Microsoft and Yahoo have been rivals in Internet search for years. While
Microsoft has grown and maintained its profitability, Yahoo has seen a drop in
stock prices and a loss in market share.
DailyTech reported in February 2008 that Microsoft
made an unsolicited offer of $44.6 billion to purchase Yahoo. The $44.6 billion
offer placed a premium of 62% on Yahoo stock breaking down to about $31 per
Yahoo’s board rejected
the Microsoft offer saying that it undervalued the company. After Yahoo
rejected the offer, Microsoft moved ahead with plans
of a hostile takeover of Yahoo. The takeover made some employees within
both Microsoft and Yahoo fearful for their jobs since an overlap of positions
would be expected if the merger happens.
is reporting that Microsoft president of platforms and services
division, Kevin Johnson, sent an email to employees in his unit saying that
Microsoft will dedicate “significant rewards and compensation” to retain both
Microsoft and Yahoo employees. According to Johnson, “While some overlap is
expected in any combination of this size, we should remember that Microsoft ...
has hired over 20,000 people since 2005, and we would look to place talented
employees throughout the company as a whole. We have no shortage of business
and technical opportunities, and we need great people to focus on them."
Yahoo issued a statement earlier this week that it put generous severance
packages in place for any employees that might lose their jobs if the company
was sold. The chance of Yahoo being sold must be increasing considerably for
Yahoo to admit that such severance packages were in place already.
Reuters also reports that two pension funds have independently sued
Yahoo and its board of directors for refusing Microsoft’s offer. According to
the suit, Yahoo is pursuing other possible deals that are not as beneficial to
shareholders as the Microsoft offer.