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- inactive, on 02/23/2008, -11/+531) The purpose of a company is to make money for its shareholders.
2) Microsoft was offering an enormous value to shareholders.
3) Given (1), then (2) should be accepted.
Oh, but what of Yahoo!'s brand? All those spouting this nonsense need to remember how often they actually check Yahoo!. People don't use Yahoo! because of their brand, they use it because they are tied into their services and/or are to ignorant to realize their search sucks. - SPThom, on 02/23/2008, -23/+62So lemme get this straight. Yahoo said no to Microsoft. I took this as basically Yahoo knowing their brand would be destroyed by MS, and they understandably didn't want to get in bed with them. Maybe others see it differently, but that's how I see it.
And now these pension funds are suing because Yahoo actually *didn't* sell out to MS? So, in this day and age, you're financially liable for making a business decision that might be based on principles rather than the big dollar sign? Yay, capitalism. - EntangledPhysx, on 02/23/2008, -15/+48I guess competition is looked down upon when the shareholders have money to make!
- cal5k, on 02/23/2008, -1/+29Yahoo, by law, has a fiduciary responsibility to their shareholders. That's why they had to go through the motions of "seriously considering" Microsoft's bid, even though it's likely that they never had any intention of giving it their rubber stamp. That's the reality of running a public company. You have a duty to your shareholders because it's a public market and the public, in trust, gave you money with which to conduct your business operations.
Now, Microsoft by no means has to have the Yahoo! board's approval. They can simply make their offer to the shareholders and probably snap up sufficient shares to do what they want. But seriously, can the conspiracy theories. This would have happened if a morgue fund had wanted to buy up an embalming company too. - inactive, on 02/23/2008, -5/+33A privately held company has no duties other than to itself. A publicly held company has responsibilities to the people who have invested in it. The CEO and Board of Directors become employees of the company instead of 'being' the company, and yes, they have a responsibility to make business deals based on what is best for the stockholders, not what is best for any other group. Microsoft made an offer well above the current market price, and it would have made a nice deal for the companies holding the stock because it would have set that new, higher value for the stock. By refusing the deal Yahoo, in effect, threw away billions of dollars of other people's money. I don't think it would have been good for the internet, but that isn't Yahoo's concern. Google has the same problem now. Some of their recent moves have seemed to fly in the face of their 'do no evil' policy. That is because that policy became null and void when they took the company public.
- pinchduck, on 02/23/2008, -0/+27You have your stakeholders confused. Why the heck would shareholders want competition? Competition benefits consumers, not shareholders.
- mattmcm, on 02/23/2008, -6/+26You might as well say "***** Microsoft", then I wouldn't have to read that drivel.
- SeekerDarksteel, on 02/23/2008, -1/+18"1) The purpose of a company is to make money for its shareholders."
And here's the problem with people's understanding of capitalism. The purpose of a corporation is NOT to make money for it's shareholders. It is to do the _will_ of it's shareholders while keeping them financially indemnified. In most cases, the will of the shareholders is of course to make money. But if Generic Corporation A's shareholders decide to take a small hit in their gross profit by, say, utilizing more environmentally friendly production methods, then not only is there nothing wrong with that, but the corporation has a duty to follow the will of its shareholders and should be sued for NOT implementing said methods. - stanleyford, on 02/23/2008, -1/+15Well...yeah. That's pretty much it exactly. Did you think the pension plans bought into Yahoo to encourage competition?
- sockpuppets, on 02/23/2008, -0/+14...because "thanks" was too hard to type.
- vertinox, on 02/23/2008, -0/+9The problem with the shareholder system is that the company is beholden to people who have no long term interest in the company actually existing in the long term. Most simply want to make a return in the next quarter, dump their shares, and move on. I suppose that is why the most successful companies have most of their shares owned by small groups of people who want rule it like dictators rather (Gates, Balmer, Jobs, and Google) and "poo-poo" any complaints the minor shareholders have. From my understanding that is one of the major reasons Google will not split their stock is to keep the voting stock in a small set of hands to prevent short term investors from forcing the next "Carly" on them and make them the next HP.
- cad455, on 02/23/2008, -4/+13Kinda makes sense. It wasn't Yahoo's decision to make, as Yahoo doesn't own Yahoo. The shareholders do. It should have been voted upon by those who own the company.
- cheekybastard, on 02/23/2008, -1/+9Just because you own a public company means you are obligated to sell it to the highest bidder? I call *****. If that were true, then this would be illegal in the US: http://en.wikipedia.org/wiki/Poison_pill
- rmxz, on 02/23/2008, -1/+9@EtherGnat: "Did Yahoo even put the issue to shareholders though?"
Yes, indirectly. The shareholders selected a board to represent them; and the board hired a management team based on their judgment that they would make the right decisions for the company.
If the shareholders want to sue someone - I suggest they sue themselves for picking a board who picked a management team that didn't do whatever they heck they're suing for; since ultimately it's their own decisions that lead to this. - EtherGnat, on 02/23/2008, -1/+9"Google" for Yahoo info. What delicious irony.
- jellygraph, on 02/23/2008, -1/+8I smell a Microsoft rat
- sockpuppets, on 02/23/2008, -5/+12drop dead?
- slackor, on 02/23/2008, -0/+7Please explain the wisdom of merging Yahoo and a Myspace (a down-trending social network getting it's ass kicked by Facebook). That's like two drowning people holding onto each other. 44 Billion was a GREAT offer from MS and Yahoo's board blew it and ***** over the shareholders. If they want to make decisions based on principle alone that's fine, but do it with a private company.
- MikedaSnipe, on 02/23/2008, -1/+8Its been law since 1919
http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_C ...
This set a precident, that a coorperations primary responsability is with the stockholders. Not the customers, not the employees, not moral values. If the decision could hurt the stockholders dividends, it can be challenged, even by minority stockholders.
In case you are wondering how mcdonalds is allowed to set up charities, thats for PR, which helps a companies profits. - lysdexia, on 02/23/2008, -0/+6In Scotland a Yahoo is an insult referring to a person of limited intellect, resoundingly stupid or liable to do something objectionable.
I can't take their pishy name seriously. - samkityoung, on 02/23/2008, -2/+8Stocks are for money and those stakeholders were in a position to get a 62 percent return on investment. If it was your pension I'm sure you'd feel the same.
- fkr3, on 02/23/2008, -2/+8Microsoft has a stack of free services on the internet and has for over a decade.
There is no "for the most part" uncensored internet. Every Yahoo service, every Google service, virtually every online service carries with it terms and conditions that explicitly censor your pretend right to say anything you want. - inactive, on 02/23/2008, -0/+6Actually I think the offer was more than the valuation of Yahoo at the moment of the takeover. So they in fact offered MORE than what Yahoo was worth IIRC.
- DaManDOH, on 02/23/2008, -1/+7This is clearly Microsoft's first volley in the proxy takeover.
- DaManDOH, on 02/23/2008, -0/+6I said it before (and even before that) and I'll say it again: after Yahoo's rejection of the offer, their stock price went up. Microsoft's went down. Where are the damages these pension plans are suing for?
This is NOT "simple business law." This move has Microsoft's (i.e. Steve Ballmer's) fingerprints all over it. - pinchduck, on 02/23/2008, -1/+7The owners of the company have a right to challenge the board of directors of a company if they suspect them of mismanagement. This includes proxy fights, recall elections, and lawsuits. The government isn't suing anyone, the shareholders are suing management. This is perfectly consistent with capitalism and has nothing to do with government intervention.
- DaManDOH, on 02/23/2008, -2/+8After Yahoo rejected the takeover, their stock value went up. i.e. Yahoo's investors made money with the business decision. Where's the damages these pension plans are suing for?
Addendum: MS stock dropped after the offer was rejected. So shouldn't ppl be suing MS for losing them money? - inactive, on 02/23/2008, -0/+6You sound like you know what you're talking about! I personally think Yahoo! is worth 10 times what Microsoft offered, no make that 20 times!!1
But those stupid number crunchers on Wall Street with their profit and loss and assets and liabilities. They don't know what it takes to run a company.
Let's join forces and create this social networking/hotel booking/free flash software sites together and dominate the world my friend! - pw378, on 02/23/2008, -0/+5Thats why the shareholders elect a Board of Directors, to make these decisions. The Board of Directors rejected the offer as too low. If the shareholders are unhappy, they can elect new representation on the Board who may decide otherwise...
- Drizzit, on 02/23/2008, -1/+6What value is that? The offering price was not a premium by any means it was barely over it's november traded prices.
The pension clearly wants to cut and run if the deal went through since the new stock would be worth near yahoo's highs of last year. If I could do the same thing right now to boost a stock to it's highest values last year and sell it during a obvious low point to buy more shares of things that were hit hard I would be doing it too.
Now I highly doubt these pensions have any controlling interest of yahoo's shares so essentially there's not a damn thing they're able to do.
Yahoo should stick to their guns and if the day traders do not like it go screw with some other stocks. - keeganspeck, on 02/23/2008, -0/+5It sucks for shareholders, but it makes you think. At this point, if you had founded Yahoo, it really wouldn't be yours anymore. You have little say in what actually goes on in the company. The people that benefit as a result of the company essentially run the company itself, with very little effort involved on their part.
Not that they don't have the right to protect their own assets, of course. - florin, on 02/23/2008, -3/+8Damn grandpas. First, they lose control of their cars and kill people on the streets. Then, they sue high-tech companies they do not comprehend.
- nitkin, on 02/23/2008, -3/+8The market quickly recognized that nothing good can come of this unholy alliance for either company and it discounted the acquisition value to $0. The acquisition would also be detrimental to the Internet which is bad for everyone, including Microsoft. It seems to me that Microsoft shareholders should be doing the suing.
- Lynxpro, on 02/24/2008, -0/+4Name one thing Microsoft acquired and improved that the company/product couldn't have done on their own?
Bungie could have remained independent, and Halo could have been a big multi-platform game. - Stroggoth, on 02/23/2008, -3/+7"So lemme get this straight. Yahoo said no to Microsoft. I took this as basically Yahoo knowing their brand would be destroyed by MS, and they understandably didn't want to get in bed with them. Maybe others see it differently, but that's how I see it."
I have been waiting for this lawsuit since the day Yahoo said No because it was dead obvious. The board CANNOT say No just because they don't like Microsoft because it is a publically owned company, and the board damaged the company by refusing a huge monetary offer that would have overvalued their company. No board can avoid liability making stupid moves like that. If you want to keep that kind of control, don't take the corporation public, then the board can avoid any kind of takeover.
Yahoo sold the company to the shareholders, and then injured the shareholders by not taking a really good offer. This is very simple business law. - inactive, on 02/23/2008, -5/+9Well, if by "influence" you mean large sums of cash not going in shareholders hands, then sure, Microsoft has a lot of "influence".
But heaven forbid the Yahoo! we hold near and dear to ourselves and grew up with gets taken over by M$.. it's not as if they're doomed by Google offering every service they provide anyway, right? Big bad M$ is going to take over everything.
Let's also not forget the purpose of a company is to make money for its shareholders... - ohplease, on 02/23/2008, -3/+7"So, in this day and age, you're financially liable for making a business decision that might be based on principles rather than the big dollar sign? "
Uh this is the basis of publicly traded stock. It always has been. Board of directors has a legal mandate to do what is the in the best interests of shareholders. This is really not new. - rmxz, on 02/23/2008, -0/+4"The responsibility of Yahoo executives is to make money for their shareholders."
No it's not. It's to do the will of their shareholders. Otherwise you're basically saying all companies should be oil companies and defense contractors.
Often shareholders want money. Often they have other concerns (environment, social good, etc) as well.
The exec's duty is to balance those. - Lynxpro, on 02/24/2008, -0/+4...and they'll be about as successful with it as they have been with their funding of SCO.
- MikedaSnipe, on 02/23/2008, -2/+6Yahoo was massively overvalued, despite what yahoo says.
Yahoo! had an assesment of their value on the same day that put them at about 1/2 of microsofts offer. Remember - negotiations and bartering are filled with bluffs and bull****.
Anyways, since they are simply negotiating I hardly see how the lawsuit is appropriate. - MikedaSnipe, on 02/23/2008, -0/+4Yahoo valued itself at (roughly) half of microsofts offer. And even if i was completely wrong, your logic still fails.
"Yahoo is worth 5 times what they offered"
"Yahoo! would be ignorant to even consider any offer that wasn't twice what Microsoft offered."
Thats right, they wouldn't be ignorent if they took an offer that valued them at 40% of what they were worth. Stop yelling random ass-pulled figures. - Makisupa, on 02/23/2008, -0/+4Actually they can't snap up the shares because Yahoo has a poison pill set at 15%. This is why microsoft is launching a proxy war.
- Sahdow, on 02/25/2008, -0/+3I wouldn't be surprised if it was actually someone from MS that suggested this lawsuit to the pension funds.
- slackor, on 02/23/2008, -0/+3Buy YHOO shares if you want to help them.
- DaManDOH, on 02/23/2008, -2/+5I said it before and I'll say it again: after Yahoo's rejection of the offer, their stock price went up. Microsoft's went down. Where are the damages these pension plans are suing for?
- binaryloop, on 02/23/2008, -1/+4It depends if you're a short-term or long-term investor. If you're short term you want your money up front. You don't care that Microsoft's takeover would kill Yahoo (as a company). You just take the money and run. Long-term investors are looking at the future potential of Yahoo as a company and think that they could be worth significantly more if they thwart Microsoft's hostile takeover. Who knows? Maybe someday they merge with Google and they're worth billions? But, you'd never find out if Microsoft took over and drove the company into the ground.
- inactive, on 02/23/2008, -0/+3Yahoo is worth 220 billion dollars?? Lets see, Yahoo is worth more than Google(160 billion dollars)??? Ahhh good, thank you for being insane and clueless in your first paragraph, it saved me reading your whole post.
- keeganspeck, on 02/23/2008, -0/+3O RLY
- HonoredMule, on 02/24/2008, -0/+3"The company also adopted new severance packages that would protect employees in the event of a Microsoft takeover, a move the lawsuit labels as a blatant effort to drive up the cost of an acquisition."
Ah, yes...how pitifully evil. How dare Yahoo protect the livelihood of its employees in the face of possible new slash-and-burn management. The spin of this article makes me suspect the directors are being punished for actually caring about the future of the company. This demonstrates how shareholder interests are such a destructive force in capitalism. They push for payout over stability and continued value to the economy and workforce. And if their short-sighted wants don't come first, they can pursue legal retribution. - digudown, on 02/24/2008, -0/+2thats why founders named the company, the considered themselves yahoo's.
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