Sunday, April 6th 2008

Microsoft Sends Letter to Yahoo!

It would seem that Microsoft has grown a little impatient over its takeover bid for Yahoo! earlier this year and has now sent a letter to the company persuading it to sit down and negotiate a deal:
It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.

While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we’ve seen no indication that you have authorized Yahoo! management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.

During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.

By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.

Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.

It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.
Source: Microsoft
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25 Comments on Microsoft Sends Letter to Yahoo!

#1
btarunr
Editor & Senior Moderator
And why is such a thing out in the public? So Yahoo!'s shareholders see this and pressurise it, push it for the takeover. Such as it is, it's just a neatly-packaged hostile takeover.
Posted on Reply
#2
beyond_amusia
I was waiting for this to crop up since yesterday when I read it on MSN. I certainly hope Yahoo dies willingly. I like their services, but their software is so buggy I generally only use it when I have to; it'll be nice to see all these things integrated into Windows Live, yet sad to see one of the oldest web portals go... I know MS will leave it all alone for a while, but sometime in the future they may just decide it'll be much easier to manage a single version of each service and a single web portal.
Posted on Reply
#3
beyond_amusia
by: btarunr
And why is such a thing out in the public? So Yahoo!'s shareholders see this and pressurise it, push it for the takeover. Such as it is, it's just a neatly-packaged hostile takeover.
The Yahoo stocks fell yesterday after they (Yahoo) announced getting this letter. I wonder why Yahoo just don't float a loan and buy back their stocks to hold off MS... Then again, I bet they already concidered that or it's just not possible to do.
Posted on Reply
#4
3870x2
This makes me frown upon microsoft. Yahoo! is a legendary company, been there since the beginning of the WWW, and microsoft has the cojones to make a move like this. Its like the US telling a country, "we are bigger than you, give us your land or we will attack". I do understand that it is better for the employees and stockholders, but do they have to make it so hostile? i hope that yahoo pulls a fast one on them, and makes them fall on their face.
Posted on Reply
#5
beyond_amusia
Part of me wants to see it too, but another part want to see MS triumph... I feel very bipolar over the whole thing, lol.
Posted on Reply
#6
magibeg
by: 3870x2
This makes me frown upon microsoft. Yahoo! is a legendary company, been there since the beginning of the WWW, and microsoft has the cojones to make a move like this. Its like the US telling a country, "we are bigger than you, give us your land or we will attack". I do understand that it is better for the employees and stockholders, but do they have to make it so hostile? i hope that yahoo pulls a fast one on them, and makes them fall on their face.
Welcome to the world of business, your company may be 'legendary' but if its slowly been sinking in value and bleeding market share to more aggressive rivals for the past few years something like this is bound to happen. In short microsoft is making the best decision for microsoft and Yahoo! is resisting their downfall.
Posted on Reply
#7
EnergyFX
by: magibeg
Welcome to the world of business, your company may be 'legendary' but if its slowly been sinking in value and bleeding market share to more aggressive rivals for the past few years something like this is bound to happen. In short microsoft is making the best decision for microsoft and Yahoo! is resisting their downfall.
yup
Posted on Reply
#8
robodude666
Hell, if Yahoo! doesn't want to be bought out by Microsoft then Microsoft shouldn't force them to be sold. The letter is total BS in my opinion. Microsoft, or any company no matter how powerful, should never say "We offered them a lot of money, but they didn't accept. wtf? We want to buy you now!"

If you want to buy some random person's McLaren SLR for $20,000 and he doesn't want to sell it then you have no deal. Don't try to force it.

I want Google to buy Yahoo! right now for half of what Microsoft offered just to piss Microsoft off and end this whole Yahoo! stuff.
Posted on Reply
#9
ManofGod
LOL, even with a merger, Google will still be lightyears ahead for Microsoft. The one thing microsoft has yet to understand is that google is better for one primary reason, they have a better search engine and product that does what it is supposed to do. :laugh:

Joe
Posted on Reply
#10
WarEagleAU
Bird of Prey
Haha so true. Business economics are so evil and twisted, sometimes you got to love it. I just dont see why MS wants them so bad. Its like they are a crackhead looking for a crackpipe and some crack! HAHA :roll:
Posted on Reply
#11
timta2
I just worry that if this happens that Microsoft will turn Yahoo's services into something horrible like Microsoft's past/current services (in particular search/email). Maybe Microsoft should put a little more effort into their own products/services.
Posted on Reply
#12
JrRacinFan
Served 5k and counting ...
So wait a moment if this goes through, does this mean Microsoft will now have a controlling peice of how I get my Yahoo! DSL?!
Posted on Reply
#13
imperialreign
The problem I see with this whole situation is that everyone thinks MS is trying to be nice - I don't think so; everyone has just forgotten how to interpret MS' statments (remember, although they use english, MS seems to speak a different language than everyone else). Here, let me translate the letter:
We have offered Yahoo! what we feel is a generous price for such a, in our opinion, worthless, evil empire. It has been over 2 months since we extended an offer to allow your evil empire to become one with our monopoly, but your complacency has mocked us. Resistance is futile.

We feel that our plan for your assimilation has been fair to this point. We have given you enough time to join the collective freely, but you have failed to play fairly. Resistance is futile.

Over the last two months, our covert attempts to weaken your evil empire have proven successful; as witnessed by your declining shares and visits by outsiders to your evil empire's web pages. Although, you have made attempts at banding together with other evil empires, which will only deny the inevitable, and force us to spend more than your worth; it does not hamper our resiliance. Resistance is futile.

The amount of currency we offered two months ago for your evil empire still stands - although we are considering reducing our offer if you fail to assimilate soon. Resistance is futile, you will become one.

We are now instituting a 3-week countdown before we launch boarding parties to assimilate your shareholders from under your feet. Once we have assimilated your shareholders, your empire cannot stand. The clock is now counting, you will be assimilated, resistance is futile, you will become one.

By ignoring our previous attempts, we feel that you are proving to the world your lack of intelligence, and that your evil empire truly is evil. We have reassesed your threat level, and will be forced to act if you fail to comply. Resistance is futile, you will become one with the Microsoft.
Posted on Reply
#14
Eric3988
by: imperialreign
The problem I see with this whole situation is that everyone thinks MS is trying to be nice - I don't think so; everyone has just forgotten how to interpret MS' statments (remember, although they use english, MS seems to speak a different language than everyone else). Here, let me translate the letter:
ROFL, wow that was funny as hell! But, I think you hit the nail on the head. "We are Microsoft, we will purchase your company, prepare to sell your stock. We will add your biological and technological distinctiveness to our own. Your company will adapt to service our own. Resistance is futile." or even more old school, "ALL YOUR BASE ARE BELONG TO MICROSOFT".
Posted on Reply
#15
Triprift
From what ive read ms has given yahoo 3 weeks to make a deal. Its seems there very pushy on this but id say google should stay away from yahoo the got yt and should be happy with that.
Posted on Reply
#16
candle_86
im all for an MS take over, it means my 3 shares of yahoo are worth a whole lot more, not saying ill get rich, but i am saying the stock i bought on my 18th birthday in 2005 is loosing value and i spent money on it. Id very much like a company such as MS with assests to buy Yahoo.
Posted on Reply
#17
candle_86
by: Eric3988
ROFL, wow that was funny as hell! But, I think you hit the nail on the head. "We are Microsoft, we will purchase your company, prepare to sell your stock. We will add your biological and technological distinctiveness to our own. Your company will adapt to service our own. Resistance is futile." or even more old school, "ALL YOUR BASE ARE BELONG TO MICROSOFT".
this fits MS well
Date: Mon, 15 Aug 1994 07:21:34 +0000
From: wlt@mercurio.uc.pt (Wagner Luiz Truppel)
Subject: A joke that Mac & ST:TNG fans will love

A friend of mine sent me this little piece. Enjoy.

>"Star Trek Lost Episodes" transcript.
>.
> "Mr. LaForge, have you had any success with your
>attempts at finding a weakness with the Borg? And Mr. Data,
>have you been able to access their command pathways?"
>.
> "Yes, Captain. In fact, we found the answer by
>searching through our archives on late twentieth-century
>computing technology."
>.
> >screen.>
>.
> "What the hell is 'Microsoft'?"
>.
> "Allow me to explain. We will send
>this program, for some reason called 'Windows,' through
>the Borg command pathways. Once inside their root com-
>mand unit, it will begin consuming system resources at an
>unstoppable rate."
>.
> "But the Borg have the ability to adapt. Won't
>they alter their processing systems to increase their storage
>capacity?"
>.
> "Yes, Captain. But when 'Windows' detects this, it
>will create a new version of itself called an 'upgrade.' The
>use of resources increases exponentially with each iteration.
>The Borg will not be able to adapt quickly enough.
>Eventually all of their processing ability will be taken over
>and none will be available for their normal operational
>functions."
>.
> "Excellent work. This is even better than that
>'unsolvable geometric shape' idea."
>.
><. . . 15 minutes later . . .>
>.
> "Captain, we have successfully installed the
>'Windows' in the command unit and, as expected, it
>immediately consumed 85% of all resources. We, however,
>have not received any confirmation of the expected
>'upgrade.'"
>.
> "Our scanners have picked up an increase in Borg
>storage and CPU capacity to compensate, but we still have no
>indication of an 'upgrade' to compensate for their increase."
>.
> "Data, scan the history books again and determine
>if there is something we have missed."
>.
> "Sir, I believe there is a reason for the failure in the
>'upgrade.' Apparently the Borg have circumvented that part
>of the plan by not sending in their 'registration cards.'"
>.
> "Captain, we have no choice. Requesting
>permission to begin emergency escape sequence 3F . . ."
>.
> "Wait, Captain, I just detected that their
>CPU capacity has suddenly dropped to 0%!"
>.
> "Data, what do your scanners show?"
>.
> "Apparently the Borg have found the internal
>'Windows' module named 'solitaire' and it has used up all
>the CPU capacity."
>.
> "Let's wait and see how long this 'solitaire' can
>reduce their functionality."
>.
><. . . Two hours pass . . .>
>.
> "Geordi, what's the status of the Borg?"
>.
> "As expected the Borg are attempting to re-
>engineer to compensate for increased CPU and storage
>demands, but each time they successfully increase resources
>I have set up our closest deep space monitor beacon to
>transmit more 'Windows' modules from something called
>the 'Microsoft fun-pack.'"
>.
> "How much time will that buy us?"
>.
> "Current Borg solution rates allow me to predict an
>interest time span of 6 more hours."
>.
> "Captain, another vessel has entered our sector."
>.
> "Identify."
>.
> "It appears to have markings similar to the
>'Microsoft' logo."
>.
> "THIS IS ADMIRAL BILL GATES
>OF THE MICROSOFT FLAGSHIP MONOPOLY. WE
>HAVE POSITIVE CONFIRMATION OF UN-
>REGISTERED SOFTWARE IN THIS SECTOR.
>SURRENDER ALL ASSETS AND WE CAN AVOID ANY
>TROUBLE. YOU HAVE TEN SECONDS."
>.
> "The alien ship has just opened its forward hatches
>and released thousands of humanoid shaped objects."
>.
> "Magnify forward viewer on the alien craft."
>.
> "Good God Captain! Those are humans floating
>straight toward the Borg ship with no life support suits!
>How can they survive the tortures of deep space?!"
>.
> "I do not believe that those are humans sir; if you will
>look closer, I believe you will see that they are carrying
>something recognized in the twenty-first century as doe-skin
>leather briefcases, and wearing Armani suits."
>.
> "Lawyers!!"
>.
> "It can't be. All the lawyers were rounded up and
>sent hurtling into the sun in 2017 during the great awaken-
>ing."
>.
> "True, but apparently some must have survived."
>.
> "They have surrounded the Borg ship and are
>covering it with all types of papers."
>.
> "I believe that is known in ancient vernacular as 'red
>tape.' It often proves fatal.
>.
> "They're tearing the Borg to pieces!"
>.
> "Turn off the monitors. I can't stand to watch. Not
>even the Borg deserve that."
Posted on Reply
#18
Dangle
by: robodude666
If you want to buy some random person's McLaren SLR for $20,000 and he doesn't want to sell it then you have no deal.
Wrong analogy. MS offered WAAAAAY more than yahoo is worth.


I hope MS buys them out. Then google won't have such a stranglehold on the market and there'll be some fierce competition. If you think google having a monopoly on the internet is good, please switch out of your liberal arts courses and take some econ or business classes...
Posted on Reply
#19
BrankoJ
Yahoo knows that they have to sell to someone, and they want to be sold. They only played game to get better share price.
Posted on Reply
#20
hacker111
I saw in the paper...that Microsoft has put up a $44 billion bid just for yahoo...the first offer was $4.4 billion..What the hell is yahoo doing? $44 billion for the company? I dont know how mch they make ect..but this seems likea hell of agood deal!:slap:
Posted on Reply
#21
3870x2
by: magibeg
Welcome to the world of business, your company may be 'legendary' but if its slowly been sinking in value and bleeding market share to more aggressive rivals for the past few years something like this is bound to happen. In short microsoft is making the best decision for microsoft and Yahoo! is resisting their downfall.
The aquisition is probably a good idea for Yahoo!, they have been having to lay off, and their competition with Google is destroying them. I need no "welcome" into the world of business, what I said prior was simply emotion, not stated on any fact. Ive been using yahoo! for years, my website is hosted through Yahoo!, and thus far I have been happy with their product. If microsoft can upgrade what they have already done, instead of changing it completely, that would be great for me, otherwise I might have to choose another host.
I saw in the paper...that Microsoft has put up a $44 billion bid just for yahoo...the first offer was $4.4 billion..What the hell is yahoo doing? $44 billion for the company? I dont know how mch they make ect..but this seems likea hell of agood deal!
The reason they wont take that mega generous offer is because the guys making the decision to say no to it, are the same people who will be demoted or lose their job after the company has been taken over, especially now that they have just pissed off the giant. They are on the highhorse with their big heads, and refuse to be removed, even if it is bad for their 14,000 employees.
Posted on Reply
#22
AsRock
TPU addict
Used Yahoo many years now all though i have a MSN account and a GMail too i don't use the later 2.

Can Google acutaly buy them ? would that make them own to much of the market ?..

MS buys Yahoo i'll look else were for a e-mail account..
Posted on Reply
#23
Darkrealms
by: AsRock
Used Yahoo many years now all though i have a MSN account and a GMail too i don't use the later 2.

Can Google acutaly buy them ? would that make them own to much of the market ?..

MS buys Yahoo i'll look else were for a e-mail account..
I have to agree, I looked else were not long after MS took over hotmail : (
Posted on Reply
#24
BumbRush
i dont see google as evil or a monopoly, other options excist, and MS sucks, they will WILL ruin YIM.

msn/wlm sucks, its buggy, unreliable, oh yeah and did i mention its UNRELIABLE? their networks been booting people for months now, hell i like MANY others tryed WLM and ended up unable to log back in after the network kicked me, this lasted 3 days, i removed WLM and went back to pidgin and bam works.........

yahoo on the other hand NEVER boots me, and even in beta yahoo9 is more stable and its file send ALWASE works....
Posted on Reply
#25
Triprift
Ms and Google are just as bad as each otha there both the dominent in there field and neither would be good as purchaser.
Posted on Reply
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