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.
"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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
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
Google plans ultra-fast wireless Internet for Research Triangle Park, N.C.
August 12, 2016, 6:30 AM
Twitter Senior VP: "Diversity is Important, But We Can’t Lower the Bar"
November 9, 2015, 9:59 AM
CNN Resorts to Internet Censorship to Promote Clinton Over Senator Sanders
October 15, 2015, 2:47 PM
Most Popular Articles
Kobo Aura One Vs Kindle Paperwhite
January 10, 2017, 1:21 AM
New at CES 2017 - Changhong 8K Super Slim TV 65ZHQ3R
January 8, 2017, 1:07 AM
OPPO R9 – The Smartphone with Excellent Camera and Long Battery Life
January 12, 2017, 12:01 AM
Are you in the market for a private antenna?
January 11, 2017, 12:01 AM
Comparison: Xiaomi Mi Mix Vs. HTC U Ultra
January 14, 2017, 12:10 AM
Latest Blog Posts
News of the Day
Jan 16, 2017, 12:10 PM
News and Technology Advancement
Jan 16, 2017, 7:58 AM
Jan 15, 2017, 12:32 AM
Here is Some News
Jan 14, 2017, 12:39 AM
News: Improved and New products
Jan 13, 2017, 12:01 AM
News around the world
Jan 12, 2017, 12:01 AM
Rumors and Announcements
Jan 11, 2017, 12:01 AM
This year CES and ridiculous gadgets
Jan 10, 2017, 12:01 AM
Nokia Android phone spurns the west.
Jan 9, 2017, 12:08 AM
New at CES 2017 - Changhong 8K Super Slim TV 65ZHQ3R
Jan 8, 2017, 1:07 AM
Debuted at CES 2017 - Vuzix Blade 3000 Smart Sunglasses
Jan 8, 2017, 12:39 AM
Some news of Day
Jan 7, 2017, 12:01 AM
News 2017 CES
Jan 6, 2017, 12:01 AM
Here is the Latest News in Tech
Jan 5, 2017, 1:47 AM
AI Beats World’s Best at Chinese board game “Go”
Jan 4, 2017, 11:21 AM
Las Vegas 2017 CES
Jan 3, 2017, 12:01 AM
News of Jan 2nd 2017
Jan 2, 2017, 4:40 AM
Wishing you all, the New Year brings the light of hope, joy, success, and Happy, Happy New Year.
Jan 1, 2017, 1:48 AM
More Blog Posts
Copyright 2017 DailyTech LLC. -
Terms, Conditions & Privacy Information