Yahoo Rejects Microsoft, Wants More Money
February 11, 2008 11:49 AM
Yahoo's rejection is sure to hurt for Microsoft Chief Executive Steve Ballmer, who had previously expressed great enthusiasm for the potential deal.
Microsoft loses bid for Yahoo and must choose between a fully hostile bid, a higher offer, or waiting for Yahoo to fall further on hard times
The Microsoft-Yahoo saga, which played out over the last couple weeks, began with
Microsoft making an unsolicited offer
for internet giant Yahoo. The plot thickened with the
resignation of Chairman Terry Semel
from Yahoo's board, and a
Google threat of legal action
to block the move. While many analysts considered the deal a shoe-in, initial analysis of Yahoo's willingness to accept the deal in the first place was apparently off the mark.
Inside sources had warned that CEO Jerry Yang, who held considerable sway over the final decision had been very wary of Yahoo getting digested into the Microsoft empire. These sources had called
such a development "Jerry's worst nightmare."
Perhaps they should have been heeded sooner.
In a move which had been forecast since late last week, Yahoo's board on Monday
formally rejected Microsoft's $45B bid
. The rejection made it clear that the board felt that anything less than double its stock price would be too little. Yahoo would accept an offer of $40 per share or higher, significantly more than Microsoft's offer, which equated to about $31 per share.
The statement from Yahoo's board, attacked Microsoft's offer as cheap, stating, "The board believes that Microsoft's proposal substantially undervalues Yahoo, including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments."
This contrasts Microsoft Chief Executive Steve Ballmer's valuation of the Yahoo, in which he called his company's bid "generous."
The board made it clear that its ears would be open to a higher bid from Microsoft or other investors, stating that Yahoo "is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment."
Yahoo struggles are evidenced by
and a 2008 forecast that many in the investment community considered disappointing. Some see Yahoo's move and simply a gutsy attempt to try to get Microsoft to up its offer. One thing that may stand in the way of this, though, is lack of competitive interest. After Google's criticism, it is unlikely
would field a bid, and it might not be able to even do so, due to possible violations of antitrust laws stemming from a Yahoo-Google merger. Fox owner Rupert Murdoch, known for buying up properties, has also stated that he has no interest in Yahoo.
As no one else has showed much interest in struggling Yahoo, Microsoft may feel little need to rush, and may alternatively choose to sit back and wait like a vulture circling a tired beast, ready to strike when Yahoo's circumstances make it more willing to deal.
Another possibility that remains is that Microsoft could make a fully hostile bid and bring its offer directly to Yahoo's shareholders, attempting to outmaneuver the board. Such a move might work, but would risk seriously damaging its future prospects, if it was rebuffed.
rejected a Microsoft bid in 2006 and 2007 in private talks
, but this offer was Microsoft's first public bid; and also its first public rejection. Microsoft refused to comment, so its next move is anyone's guess. Microsoft, though, had previously made it clear that it considered the move an essential step for both companies, stating, "Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers and publishers."
With the prospect of such an alliance evaporating almost as quickly as it was born, the news is surely a disappointment to Microsoft's leadership.
“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith
Google Reinvents the Boring Old Search
February 7, 2008, 1:20 PM
Microsoft May Borrow For Yahoo Deal, Talks Still Heating Up
February 6, 2008, 10:51 AM
Google Plans To Fight Microsoft-Yahoo "Monopoly"
February 4, 2008, 10:37 AM
Yahoo Chairman Resigns, Microsoft Bid Offering Heats Up
February 1, 2008, 11:51 AM
Microsoft Offers to Buy Yahoo for $44.6 Billion
February 1, 2008, 10:00 AM
Science & Environment
February 20, 2017, 6:37 AM
The USA’s newest weather satellite sends first photos.
January 24, 2017, 6:41 AM
Netflix took a decision to invest in original content
January 19, 2017, 7:00 AM
Amazon Airborne Fulfillment Center – Your Merchandise Drop-Shipped from the Clouds
December 29, 2016, 5:00 AM
Amazon is experimenting with a new kind of grocery stores, Amazon Go
December 8, 2016, 5:00 AM
Google has developed Deep Learning Algorithm to detect Diabetic Eye Disease
December 4, 2016, 5:00 AM
Most Popular Articles
Comparison – Samsung Galaxy TabPro S Vs Microsoft Surface Pro 4
March 21, 2017, 7:40 AM
Apple iPad – New Faster Processor and More Fun
March 22, 2017, 7:25 AM
Gigabyte GA-Z170X-Gaming G1 – Intel Thunderbolt 3 Certified Motherboard
March 9, 2017, 6:25 AM
Huawei P8 Lite 2017 – Android 7 Nougat Smartphone with Octa-Core Processor
March 8, 2017, 7:03 AM
Lenovo ThinkPad T460 - Ultra-Thin and Feather-light
March 3, 2017, 6:00 AM
Latest Blog Posts
Are you thinking of performance and speed? Intel claims:
Mar 25, 2017, 7:45 AM
Apple buys an automation app called Workflow. The deal was completed today and brings the app along with its developers.
Mar 23, 2017, 7:35 AM
Apple Announces new color for iPhones and iPads
Mar 22, 2017, 7:45 AM
Instagram: You Can Now Save Live Videos For Later
Mar 21, 2017, 7:49 AM
Samsung Galaxy S8 to Get New Color Scheme
Mar 20, 2017, 7:45 AM
What else to worry about?
Mar 17, 2017, 6:45 AM
Icon of the Day: Intel/ NVIDIA or Mobileye
Mar 16, 2017, 6:15 AM
JUST IN - Twitter Hijacked : High-Profile Account Accesses
Mar 15, 2017, 7:07 AM
Mar 14, 2017, 7:30 AM
News and Tips
Mar 13, 2017, 6:30 AM
iPhone 8 – May Not Get Curved Screen
Mar 11, 2017, 8:00 AM
California paves way to self-driving car tests without humans
Mar 11, 2017, 7:18 AM
Smart Machines V hackers
Mar 10, 2017, 7:00 AM
Uber Can Resume Autonomous Car Testing in California
Mar 9, 2017, 6:50 AM
Mar 8, 2017, 7:09 AM
Mar 7, 2017, 8:45 AM
World news 3-6
Mar 6, 2017, 5:40 AM
Mar 4, 2017, 7:40 AM
Mixed News of the Day
Mar 4, 2017, 6:32 AM
Jaguar Land Rover invests in ride-sharing
Mar 3, 2017, 7:00 AM
Mixed News of The World:
Mar 2, 2017, 7:02 AM
World New 3-1
Mar 1, 2017, 6:30 AM
More Blog Posts
Copyright 2017 DailyTech LLC. -
Terms, Conditions & Privacy Information