Microsoft bids for Yahoo!

[YmoBeThere]

$31 a share, a significant markup from Thursday's close.

As MSFT shareholder, not sure what to do but will probably buy on the weakness.

[billybreen]

$31 a share, a significant markup from Thursday's close.

As MSFT shareholder, not sure what to do but will probably buy on the weakness.

I've worked closely with both organizations, so this is really interesting. There are significant cultural differences; it will be interesting to see what form the combined organization takes, should this go through.

Meanwhile, Google is down 40 after hours due to disappointing numbers. That's not good for the market.

[DevilAlumna]

I wonder if Yahoo will accept the bid this year, as they turned down an offer last year. But since October, their stock had dropped 46% (it's now back up today) and their CEO left last month, so maybe they're feeling a little more vulnerable?

But, this opens the door to other offers as well, so definitely not a done deal. But I can't dream of who else, besides GOOG, has the kind of cash to offer, where a merger would also make sense. Interesting times.

[YmoBeThere]

Not sure anyone else can offer up $44.6 billion(offer is for stock or cash). Google didn't make much of an impact on the market today. Could the Google era be over?

FWIW, I did add to my MSFT position near the close today.

[DevilAlumna]

The Tech Tracks blogger @ Seattle Times has some really good posts this morning on the potential purchase:

http://blog.seattletimes.nwsource.com/techtracks/

Another interesting purchase that's been a bit overlooked:

Amazon to Buy Audible.com for $300M.

[billybreen]

As was widely expected, Yahoo! is rejecting the deal.

[YmoBeThere]

Microsoft has given Yahoo! a 3 week deadline to respond to its offer.


http://biz.yahoo.com/rb/080405/yahoo...soft.html?.v=3

[billybreen]

Microsoft has given Yahoo! a 3 week deadline to respond to its offer.


http://biz.yahoo.com/rb/080405/yahoo...soft.html?.v=3

We'll see how serious they still are.

[DevilAlumna]

Microsoft has given Yahoo! a 3 week deadline to respond to its offer.

That seems about right -- enough time for Yahoo! to pull together and evaluate its Q1 numbers, realize it's not a pretty picture, and either let the sale go through smoothly, or get taken over aggressively. I don't see how they can continue stand alone with that offer on the table, unless their Q1 numbers are phenomenal; all signs point to a downward trend however.

[billybreen]

Microsoft withdraws its bid. Probably best for both, IMHO.

[YmoBeThere]

Well, maybe not if you are a Yahoo! shareholder. No other deal appears viable and the market was saying before the bid we really don't think you have anything interesting going on, thus the $19 share price before the bid. This sort of reminds me of the Hershey-Wrigley's takeover attempt of 2002. In attempt to maintain the status quo, HSY has destroyed millions of dollars of shareholder value.

[DevilAlumna]

Well, Jerry Yang's got enough rope to hang himself on, now. It'll be interesting to see what both stock prices do on Monday; and what the Yahoo board does over the next year. I wouldn't rule out a reprise of this bid at some point down the line... but I wouldn't put a lot of money on that happening.

[YmoBeThere]

It'll be interesting to see what both stock prices do on Monday;

My initial guess in YHOO down, MSFT up. If/when YHOO goes back under $19 Jerry and Dave will have some explaining to do!

[billybreen]

Well, maybe not if you are a Yahoo! shareholder. No other deal appears viable and the market was saying before the bid we really don't think you have anything interesting going on, thus the $19 share price before the bid. This sort of reminds me of the Hershey-Wrigley's takeover attempt of 2002. In attempt to maintain the status quo, HSY has destroyed millions of dollars of shareholder value.

I'm not speaking from a financial perspective but in regards to the technology, positioning, and culture of each. I've worked professionally with both organizations, and while I think they each have some nice strengths, it's hard to imagine any scenario where the combination of the two wasn't a significant step back for both.

The real winner in all of this is Google. Yahoo and Microsoft just expended a few months of energy and distraction on this, with the net result likely being some sort of advertising sharing deal between Google and Yahoo (assuming they can figure out something that will pass regulatory muster).

[billybreen]

My initial guess in YHOO down, MSFT up. If/when YHOO goes back under $19 Jerry and Dave will have some explaining to do!

Good call. Down 20% to 22 before the open.