Microsoft to buy Yahoo

[justgofaster]

Microsoft has offered $44.5 billion to buy search engine giant Yahoo. The bid is equal to $31 per share, a 62% premium over Yahoo's closing stock price yesterday.

Yahoo shareholders rejected an offer from Microsoft last year, largely on the grounds that Microsoft seems to ruin everything it touches. Yahoo shareholders had hoped to improve the company's performance with their own business plan. Microsoft chairman Steve Ballmer, however, points out that Yahoo has not improved its competitive situation over the past year.

Yahoo shareholders will be given the option of accepting compensation in the form of Microsoft common stock or cash. The deal is not subject to financing, as Microsoft has sufficient cash on hand to finance the acquisition.

Yahoo has fallen steadily behind rival Google in internet search utilization. Yahoo plans to lay off 1,000 workers in mid February, in part due to the developing American recession. Microsoft's acquisition of Yahoo is expected to be completed before the end of 2008.


http://money.cnn.com/2008/02/01/technology/microsoft_yahoo/?postversion=2008020108

 

[justgofaster]

I suppose this means I'll need to get a new email provider. Hotmail never did work right after MS bought them.

 

[chatolandia]

does google has chat?

 

[chatolandia]

Then, it is time to start the move!!!

 

[davy]

Innovation through acquisition.

that's the microsoft motto.


.... strangely enough, it's also how the borg operates.

 

[mike_n_herrin]

/\ you said borg. ...sounds swedish.

i heard this on NPR today. I thought interesting, i bet the share holders wont pass it up.

 

[Corny]

damn .. i wish that did not happen, although it was prone to.
MS will fuck up a good company. Yahoo had great ideas in unifying web-services and so on. those are probably the first things that will die under MS since they now need to use MShite live-id and all that other crap. google on the other hand lately is getting a bit too big even for my taste. and yahoo always was a good competition for them which enriched the business.

well the deal is not done yet, there is still hope

 

[uofaguy7]

I suppose this means I'll need to get a new email provider. Hotmail never did work right after MS bought them.

yea me too, hotmail was crap when i used it, just like everything else M$ does

 

[Jannus]

Yeah, this is a bad thing. Yahoo was a small but promising competitor to Google, which is too big. Microsoft has no idea what to do with Yahoo. They are just crashing around, hoping that if they buy enough stuff that that will somehow magically save them from Google. Microsoft will destroy Yahoo, as they do everything. As Corny noted, M$ will insist on using their own crapware at Google.

This will work to Google's favor, eliminating what little competition Google does have (Yahoo represents 18% of internet searches). I'll bet they're breaking out the champaign over at Google.

Add me to the list of those who will be changing email providers. How sad. I really liked Yahoo.

 

[benlemieux2003]

//plays the Imperial March

 

[Apollo]

damn .. i wish that did not happen, although it was prone to.
MS will fuck up a good company. Yahoo had great ideas in unifying web-services and so on. those are probably the first things that will die under MS since they now need to use MShite live-id and all that other crap. google on the other hand lately is getting a bit too big even for my taste. and yahoo always was a good competition for them which enriched the business.

well the deal is not done yet, there is still hope

lol Yahoo wasnt even competition anymore. Yahoo was sinking, and sinking fast under bad business decisions and an inability to find what they really wanted to do.

Ask.com is more of threat to Google than Yahoo was this past year. Well for a few years to tell the truth.

 

[Jannus]

^ That's exactly the point. Yahoo can't possibly help Microsoft. Yahoo is an innovative company which might possibly have slowly built market share against Google. Now that it will soon be owned by Microsoft, all hope is lost. Yahoo is now dead, and will soon disappear into the abyss, without having helped Microsoft one iota. In fact, this is going to hurt Microsoft, since it will further strengthen Google.

What a waste.

 

[Apollo]

^ That's exactly the point. Yahoo can't possibly help Microsoft. Yahoo is an innovative company which might possibly have slowly built market share against Google. Now that it will soon be owned by Microsoft, all hope is lost. Yahoo is now dead, and will soon disappear into the abyss, without having helped Microsoft one iota. In fact, this is going to hurt Microsoft, since it will further strengthen Google.

What a waste.

I was listening to Buzz Out Loud today, and they talked about the merger. The speculate that this is Microsoft gearing up the go more into media and stuff. You know like selling movies and music online and alot of extra stuff.

I mean before the AppleTV 2, there was the Xbox 360 store.

 

[justgofaster]

^ Here are the four "reasons" Microsoft has given for their acquisition of Yahoo:

* Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

* Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

* Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

* Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

http://blogs.zdnet.com/Burnette/?p=518&tag=nl.e589

If you analyze each of the reasons carefully, it's clear that they are just nonsensical gobbledygook. The reasons aren't reasons, they're just talking points to feed the press. Microsoft has no idea what to do with Yahoo once they get them, even though they've been pursuing Yahoo for years!

Economies of scale? What scale? As you've pointed out, Yahoo is relatively small. Microsoft is huge. "This combination enables synergies related to scale economics..." "This includes synergies across both search and non-search related advertising that will strengthen the value proposition..." The words actually make little sense. And whenever a business person uses the word "synergy", you can be sure he's feeding you BS.

Expanded R&D? Like, MS doesn't already have by far the biggest software R&D in the world? And Yahoo is going to expand that importantly?

Operational efficiencies? Redundant infrastructure? Aren't they going to pay the ex-Yahoo people and provide them with office space? Surely there can't be much in the way of savings here. And isn't point #3, "operational efficiencies" exactly the same as point #1, "economies of scale"?

Emerging user experiences? WTF is that? "Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced." Another nonsense statement. It comes very close to saying absolutely nothing at all. I would contend it does say nothing at all. And again, aren't points #2 and #4 really the same thing?


When AT&T acquired NCR in September 1991, the two companies held a press conference in Dayton, Ohio (NCR's headquarters). A Dayton reporter asked AT&T's CEO Robert Allen if he could name even one high technology merger in the prior ten years which had been successful. Allen couldn't. The CEO of AT&T couldn't name even a single high technology merger between 1981 and 1991 which had succeeded! And yet he was pushing AT&T's hostile acquisition of NCR hard, certain in his mind it was the right thing to do.

Yes, that was 16 years ago, but the same holds true today. Mergers of technology-based companies rarely work out. The reasons for this are complicated and varied, but the same holds true today. (Remember the "dream" merger of AOL and Time Warner?) Such mergers rarely succeed, and Microsoft has demonstrated particular incompetence in this area. Microsoft is very, very good at making money in a monopoly market. But they are very, very bad at merging companies into the Microsoft fold. Yahoo is doomed.

Oh, and AT&T/NCR? After having thoroughly destroyed NCR, AT&T admitted the merger had been a mistake. In 1997, they spun NCR off as a separate and independent corporate entity again. NCR is now a tiny fraction of its former size.

 

[Apollo]

^ Here are the four "reasons" Microsoft has given for their acquisition of Yahoo:




If you analyze each of the reasons carefully, it's clear that they are just nonsensical gobbledygook. The reasons aren't reasons, they're just talking points to feed the press. Microsoft has no idea what to do with Yahoo once they get them, even though they've been pursuing Yahoo for years!

Economies of scale? What scale? As you've pointed out, Yahoo is relatively small. Microsoft is huge. "This combination enables synergies related to scale economics..." "This includes synergies across both search and non-search related advertising that will strengthen the value proposition..." The words actually make little sense. And whenever a business person uses the word "synergy", you can be sure he's feeding you BS.

Expanded R&D? Like, MS doesn't already have by far the biggest software R&D in the world? And Yahoo is going to expand that importantly?

Operational efficiencies? Redundant infrastructure? Aren't they going to pay the ex-Yahoo people and provide them with office space? Surely there can't be much in the way of savings here. And isn't point #3, "operational efficiencies" exactly the same as point #1, "economies of scale"?

Emerging user experiences? WTF is that? "Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced." Another nonsense statement. It comes very close to saying absolutely nothing at all. I would contend it does say nothing at all. And again, aren't points #2 and #4 really the same thing?


When AT&T acquired NCR in September 1991, the two companies held a press conference in Dayton, Ohio (NCR's headquarters). A Dayton reporter asked AT&T's CEO Robert Allen if he could name even one high technology merger in the prior ten years which had been successful. Allen couldn't. The CEO of AT&T couldn't name even a single high technology merger between 1981 and 1991 which had succeeded! And yet he was pushing AT&T's hostile acquisition of NCR hard, certain in his mind it was the right thing to do.

Yes, that was 16 years ago, but the same holds true today. Mergers of technology-based companies rarely work out. The reasons for this are complicated and varied, but the same holds true today. (Remember the "dream" merger of AOL and Time Warner?) Such mergers rarely succeed, and Microsoft has demonstrated particular incompetence in this area. Microsoft is very, very good at making money in a monopoly market. But they are very, very bad at merging companies into the Microsoft fold. Yahoo is doomed.

Oh, and AT&T/NCR? After having thoroughly destroyed NCR, AT&T admitted the merger had been a mistake. In 1997, they spun NCR off as a separate and independent corporate entity again. NCR is now a tiny fraction of its former size.

Economies of scale makes sense. Yahoo has a powerful and more realized ad platform that Microsoft. Microsoft is still mostly just a software company. Yahoo also contains the people who know how ad platforms work and the would be incredibly powerful with them. It's all economics.

Your assuming because Microsoft is such a huge company, they can pretty much do what they want and need instantly, but starting the R&D and hiring the people that Yahoo already have would take years and lots of money. By simply acquiring Yahoo, they have the infrastructure and people already there to do whatever Microsoft is planning.

This is why any company buys up another company. Instead of trying to do it yourself and getting it wrong, why not just buy up this smaller company which already does what we want to do.

 

[Centurion]

lol Yahoo wasnt even competition anymore. Yahoo was sinking, and sinking fast under bad business decisions and an inability to find what they really wanted to do.

Ask.com is more of threat to Google than Yahoo was this past year. Well for a few years to tell the truth.

This is why any company buys up another company. Instead of trying to do it yourself and getting it wrong, why not just buy up this smaller company which already does what we want to do.

Ummmmm....which is it? Yahoo was getting it wrong and "sinking fast" because they don't know how to compete; or Microsoft buying up Yahoo because Yahoo knows so much about how to compete against Google and can help Microsoft?

Microsoft couldn't figure out how to beat Google on their own, so they're buying Yahoo, which also (apparently) can't figure it out, either. Apparently, Microsoft believes two bad ideas make a good one. And, in any case, the new company will operate so astonishingly efficiently that that will draw advertising money, even without the network traffic the advertisers want. This is a great business plan.

Microsoft is making a major, major mistake here. It is interesting that everyone (including Yahoo) can see this except Microsoft.

 

[Apollo]

Ummmmm....which is it? Yahoo was getting it wrong and "sinking fast" because they don't know how to compete; or Microsoft buying up Yahoo because Yahoo knows so much about how to compete against Google and can help Microsoft?

Microsoft couldn't figure out how to beat Google on their own, so they're buying Yahoo, which also (apparently) can't figure it out, either. Apparently, Microsoft believes two bad ideas make a good one. And, in any case, the new company will operate so astonishingly efficiently that that will draw advertising money, even without the network traffic the advertisers want. This is a great business plan.

Microsoft is making a major, major mistake here. It is interesting that everyone (including Yahoo) can see this except Microsoft.

It's both. I haven't contradicted myself. Both Yahoo and Microsoft have big ad networks, and if they combined resources, than there is a real competitor to Google. Right now, because Yahoo have bad people in charge, they don't know how to run their business to be a real compettitor to Google. With Microsoft and Yahoo together, Google actually has to worry that their incredibly successful ad network will be threatened.

No one can figure out how to beat Google. That is the thing. I have no problem with Google being so big. Their company motto is "Do No Evil" and so far, they have done very little evil, and if they keep it that way, than hey I will love them forever.

I say wait a year and see what Microsoft does with Yahoo. This acquisition is no different from the many other companies Microsoft has boughten up. Or Google has for that matter.

 

[justgofaster]

I think this merger between Microsoft and yahoo will be remarkably successful. The two companies will be able to leverage positive synergies across many domains of interconnecting research. They'll manage to eliminate overlapping platforms of development, and vector common interests into synergistic energy. Emerging efficiencies will attract heightened product interest, and drive traffic omnidirectionally into new and exciting areas! Expanded capacity will enable the combined entity to scale product development more responsively, and that will effect vectorized prioritization of services, without the risk of duplication of value-driven efforts. Emerging user experience will then focus innovation into those channels in which it can most effectively be utilized.

I really don't see how it can fail!

 

[cit2mo]

ohh no!

wherever shall I play my pinochle games!

 

[pausanias_usa]

Don't forget Yahoo! preceded Google, unlike what someone mentioned earlier.

As long as Google outcompetes Yahoo!, this will be a bad deal for MS.

I've had my email on Yahoo! for well over a decade. If MS comes in, I too will be running for another provider (gmail, most likely).