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Yahoo CEO Jerry Yang  (Source: China Herald)
Yahoo CEO Jerry Yang may have fended off Microsoft, but he may face even bigger challenges tomorrow.

The Yahoo/Microsoft saga finally came to a conclusion yesterday when Microsoft CEO Steve Ballmer withdrew his company's offer to purchase Yahoo for $47.5B. Both sides expressed their frustrations with the rocky deal and both CEOs released statements yesterday.

"I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares," said Ballmer in a statement Saturday evening. "By failing to reach an agreement with us, you and your stockholders have left significant value on the table."

"This process has underscored our unique and valuable strategic position," added Yang. "With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."

Despite the differing views on the outcome of the failed marriage from the respective CEOs, the fallout is already starting to rain down from the sky -- and most of the negative attention seems to be focused on Yahoo CEO Jerry Yang.

Analysts are already stating that Yahoo's nearly 50 percent stock price surge was inflated solely due to Microsoft's interest in the company -- with Microsoft now parting ways, those gains are almost guaranteed to disappear. That would leave the company valued at roughly $30B instead of Microsoft's offering of $47.5B (taking into account the additional $5B that Microsoft offered which was rejected by Yahoo).

In a statement released yesterday, Yahoo chairman Roy Bostock firmly remarked that the company's reluctance to give in to Microsoft was done in an effort to protect its shareholders. "We remain focused on maximizing shareholder value and pursuing strategic opportunities that position Yahoo! for success and leadership in its markets," said Bostock.

Some analysts, however, don't quite see eye to eye with this assertion by Bostock. "Jerry Yang really needs to put his money where his mouth is. If he really thinks Yahoo is worth $37 [per share], then he needs to step up and buy some shares when they are in the low $20 [range]," said S & P analyst Scott Kessler. "You are going to see a lot of shareholders just throwing in the towel because they are going to realize it's going to take awhile for the stock to get back to where it was Friday."

"I am not even sure if Yahoo cares about its shareholders because they didn't show much regard for shareholders' best interests in this process,” added Darren Chervitz of the Jacob Internet Fund. "There is probably blame to go around on both sides, but I think most of it is in Yang's hands."

Yang and his team will definitely face tough waters ahead following Microsoft’s decision to bail on the offer. Yang expects Yahoo to see revenue growth in the 25 percent range for 2009 and 2010 -- a distant figure from the 12 percent growth for 2007. Should Yang expect to see such enormous growth in the coming years, his company will need more than a relationship with Google to fend off potential lawsuits from its shareholders.



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Good luck Mr. Yang.
By h0kiez on 5/4/2008 10:35:50 PM , Rating: 5
Billions in YHOO shareholder value is going to disappear in mere minutes tomorrow morning, and there are going to be a hell of a lot of pissed of people clamoring for Mr. Yang's head. Good luck dude...




RE: Good luck Mr. Yang.
By InternetGeek on 5/4/2008 10:42:58 PM , Rating: 2
He's gotta be really convinced YAHOO can make it through. Either someone told him what he wanted to hear or he knows he on to something. I'm just giving him the benefit of the doubt here.

In any case, why didn't Yahoo and Microsoft just try to work on a technology partnership instead than on a full merge? Before giving out that much money it might be better to try it out first. I wouldn't want Microsoft doing an AMD (think the ATI merger) after getting YAHOO.


RE: Good luck Mr. Yang.
By phatboye on 5/4/2008 11:41:18 PM , Rating: 4
The difference between MS and AMD is that MS can actually afford to buy Yahoo w/o resorting to unreasonable loans.


RE: Good luck Mr. Yang.
By InternetGeek on 5/5/2008 12:42:29 AM , Rating: 2
Is that so? I think I read MS would compromise most of its cash to buy Yahoo, and MS doesn't have a crystal ball that tells whether it'll be good business to buy Yahoo as well.


RE: Good luck Mr. Yang.
By TomZ on 5/5/2008 1:04:14 AM , Rating: 2
I seem to remember Microsoft saying they would secure some debt to pay for Yahoo.


RE: Good luck Mr. Yang.
By spluurfg on 5/5/2008 3:43:51 AM , Rating: 2
quote:
Billions in YHOO shareholder value is going to disappear in mere minutes tomorrow morning, and there are going to be a hell of a lot of pissed of people clamoring for Mr. Yang's head. Good luck dude...


Well the share price was only up 20% versus prior to the offer, and Yahoo had since made a fairly positive earning's report, so maybe the damage won't be so terrible. Plus there might be a short squeeze.


RE: Good luck Mr. Yang.
By 306maxi on 5/5/2008 5:46:18 AM , Rating: 2
With the markets how they are it doesn't matter. The company I worked for posted record profits in excess of their forecasts and their shareprice is still only worth half of what it used to be.


RE: Good luck Mr. Yang.
By Regs on 5/5/2008 7:20:36 AM , Rating: 2
He does kind of look like a kamikaze pilot, no?


RE: Good luck Mr. Yang.
By 16nm on 5/5/2008 8:36:09 AM , Rating: 2
He looks like a shrunken Yao Ming. That's probably why Microsoft wanted to buy Yahoo - to get their hands on that shinking laser.


how can share holder's sue.
By tanishalfelven on 5/4/2008 10:58:16 PM , Rating: 2
can some one explain this. isn't the board of directors made up of share holders. so then wasn't it a share holder decision to decline the offer ?

i am genuinely curious as to how the share holder's could have a case, and what would they argue ?




RE: how can share holder's sue.
By fk49 on 5/4/2008 11:15:40 PM , Rating: 3
I think most companies work like the democratic-republic system of the US:
The shareholders "elect" a board of directors to represent their financial interests for the company. If the board of directors fails to act for the benefit for the shareholders, then they have a case.


RE: how can share holder's sue.
By phatboye on 5/4/2008 11:44:35 PM , Rating: 2
So does that mean we American citizens can sue congress? They have never properly represented us.


RE: how can share holder's sue.
By xsilver on 5/5/2008 2:05:01 AM , Rating: 1
maybe you underestimate the number of stupid people in your district?

Inbred trailer trash family = 9 people / 9 votes / combined iq = 800
Smart "nuclear" family = 4 people / 4 votes / combined iq = 600

Trailer trash family wins by 5 votes and 200 iq points ;)


Yahoo?
By kyleb2112 on 5/5/2008 2:51:46 AM , Rating: 5
What's this "Yahoo"?
Never mind, I'll google it.




RE: Yahoo?
By BruceLeet on 5/5/2008 5:46:38 AM , Rating: 2
I see what you did there.


What a game of poker and Yahoo lost
By ChipDude on 5/5/2008 1:18:46 AM , Rating: 3
Did Microsoft play a great game of poker or what.
Jerry Yang with his ego decided to raise the pot and then Balmer folds and walks away.

Yahoo stock will drop like a rock on Monday, there will be a lot of really pissed stock holders

When you look at what the road ahead looks like their will be tons of second guessing at Yahoo that will eat it away from the insides

It was brilliant what Balmer did, completed distracted Yahoo for a while then have it run circles around itself for months if not years to come.

If Yahoo stock doesn't get to 28 bucks again soon, Jerry and the executive team will have big moral problems. Nothing will undermine a company faster then poor moral.

Briliant Steve, simply Brilliant!




RE: What a game of poker and Yahoo lost
By Jedi2155 on 5/5/2008 5:27:08 AM , Rating: 1
I don't see the moral problem in this. Unless greed is a good morality.


By tedrodai on 5/5/2008 12:53:55 PM , Rating: 2
He means morale.


?
By B3an on 5/5/2008 5:26:04 AM , Rating: 2
I've noticed that ever pic DT have on there main page at the moment has all these head of company guys holding open there arms in the exact same pose... theres this guy Jerry Yang, Ballmer, and Jobs... lol. All the same type of photo. Is the intentional? because it's looking funny.




RE: ?
By DigitalFreak on 5/5/2008 7:57:16 AM , Rating: 2
Jerry is showing how big Ballmer's head is.

"Bring hands together, squash like bug!"


RE: ?
By Brandon Hill (blog) on 5/5/2008 2:04:49 PM , Rating: 2
It wasn't intentional. I first noticed it last night when I posted this article and I then mentioned it to Kris.

We both had a good laugh :)


Good luck Mr. Ballmer
By wordsworm on 5/4/08, Rating: 0
RE: Good luck Mr. Ballmer
By npoe1 on 5/5/2008 2:59:21 AM , Rating: 1
I don’t think that Ballmer is going to be out soon, at least not for this Yahoo! thing.


RE: Good luck Mr. Ballmer
By wordsworm on 5/5/2008 5:20:49 AM , Rating: 2
It's not just the Yahoo thing, it's also the Vista thing. From an OS point of view, it's the best OS MS has ever made, yet it's gotten the worst reception since ME. Let's just say the Vista thing could very well be the thing that causes MS's board to have Ballmer walk the plank.


RE: Good luck Mr. Ballmer
By Donkeyshins on 5/5/2008 1:28:06 PM , Rating: 2
Actually, it's more that MSFT has been more-or-less flat for 7 years running contrary to overall market / sector trends. That, if anything, will cause Ballmer to get the boot. However, the probability of that is still pretty low.


some concern
By Mike Acker on 5/5/2008 8:45:31 AM , Rating: 2
i have been concerned for some time that Microsoft was more interested in catering to the needs of advertising companies than they were to insuring the security of their operating software

recent developments, particularly SP2 for XP and now UAC in Vista indicate that Microsoft has finally noticed that in plain talk it's them or the hackers.

all i have to say is it's about time. rather past time, actually

but an alliance of Microsoft with a major advertising venture? it's might be a conflict of interest: advertisers want to manipulate our machines; we'd much prefer they don't do that.




"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA














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