Until today I’ve largely been a big supporter of Microsoft’s efforts to acquire Yahoo. A couple of days before Microsoft placed its initial $44.6 billion bid for the company, I told Fox Business Channel that a Microsoft merger had to happen to save Yahoo (and I certainly wasn’t the first to say this, I just had magnificent timing).
Throughout the ups and downs and stupendous drama of the negotiations, I held firm that a deal was in the best interests of both companies. Not because I’m a huge Microsoft fan, but because the health of the Internet requires a competitive search market. Google controls too much market share and too much related search revenue. A counterbalancing force is needed to keep the system healthy. And Microsoft or Yahoo standing alone cannot counter Google.
But when Microsoft pulled its bid just as Yahoo was about to accept and replaced it with a search buyout deal that I described as equivalent to them trying to get the milk for free instead of buying the cow, I began to wonder if things were getting out of hand. Since then, Yahoo has quite literally prostrated themselves before Microsoft to get a merger done, even perhaps at a price much lower than Microsoft’s original bid. And Microsoft has largely toyed with them.
Yesterday’s shenanigans, however, clearly crossed a line. Microsoft and activist Yahoo shareholder Carl Icahn jointly announced that they’ve been talking, and that Microsoft may be willing to entertain a full buyout offer once again. But only on the condition that Yahoo’s board of directors is replaced: “We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the “Search” function with large financial guarantees or, in the alternative, purchasing the whole company.”
Icahn explained further, saying that Microsoft can’t be expected to let Yahoo stay in current management’s hands during the months-long closing period after a transaction is consummated. He added: “Jerry Yang and the current board of Yahoo! will not be able to “botch up” a negotiation with Microsoft again, simply because they will not have the opportunity.”
This is largely complete nonsense. During the transition period after a merger agreement Microsoft and Yahoo would be working closely and Yahoo would be unlikely to take any actions that jeopardize the deal. What’s far more likely is that Microsoft, led by CEO Steve Ballmer, have taken Yahoo’s rebuffs entirely too personally. It’s no longer just about business, it’s about destroying and humiliating the people who embarrassed Microsoft. And sadly, that has nothing to do with creating a balance of power in search.
Just as I criticized Yahoo for not quickly accepting Microsoft’s offer in early February before the mass executive exodus and destruction of shareholder value, I now point the finger at Microsoft. Yahoo is standing at the altar waiting for you to say “I do,” Microsoft. Time to put up or shut up.
I’m all for a merger. But I won’t stand by quietly while Microsoft destroys what’s left of Yahoo just because it can.
Same old Microsoft. Mean spirited and just plain nasty. It’s not Michael is right it’s not about business. When Microsoft does acquire it will have lost and so will Yahoo and Microsoft shareholders. Shareholders of Yahoo will let lawsuits fly.
No, I don’t see Yahoo! waiting at the altar. But Icahn tries to drag Yahoo! there.
the ones that are the death of Yahoo! are Microsoft and Icahn.
And this time agree with you. It’s no longer just about business, it’s about destroying and humiliating Yahoo!.
And I still think Microsoft buying Yahoo! would do more harm to the search business industry. Microsoft will never know how to profit from buying Yahoo!
First time I have read michael arrington, probably the last… insider information is usually wrong or misinformation. No matter what the discussions , meetings or offers that are being thrown around, you have no clue unless you are part of them, which I am presume you are not. Bottom line is Yahoo has been taken down the .com road by its board of directors and left to fend, or die on its own, all the while fat cats still get fatter. Google is the unruly child demanding that everyone pay attention or else, well its time for a good old fashion spanking.
will yahoo and msn combindly beat google, i dont think so, and if they both merge, yahoo brand name might be fall, and google will rock more in search world
History repeats itself. The same thing happened to TWA. While he made a fortune he crippled and destroyed TWA.
Wiki : ‘Under Icahn’s direction, many of its most profitable assets were sold to competitors, much to the detriment of TWA. Icahn also moved the company’s headquarters from New York City to his hometown, Mt. Kisco, New York. Icahn was eventually ousted in 1993, though not before the airline was forced to file for bankruptcy in 1992. Icahn emerged unscathed.’
http://www.democraticundergrou.....15;2982035
Carl Icahn isn’t the slightest interested in the shareholder’s value. He just wants to cash in. If he takes over the board very bad deals will be made with MS. Yahoo search will be part of MS. Yahoo will disappear. Who will benefit from it? Just Icahn and MS.
Guys, you just don’t get it:
1. Everyone talks about this severance package. You obviously don’t have the facts:
A) The employees can’t just leave. All it does it give them a good severance if the wackos at MSFT or Icahn, Inc. decide that they want mass layoffs. THAT’S IT.
B) It can’t be removed. The terms of the agreement specifically state that it can’t be removed while Y is in play. Deal is done, it can’t be changed, but it doesn’t matter anyway.
2. I understand that you all must have bought Y and now the price went down and I sympathize. But, what you don’t understand is that it will KILL the company. No one wants to work with MSFT people or products and all this deal does is strengthen the Big G.
The employees are laughing because they’re short selling their own stock because you idiots are so influenced by whatever rumors you here. After 8/1 it will go down again to 19 because of you idiots and I’ll be ready to buy. Once you see what is about to be released by Y you’ll go and buy again. Who benefits? Me. Thanks.