept that you have killed Overture like many other companies you bought in the past and left to die without giving them innovation to compete… Nice Idea…better management. Close the GAP in search, Rostock??? Sounds like a Joke.
Keep Panama working and improve it. Show us the Yahoo! innovation that you and Yang are talking about all the time…
It simply rocks..:) party at yahoo..:) Good job yahoo you saved the web…:) Now just release a big Missile and just finish of M$….MS never want to spend anything to innovate and share them. They just don’t want competition. Only motive was to challenge google. If Google makes x you make 10x….Just do that don’t worry if others are doing well. Next time someone uses cell phone to send text or wears a shirt you some Ad there
I am very sure your Open Strategy will make more developers and more service providers in…All the best again
and nobody asked what their employees feel ? That stinky management of M$ and use of open tech at yahoo…Why does MS think they gonna have good team ? Or they just want to buy yahoo to get more market share and clients hey have right now ? i don’t think any tech tht yahoo has developed over years are anyways useful to M$. They have almost 60% of overlapping services…which one remains ? What about those ppl who worked for many years to develop great tech for search and other services…their work is in vein ? Just bcos MS wants is propriety tech to be used ?
The CEO of the company needs to get fired. Ballmer that is. Everything about how this deal was offered and executed was ridiculous. Did Murdoch raise his price by $2 per share on the Dow Jones deal…the Bancroft family was even more antagonistic than Yahoo was. But Murdoch knew how to work his magic. This Ballmer guy seems to be a big, blumbering fool. If something you really wanted is worth $30, it’s also probably worth $40, otherwise why do it. Why nickel and dime on $2, $4…seriously…if the acquisition benefits are not worth another $4, it’s probably not worth the initial $31 to your company. The lesson here is offer what you can upfront, don’t nickel-and-dime or ever move on that price, and apply intense, white-heat PR pressure…MSFT let YHOO take 4 months. That’s crazy.
For all the talk about Yang, people need to realize that MSFT has been flat since 2004. YHOO’s stock has more than doubled since 2004. What has Ballmer done to adapt his company to the new era of computing in the 2000s. Nothing. I still don’t have Vista and wouldn’t mind an entirely browser-based system. This is where it is headed. No one cares for operating systems or desktop software anymore…will you be using MS Word 5 years from now. Is it guaranteed? I don’t know.
The YHOO deal seemed like a company stretching to hit a homerun. Get bigger, get more scale, blah, blah, blah…
MSFT doesn’t have the talent to execute small ideas that get big. Those types of people either join start-ups or work in growth cultures. MSFT is like GE.
They should break up the company into the OS, Gaming, Apps & Web, and smaller units. Assign tracking stocks, give employees in each unit equity in the tracking stock. You cannot innovate with purely-salaried employees.
As far as YHOO is concerned. The arbs own the float.
This blog is pathetic in content and quality.
Microsoft is an disgrace to the USA and to IT, business and innovation. Truly a threat to the service economy of the USA.
Putting focus on yahoo is such a passing the buck, burden.
Only in a banana republic, does such exist, and often such blogs like these, with little REAL content, analysis, etc.
Have fun.
bub bye.
Go Yahoo! go!!
“Go Yahoo! go!!”
Oh they’re going alright…
One week from now, the MS proposal is going to look like a dream vacation compared to what the future holds — shareholder lawsuits, getting totally hosed by Google in the advertising deal, getting more proposals from private equity groups. Stranger things have happened than MS coming around later on and being a “white knight”.
So what’s next? Maybe, Yoogle!
To Jerry,
Portal(old) = Social media site. Only different name.
Only way to Monatize social sites is go Vertical.
Google does not have the properties you already have and they have’nt figure out how to crack the social scene.
Yes, I believe you are undervalued, only if you can montasize your great properties.
Last but not least, get yourself a great CEO and let the dirty work necesary of whipping your disfuctional groups into a coherent force. Frankly, you are just too nice.
Yahoo thinks it has just cut of it’s nose to spite it’s face. Pride or ego.
MS has pulled a classic take over trick here. Dangle a big fat carrot and watch the shareholders and media now do the nasty work for them.
For anyone other than “founders” its just about making money, which for the morons means
money take out > money put in = good
money put in > money take out = bad
“Behind us!!!!” So they can do what? Accelerate their dramatic slide to irrelevance? Hey, Jerry, you just lost another 3% share in China, or do you not care?