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- BUrAph, on 05/04/2008, -9/+156Official letter from Ballmer to Yang:
Dear Jerry:
After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.
I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.
I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.
In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.
Also, after giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.
We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:
• First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.
•Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.
•In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.
•This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.
•It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.
Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.
We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.
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. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.
But clearly a deal is not to be.
Thank you again for the time we have spent together discussing this.
Sincerely yours,
Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation
Source: http://www.microsoft.com/presspass/press/2008/may0 ... - Shaman760, on 05/04/2008, -18/+143Yahoo can keep on sucking all by themselves now. Joy!!
- byronne, on 05/04/2008, -10/+119Unofficial letter from Steve Ballmer to Jerry Yang:
Jerry-
We will assimilate you, eviscerate your corporate structure and become more powerful than ever. HA HA HA AHA HA!
Bite me,
Stever - controltheweb, on 05/04/2008, -17/+98In other news .. Microsoft reopens it's bid for Yahoo! Microsoft went through something similar with Hotmail all those years ago. When Microsoft wants it, it usually doesn't give up very easily.
- marksands07, on 05/04/2008, -9/+79*Watches the diggs rise as the twitter users login*
- limezor2, on 05/04/2008, -30/+99Who uses Yahoo anyway?
- dick-richardson, on 05/04/2008, -8/+76Not that many, but quite a few use Delicious and Flickr
- fatas, on 05/04/2008, -10/+70This is ***** great news for competition and capitalism.
.... and Flickr - geobay, on 05/04/2008, -3/+48Blue balls of death?
- PolarBearCa, on 05/04/2008, -0/+42Don't you know fat floats?
- mizike, on 05/04/2008, -5/+43that letter is the legal equivalent of a bitch slap.....basically he's saying they're going to go ahead and hold back while either a) yahoo's stock plummets and the shareholders start to freak out as there's no foreseeable way yahoo can increase their value to what M$ was offering, or b) they make a bunch of stupid moves which everyone realizes would more or less destroy their company.
don't be surprised if they come back around in a few months and make a significantly reduced offer.... - mephitix, on 05/04/2008, -5/+42They actually might if/when YHOO goes down to 15/share... I guess we'll find out in the next few weeks while it takes a beating.
- newbill123, on 05/04/2008, -5/+42I think this is just another negotiating tactic. Microsoft has said they still want Yahoo! but not if it costs more that $33/share.
If MSFT can walk away from the table for a week or so, the YHOO stock will tank and there will be a LOT of disappointed owners anxious for another MSFT approach. - IronTek, on 05/04/2008, -4/+38You think it's actually possible to ***** AOL up more?
Not even Microsoft is capable of that, sir! - spacecheese, on 05/04/2008, -5/+36Watch Google buy it instead.
- dnimphobic, on 05/04/2008, -15/+45Good, im tired of hearing about it. Its too bad tho that this will make Yahoo's stock sink like a fat kid without his floaties.
- sadfly, on 05/04/2008, -1/+30DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS!!!!!!!!!!!!!
- dn11, on 05/04/2008, -4/+31unofficial ballmer quote overheard today in his office "***** KILL YAHOO!!!" *$2000 chair being thrown*
- TheZorch, on 05/04/2008, -8/+35Lets face reality here folks. Yahoo's stock is going to seriously tank because of this. They're going to take a hit where it hurts and its all a part of Microsoft's strategy. I've NEVER in my life EVER saw Microsoft back down from trying to acquire another company. Microhoo will happen, its only a matter of time.
- Akaji, on 05/04/2008, -1/+27Kind of like how MS has had over 75% of the PC market for a while?
- grumpyrain, on 05/04/2008, -3/+29That has got to be one of the most reasonable statements ever to be bashed into Ballmer's keyboard.
- sinnerman, on 05/04/2008, -0/+25Apparently, most people do:
http://www.alexa.com/site/ds/top_sites?ts_mode=glo ... - ilikechaitea, on 05/04/2008, -2/+24maybe dude....but then Microsoft has never aquired anything as big as this, or for so much money....has it bitten off more than it can chew?
- inspecality, on 05/04/2008, -0/+19Actually this one is 10 minutes older.
- Kamujin, on 05/04/2008, -4/+23Yes, but MSFT got there by using unethical business tactics, not through acquisition.
- HoratioHellpop, on 05/04/2008, -5/+24What the hell does Vista have to do with this?
- mephitix, on 05/04/2008, -4/+22correction: YHOO's price is going to crash and burn on Monday
- mephitix, on 05/04/2008, -2/+18totally agree.. Monday is going to be a bloodbath for YHOO
- inactive, on 05/04/2008, -4/+19Google doesn't need Yahoo.
- dn11, on 05/04/2008, -1/+15the vast wasteland of the icy north is more well populated than you can imagine.
- tnoy, on 05/04/2008, -5/+19Its unlikely that a move like that would be approved. They'd end up with about 75% of the search market.
- rrc589, on 05/04/2008, -1/+15It's customary for many digg users to bash Vista whenever a Microsoft related topic comes up.
- synaesthesia, on 05/04/2008, -4/+18Zimbra? What the hell is that, a pokemon?
- dig1x, on 05/04/2008, -2/+15" MS has had over 75% of the PC"
MSFT has much more than 75% today. - rasmasyean, on 05/04/2008, -2/+14Billions. Don't forget the priated copies.
- gregdbowen, on 05/04/2008, -18/+30friggin' totally.
This is a negotiating posture to see if yahoo starts to freak out about how much money they might lose. They have Msoft by the balls - big bloated Windows Vista balls. - dick-richardson, on 05/04/2008, -4/+16Yahoo sure as hell doesn't need Microsoft to ruin it...it's doing a great job by itself. And it's decisions like these that exemplify Yahoo's ineptitude.
- ScotchInBox, on 05/04/2008, -3/+15Not to sound like a MrSofty hater - but I'm really glad/relieved - the world needs more diversification and competition. Just look at the mess USA has with two crappy political parties...
- Kamujin, on 05/04/2008, -9/+20I think MSFT smelled the rat and is going to let the market remind YHOO what it thinks a fair price for the company is.
MSFT is so widely hated in the blogosphere that I can see them being reluctant to take on the negative press of a hostile takeover. - seltaeb4, on 05/04/2008, -3/+14Will an enthused Microsoft shareholder enlighten us as to what Microsoft could or would even *do* with Yahoo? Why is this such a great business idea? How will this in ANY way help either Yahoo! or Microsoft, or more particularly, their shareholders?
As Dennis Miller once said about 2-for-1 offers, "Guess what? Two of CRAP -- equals CRAP! If they *really* wanted to screw you, they'd make it 3-for-1." - Ganja420, on 05/04/2008, -2/+13Hooray for monopolies! Competition holds back the business... =b
- Anator, on 05/04/2008, -5/+16Great News. The idea of Micrahoo is so disconcerting to me.
- Rogozhin, on 05/04/2008, -4/+15I didn't want to work for the behemoth, this is great news.
- poundingruvz, on 05/04/2008, -5/+16sweet. i don't have to migrate my email and web hosting now.
- PHiZ187, on 05/04/2008, -4/+15Yeah, we're all dying for a search engine monopoly, that's it.
- nikar, on 05/04/2008, -3/+14damn no yahoo search with the reliability of Vista
- Kamujin, on 05/04/2008, -6/+16Digg me down all you want. When YHOO's stock opens lower Monday, I get the last laugh.
- blakck, on 05/04/2008, -1/+11There's some sections of Yahoo that's actually pretty good. Yahoo Sports for example - they're the top rated sports site even over ESPN and SI. Yahoo Movies is decent too. It would be huge if Microsoft ended up acquiring them, as they'd have the second rated search engine and a myriad of other services. They'd still be far behind Google in all web services, obviously.
- Kamujin, on 05/04/2008, -3/+13Sorry wanted to add.
I wouldn't be surprised if MSFT uses this to help cherry pick the talent from YHOO. - fkr3, on 05/04/2008, -2/+12Uh right.... I wish I hemorrhaged money like they do.
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