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Steamed Microsoft CEO Steve Ballmer is ready to take on Yahoo in a proxy fight should they refuse to be assimilated into the company.
Microsoft's CEO delivers Yahoo board final ultimatum

Microsoft CEO Steve Ballmer, not typically known for being a reserved businessman, is on the verge of losing his patience with Yahoo, he announced in a letter to Yahoo's board.  Ballmer is a strong advocate of the merger, but the board despite arranging some meetings with Yahoo management and Microsoft management last month, has done little to consider the merger since rejecting Microsoft's $44.6B USD offer.

In fact the board has actively fought getting swallowed into the Microsoft empire, by acquiring additional advertising through Maven and releasing new services.  They also tried futility to broker a deal with rival Google for joint advertising.  Yahoo refuses to accept Microsoft's valuation of the company, despite the fact that it is significantly above their stock price.  Yahoo insists their company is worth substantially more.

In his letter Ballmer expressed frustration at this "limited interaction," stating that what little action the pair had was not "meaningful."  He states that this is "unfortunate."  Ballmer fumes, "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."

Ballmer writes that Yahoo has two choices -- accept the offer within three weeks and prepare for the merger in earnest or face a proxy battle in which Microsoft will seek to oust the Yahoo's board of directors and replace them with a new pro-Microsoft board.

Microsoft increasing aggression in its hostile takeover attempt seems to confirm reports by analyst that Microsoft would not raise its bid, which offers a 62 percent premium on the company.  Ballmer writes angrily, "The public equity markets and overall economic conditions have weakened considerably.  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."

Microsoft hopes to avoid a proxy battle, but is willing to enter one if necessary.  Such a battle would be costly both financially and to the reputation of Microsoft.  However, it would be particularly costly to Yahoo, which would be rocked by having its board deposed.  Ballmer states that if the terms are not met, the proxy battle will begin in three weeks.  Warns Ballmer, "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."

A Yahoo spokesman would not comment on the letter.  For the full Ballmer letter, refer here.

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Don't take this article seriously.
By Domicinator on 4/6/2008 6:06:16 PM , Rating: 5
If it's by Jason Mick and it's about Microsoft, chances are that it's highly exaggerated and unnecessarily anti-Microsoft. It's become a disturbing pattern on DailyTech, and I wish they'd put a stop to it.

RE: Don't take this article seriously.
By Nekrik on 4/6/2008 6:38:51 PM , Rating: 5
Completely agree, he's a sensationalist at best and does more damage to their reputation than the page hits are worth. Luckily most of the stories are covered in better fashion on other sites which I noe tend to frequent more often than I did before.

By dever on 4/7/2008 4:07:18 PM , Rating: 3
His main sensationalist stories tend to be about far-off technologies that are supposed to rescue us from the air we exhale and upon which plants depend.

RE: Don't take this article seriously.
By mankopi on 4/6/2008 7:48:43 PM , Rating: 5
Thank goodness someone else noticed this. I dont know if Jason has stocks with Apple because all he does is exaggerate any negatives about microsoft and ignore the positives. Read his "NEWS" about Apple, compare that with "NEWS" about Microsoft. Hey Jason, if you hate microsoft so much, you need to find another way of doing your job because it is now obvious you cannot be objective in reporting NEWS. Maybe you should focus more on OPINIONS.

RE: Don't take this article seriously.
By Domicinator on 4/6/2008 9:38:10 PM , Rating: 5
I try to call him out whenever I see one of these stories on DailyTech. I always know when I see certain headlines that I am going to click on them and see that they are written by Jason Mick. And they are almost always accompanied by a crazy picture of Ballmer. (Not that Ballmer doesn't bring that on himself.) DailyTech claims that Jason Mick doesn't even own a Mac. I call shenanigans. He writes these anti-Microsoft articles in an exaggerated way that only a Mac fanboy can write.

In the long run it doesn't matter. Apple saw a big jump in Mac sales when the Intel machines started hitting the market. Now the Windows users can have cool looking hardware while still being able to use Boot Camp to run Windows. In other words, they get the good looks without having to use Mac OS. That makes Apple just another hardware maker.

By DerwenArtos12 on 4/7/2008 3:31:04 AM , Rating: 3
You clearly haven't talked to any die-hard penguins lately if you think a macapheliac is the only type of person who could/would sensationalize a story pertaining to microsoft in a negative light.

By Quiescent on 4/7/2008 9:52:00 AM , Rating: 2
No. I think you're mistaken. Apple doesn't make their hardware. They just design what macs should looks like. Personally I think the macbooks don't look stylish at all.

Anyways. I agree. There is some biased articles here.

However, because of how Steve Ballmer is, he's my hero. He's so crazy it's funny. Steve Jobs is crazy, but he's not funny crazy.

By cochy on 4/6/2008 11:25:52 PM , Rating: 3
If memory serves he's written critically about Apple at times.

RE: Don't take this article seriously.
By kmmatney on 4/6/2008 10:21:01 PM , Rating: 5
I read the actual letter and I have to agree - they really sensationalized the article - more than they had to.

By Creig on 4/7/2008 8:39:59 AM , Rating: 4
That's exactly what I was going to say after reading the actual letter. Jason, you really need to tone it down. This is DailyTech, not The Enquirer.

By PrinceGaz on 4/6/2008 10:24:00 PM , Rating: 2
As an experienced DT reader, you should know that a few reporters or bloggers report stories biased heavily in a certain direction. Not all of them are like this, some are very fair in reporting stories.

Whilst I believe there should be a site FAQ pointing out the preference of various posters, any regular visitor already knows what to expect of them. For new visitors, it would be helpful to include a link to an unbiased third-party's short description of the author's beliefs, so they know that some people here only provide links to support one side of an argument, whilst ignoring far more links which are against it.

RE: Don't take this article seriously.
By TomZ on 4/7/2008 10:23:24 AM , Rating: 4
I've basically stopped reading DT because of unprofessional (childish) articles like this. They might be fun to write for the author, but I think they hurt DT in the long run.

RE: Don't take this article seriously.
By mondo1234 on 4/7/2008 11:40:37 AM , Rating: 2
Agreed, but it goes both ways. I noticed this is true of Jason Mick, but it has also been true of Brandon Hill (on the MS side of things). I run mixed networks, and I dont feel the need for "Cheerleading" whether its Windows, Mac or otherwise. Also, I dont feel the need for preference "Bashing" whether its Windows, Mac or otherwise.
I thought DT was a tech site, but I have been corrected that its only a blog. Its not always about the facts, but the spin the author puts on the story. I am not sure why its the "Best kept secret on the web". Fanboy sites are a dime a dozen.

By TomZ on 4/7/2008 12:04:17 PM , Rating: 4
I agree - we are looking for a flat, neutral reporting - "just the facts" as they say. No bias, no hype, etc.

But I also wonder maybe if fanboy sites get more pageviews than a neutral news site? Maybe that is the motivation?

By RMSe17 on 4/7/2008 11:28:09 PM , Rating: 3
Clearly, you haven't stopped.

Waiting Game
By Dhaval00 on 4/6/2008 3:43:25 PM , Rating: 2
Even though I am oblivious to the internal logistics, I could see why Yahoo!'s "waiting game" would piss M$ off. The economy is only going to get worse, which would mean the ~$45 billion offered by M$ would be worth more 6 months down the road than now; essentially, more money for Yahoo!'s executives. Of course, M$ would lose value if the deal keeps getting delayed.

RE: Waiting Game
By JediJeb on 4/6/2008 4:16:32 PM , Rating: 2
I haven't kept track of this but I am guessing the SEC has already approved the merger. If not wouldn't it be funny for MS to buy all that stock then the SEC say no.

RE: Waiting Game
By cochy on 4/6/2008 11:28:13 PM , Rating: 2
I don't think mergers can be approved until they actually happen?

RE: Waiting Game
By eye smite on 4/6/2008 7:07:27 PM , Rating: 3
It's just Bill letting Steve throw a temper tantrum like a child, and this is part of the reason MS is not making any happy customers lately. Don't they still have WHS to fix?

Another comparison: Star Trek
By winterwatchers on 4/6/2008 6:37:45 PM , Rating: 3
"Resistance is Futile"

By PrinceGaz on 4/6/2008 10:09:40 PM , Rating: 2
Yeah, Ballmer already knows that Yahoo will be assimilated soon. It's just a question of how long Yahoo is able to hold out asking for a better offer.

Resistance isn't just futile, but very counter productive if MS are offering a good bit more than the shares are currently worth.

By jtemplin on 4/6/2008 8:07:25 PM , Rating: 5
There is enough hot air coming out of the business world without reporting like this...seriously.

Like the caption..
Steamed Microsoft CEO

or this gem
Ballmer writes angrily, "The public equity markets

There was really nothing suggesting anger in the letter. Hes being forthright and obviously its part of "aggressive business tactics" but that doesn't mean Ballmer is going to kick down the door to their boardroom and start taking names (McBane anyone?) Can we just have the news without all the hot air, which I suggest is propagating global warming. Silencing Mick could alone save a couple ice shelfs from a water grave...

It looks as though the time is nigh...
By TerranMagistrate on 4/6/2008 10:18:46 PM , Rating: 2
For the Microsoft empire to digest Yahoo! and thus inevitably creating excrement as is natural in any digestion process.

May Microsoft's greed and ceaseless lust for more power lead to their downfall.

By cochy on 4/6/2008 11:30:13 PM , Rating: 3
Greed has absolutely nothing to do with this at all. This is purely a defensive move to counteract Google. If Google is left unchecked in Search they will eventually move into Microsoft's core businesses with, if history is any indication, success.

This proposed acquisition is as stupid as.....
By kilkennycat on 4/7/2008 2:46:09 AM , Rating: 2
.. AMD's acquisition of ATi. Just as with that disastrous ATi acquisition, the timing is off by about a year or so. With the looming recession, Yahoo's business will fall off markedly, while Microsoft currently sits on a huge bundle of cash - implicit recession-proofing. In about a year Microsoft could pick up Yahoo for a song. Now Microsoft will throw away that great cushion of cash -- for what ? Why not just hire away the best brains in Yahoo, and if necessary pay them handsomly to do nothing for a year or two if there is any prospect of litigation over trade-secrets? Yahoo is just a software company.. it manufactures nothing tangible. Hire away the brains and they are dead.

By MrBlastman on 4/7/2008 9:48:45 AM , Rating: 3
You can hire away the brains but you can not hire away the IP rights, trademarks, and brand usage.

So, essentially, you'd have to start from scratch. If you buy Yahoo outright, then you own everything and the next day people are visiting Yahoo's site, which is owned by you.

I don't want the merger to happen though :( I feel like it'd be selling my friends child to an army of hell-bent intergalactic empire wishing nothing more than to force everyone to submit to their will.

By appledelhi on 4/6/2008 10:03:28 PM , Rating: 2
"Tried in futility". Can't stand incorrect grammar. :)

By Squidward on 4/7/2008 2:09:33 AM , Rating: 2
I didn't even read the article at hand, I just knew it was going to have another funny pic of Ballmer again.

Pathetic MS shills
By mindless1 on 4/8/2008 11:02:08 AM , Rating: 2
It is truely pathetic how some were ganging up on the article's author. Dailytech's readership has had a disturbing pro-MS constituent, far far more biased in favor of MS and critical of any news that doesn't paint MS in a good light.

That doesn't mean an article isn't sensationalistic, but so are many of them, that's what seems to keep you, the reader, reading. It's just sad when (some of) you whine about sensationalism on a topic you don't like, but you're for it when it happens to mirror your own preconceptions or agenda. Some of us what to hear from all sides, not just what your delicate eyes can read without bleeding.

Let's face it, Steve Balmar is a raving loon and has worked himself into a frothing mess in desperate need of some anti-perspirant. That picture is exhibit A.

M$ is similar to The Galactic Empire
By wingless on 4/6/08, Rating: -1
RE: M$ is similar to The Galactic Empire
By NordicNINE on 4/6/2008 3:41:00 PM , Rating: 2
I'm not heavy into the financial scene, but shouldn't the people that own the stock be given the choice if they want to sell?
Is that what they mean by a proxy deal?
Bypass the board and go directly to the owners of the stock?

RE: M$ is similar to The Galactic Empire
By Gul Westfale on 4/6/2008 3:42:44 PM , Rating: 2
"Ballmer To Yahoo: Join Within 3 Weeks or Suffer"

won't they suffer either way?

RE: M$ is similar to The Galactic Empire
By Omega215D on 4/6/2008 6:55:52 PM , Rating: 5
Jerry Yang: Do you really expect me to give up that easily?

Ballmer: No Mr. Yang, I expect you to die.

By cochy on 4/6/2008 11:19:13 PM , Rating: 2

By quickk on 4/7/2008 4:31:56 AM , Rating: 1
You are probably right. In that case, Ballmer should have said: "Join us withing 3 weeks and suffer."

By spluurfg on 4/7/2008 10:40:05 AM , Rating: 3
"Ballmer To Yahoo: Join Within 3 Weeks or Suffer"

won't they suffer either way?

It's probably more that the shareholders will suffer. While I'd love to have whatever Jerry Yang thinks is the fair value of Yahoo, unfortunately nobody else seems to agree with him. Given that, I'd happily take MS's premium to the market price.

By elfy6x on 4/6/2008 8:43:23 PM , Rating: 2
You are correct. A proxy vote will go out to all stockholders of Yahoo. Microsoft will have already recommended new people to replace the current board members. Assuming shareholders say yes to the new people, Microsoft will then finish its takeover of Yahoo.

RE: M$ is similar to The Galactic Empire
By stburke on 4/6/2008 3:42:42 PM , Rating: 2
Worst comparison, ever.

RE: M$ is similar to The Galactic Empire
By wordsworm on 4/6/2008 10:27:23 PM , Rating: 3
I agree. Comparing it to the Borg is a much better comparison:
The Borg have become a symbol in popular culture for any juggernaut against whom "resistance is futile."

By michael67 on 4/7/2008 4:16:31 AM , Rating: 2
"Strength is irrelevant. Resistance is futile. We wish to improve ourselves. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service ours."

"I am Ballmer of Borg. Resistance is futile. Your life as it has been is over. From this time forward, you will service us."

changed Locutus to Ballmer ;-)

By maven81 on 4/7/2008 9:32:37 AM , Rating: 3
Agreed, someone completely forgot that in this online space microsoft is definitely no empire, google is. Goodle's presense on the web is several times bigger, and theyve been making inroads into microsofts territory even when it comes to OS design.
Nor are yahoo a bunch of rebels either, they are still a very big corporation, come on!

I agree that the borg is a closer metaphor if applied to google. They have slowly assimilated bits of my life, they probably know more about me then I do.

By retrospooty on 4/6/2008 4:13:39 PM , Rating: 2
Funny, I read the headline and that is exactly what I thought. LOL

By BMFPitt on 4/6/2008 6:32:49 PM , Rating: 2
Have you ever even watched Star Wars?

RE: M$ is similar to The Galactic Empire
By BladeVenom on 4/6/2008 6:55:13 PM , Rating: 2
Ballmer reminds me more of Jabba the the Hut or his pet Rancor than a Sith Lord.

RE: M$ is similar to The Galactic Empire
By theapparition on 4/7/2008 7:03:35 AM , Rating: 2
Because Ballmer reminds me more of Salacious Crumb. ;)

By marvdmartian on 4/7/2008 10:26:39 AM , Rating: 2
Actually, wouldn't the Microsoft crowd be more likely to utter something similar to "We are the BORG...."???

RE: M$ is similar to The Galactic Empire
By FITCamaro on 4/7/2008 8:41:51 AM , Rating: 4
The Linux crowd is nothing like the Jedi. The Jedi had tons of funding and flew around in bad ass ships, had cool outfits, and lightsabers. Linux guys live in their parents basements, drive around in Pinto's, and have those long, styrofoam pool toys.

RE: M$ is similar to The Galactic Empire
By Quiescent on 4/7/2008 9:46:15 AM , Rating: 3
Most of the real linux gurus have jobs that do well for them. Or they own a business. How else can they afford what they have and still have time to code the patch to a bug in linux?

Then you have the kids who use Ubuntu and think they really know something about Linux. At least I own up to not knowing crap about linux when I use Ubuntu.

I think you've mistaken the gamers for linux nerds.

By TomZ on 4/7/2008 10:21:17 AM , Rating: 2
How else can they afford what they have and still have time to code the patch to a bug in linux?

The unemployed have lots of time on their hands...

By VashHT on 4/7/2008 1:05:33 PM , Rating: 1
Nice, battle one stupid stereotype and then spit out another, makes you look really smart.

Anyway I know a lot of people at my work who game, and so do I, we all obviously have job and our own places.

Boycott MS
By wordsworm on 4/6/08, Rating: -1
RE: Boycott MS
By mcturkey on 4/7/2008 12:18:53 AM , Rating: 3
What Yahoo fans? Yahoo is only a competitor to Microsoft in the online search/advertising arena. A boycott makes absolutely no sense in this situation.

The article is overly dramatic, but Ballmer is correct that a proxy fight will occur, and Microsoft will win. Shareholders are, by and large, furious at Yahoo's board for the deal not going through. If you had something that the market acknowledged was worth $20, and you were suddenly offered $35 for it, you would want to sell for that price. As much as everyone loves to hate on Microsoft, this merger is for the best on all accounts. Google is far and away the dominant player in the online search and advertising market. Only together can Microsoft and Yahoo provide competition. Competition keeps Google on their toes. I'm inclined to believe Google will not become stagnant, but having to fight to hold market share will keep the innovations coming, and benefit end users greatly.

RE: Boycott MS
By Pudro on 4/7/08, Rating: 0
RE: Boycott MS
By wordsworm on 4/7/2008 6:59:17 AM , Rating: 2
MS never offered $35/share. They offered $17.50 + shares in MS. Here's a nice snippet from Yahoo!
Furthermore, as a result of the decrease in your own stock price, the value of your (MS)proposal today is significantly lower than it was when you made your initial proposal.
Courtesy of

Yahoo is a major threat to both Google and MS. Since it still retains the title as the world's most popular website, it also has a tremendous opportunity for success.

MS is trying to make a steal. That's what Yahoo! board members think. Yahoo is one of the big three. The last thing the Internet needs is that number to be dropped down to two.

RE: Boycott MS
By wookie1 on 4/7/2008 10:46:22 AM , Rating: 2
Yeah, unless: 1) you paid $50 for the stock and think that the market is undervaluing it (so that when it is properly valued it would be worth more), or 2) you think that it is an excellent company that would provide better returns over time than the premium you are getting now.

Also, maybe the CEO and/or board members have a bunch of stock options with a strike price above the offering. All those millions of $ would be wiped out and they would be serfs like the rest of us.

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
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