Battered Yahoo Admits It Overplayed Hand; Open To New Microsoft Talks(alleyinsider.com)
alleyinsider.com
Battered Yahoo Admits It Overplayed Hand; Open To New Microsoft Talks
http://www.alleyinsider.com/2008/5/battered_yahoo_caves_admits_it_overplayed_hand_now_open_to_new_microsoft_talks
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Well God, I'm surprised you like Yahoo more than Google. If that is the case, why have you been sitting up there in Heaven allowing Yahoo to get trounced all these years instead of performing some miracles and keeping it on top? At least it is finally clear that you dislike microsoft. I had suspected as much, what with your divine torpedoing of Vista and all, but it's always nice to hear it from the deity's mouth.
As for money, while your heavenly spirit may not bow down to it, shareholders definitely do. And obviously even you need money at times, or are all those tax-free offerings for nothing?
> I dont want a predictable world...
Aren't you omniscient? Surely you find it difficult to be surprised. You mind telling us all how this merger will play out?
As for money, while your heavenly spirit may not bow down to it, shareholders definitely do. And obviously even you need money at times, or are all those tax-free offerings for nothing?
> I dont want a predictable world...
Aren't you omniscient? Surely you find it difficult to be surprised. You mind telling us all how this merger will play out?
Actually, if you're the CEO of a publicly traded company, you are required by law to act in shareholders' financial interest. That's the price of getting access to the public equity market.
...and why, in hindsight, it would have been a very good idea to have voting and non-voting shares.
How much YHOO stock do you have?
Glad I closed my (relatively small) short position today then. I really didn't see MS doing a hostile takeover. There were just too many poison pills for them to swallow, and it was clear from the beginning that Yang and the board were on an ego trip. They were nuts not to sign immediately.
Reality is setting in. Which makes me think maybe it's time to go long. What do you all think?
Reality is setting in. Which makes me think maybe it's time to go long. What do you all think?
Depends on whether Yahoo is ready to grovel to get Microsoft back to the table. After all the cheap shots they've taken, I can't blame Microsoft for wanting to wash their hands of the whole thing and move on.
Edited to add: on further review, groveling is certainly overstating the case. But if Yahoo is willing to reach out and make it look like this can be a real partnership both sides are actually interested in, it will be a lot more doable.
The whole thing where they've been trying to make Microsoft look bad and act like they want nothing to do for the deal hasn't benefited anyone.
Edited to add: on further review, groveling is certainly overstating the case. But if Yahoo is willing to reach out and make it look like this can be a real partnership both sides are actually interested in, it will be a lot more doable.
The whole thing where they've been trying to make Microsoft look bad and act like they want nothing to do for the deal hasn't benefited anyone.
I don't think that's the case though. It's just part of the game. Their rationale for wanting Yahoo in the beginning probably has not changed. They just realized that going hostile wasn't really an option.
It really wasn't either. Hostile takeovers happen rarely in tech because it's really easy to create effective poison pills. I only shorted because Yahoo seemed so obstinate. They've had a bucket of cold water tossed on their heads now and are gasping for breath.
It really wasn't either. Hostile takeovers happen rarely in tech because it's really easy to create effective poison pills. I only shorted because Yahoo seemed so obstinate. They've had a bucket of cold water tossed on their heads now and are gasping for breath.
Long looks pretty decent, so long as MSFT offers a little over $33 and so long as YHOO takes it.
Or you could wait for Yahoo! to do the stock buyback...Hehe.
Or you could wait for Yahoo! to do the stock buyback...Hehe.
My only fear is that the stock didn't sink as much as I expected it to, and that may be because a good deal of people thought along the same lines. They expected Yahoo not to budge, MS to walk away, and Yahoo to come crawling back. Meaning that if Yahoo doesn't bring MS back to the table, their stock has a decent way left to fall.
Anyone else think there's too many MSFT-YHOO soap opera stories here?
When it's done, I'm sure there will be some 'negotiation hack' lessons. In the meantime, this is noise -- leaks, rumors, transient stock ticks. More appropriate for 'Daytrader News' than 'Hacker News'.
When it's done, I'm sure there will be some 'negotiation hack' lessons. In the meantime, this is noise -- leaks, rumors, transient stock ticks. More appropriate for 'Daytrader News' than 'Hacker News'.
Microsoft and Yahoo! are probably in the top 5 at purchasing startups, other than Google and Amazon.
This story has 34 upvotes and 22 comments. Someone is interested.
Sometimes, the biggest noise is the complaining about what is noise.
Sometimes, the biggest noise is the complaining about what is noise.
Sure, some people are interested. But even they may, with further consideration, wish they hadn't upvoted, commented-on or otherwise spent so much time following minutiae of the MSFT-YHOO negotiating process.
Since there are no downvotes, we don't know if >>34 people are tired of such headline-news-ticker-like microstories. But the real question shouldn't be raw vote totals, but what people want this site to be.
TechCrunch floods the zone with morning, afternoon, night updates on MSFT-YHOO, as do many other sites. And yet any one tactic or reversal in the middle of this multi-month negotiation isn't likely to have any lessons for hackers/startuppers/those-selling-their-companies-to-GYM-etc.
My comments are made in the hope that next time, some of those 34 upvotes decide to pass, so the next frivolous "Yang writes letter" or "Balmer drops new hint in internal email" story doesn't shoot to #1 in an hour or two.
Since there are no downvotes, we don't know if >>34 people are tired of such headline-news-ticker-like microstories. But the real question shouldn't be raw vote totals, but what people want this site to be.
TechCrunch floods the zone with morning, afternoon, night updates on MSFT-YHOO, as do many other sites. And yet any one tactic or reversal in the middle of this multi-month negotiation isn't likely to have any lessons for hackers/startuppers/those-selling-their-companies-to-GYM-etc.
My comments are made in the hope that next time, some of those 34 upvotes decide to pass, so the next frivolous "Yang writes letter" or "Balmer drops new hint in internal email" story doesn't shoot to #1 in an hour or two.
The title of this submission makes me sad. Business sense aside, I really prefer to live my life under the happy assumption that there are still companies out there that can go to-to-toe with MS and not blink.
There are such companies: cf. http://bits.blogs.nytimes.com/2008/05/05/how-googles-checkbo...
welcome to the desert of the real...
This is like watching no-limit holdem .. but better!
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Ouch.
I guess this is part of 'business' that I'll never understand. Why on Earth is it that Yahoo would have to bow down to MS? If you're thinking of the shareholders, wouldn't you be concerned about what MS is going to do to Yahoo (destroy it)? Is it only a (small) gain in share price that matters? Long-term potential be damned?
After years of underperforming, the shareholders saw a chance to take a stock that was selling for under $20 not that long ago and turn it into $33 or $34 a share. If you're scoring at home, that's a 65% or better increase in the value of their investment. And for options holders, there's a good chance that the price change is the difference between the options being underwater (i.e. worthless) and being worth quite a bit.
If that were your retirement fund or your stock options in your employer, wouldn't you want that money? And if you were a professional investor, wouldn't you be downright berzerk at all that money being thrown away?
Computer geeks like to go around badmouthing Microsoft all the time, but taking that attitude as a CEO or board member of a public company makes you unprofessional and irresponsible. To shareholders, Microsoft's money spends just like everyone else's.
Yahoo has underperformed for years. Sure, it has long-term potential. But investors have little reason to think the current management will realize this potential any better than the last couple of regimes. Meanwhile, as much as geeks love to hate Microsoft, they have decades of experience in producing enormous profits, and there's no particular reason to think that buying Yahoo will change that.
This isn't just short term vs. long term. This is realizing a return on investment vs. watching that return slip through your fingers. And investors are pissed.
If that were your retirement fund or your stock options in your employer, wouldn't you want that money? And if you were a professional investor, wouldn't you be downright berzerk at all that money being thrown away?
Computer geeks like to go around badmouthing Microsoft all the time, but taking that attitude as a CEO or board member of a public company makes you unprofessional and irresponsible. To shareholders, Microsoft's money spends just like everyone else's.
Yahoo has underperformed for years. Sure, it has long-term potential. But investors have little reason to think the current management will realize this potential any better than the last couple of regimes. Meanwhile, as much as geeks love to hate Microsoft, they have decades of experience in producing enormous profits, and there's no particular reason to think that buying Yahoo will change that.
This isn't just short term vs. long term. This is realizing a return on investment vs. watching that return slip through your fingers. And investors are pissed.
Here's the thing: if institutional investors truly believed that Yahoo was overplaying a weak hand, they could have sold their holdings at $28/share (or more).
These guys were gambling for a few bucks per share, just as much as Jerry Yang and the Yahoo board.
These guys were gambling for a few bucks per share, just as much as Jerry Yang and the Yahoo board.
They couldn't liquidate hundreds of millions of shares at that price. The more they tried to sell off, the lower the price would go. In the acquisition, all of the shares would be bought at that price.
Doesn't matter. If the institutional investors were so brilliantly prescient as to anticipate the failed negotiations, they could have easily profited from the knowledge. They didn't need to liquidate. Hell...simply making a public statement on the deal would have put immense pressure on Yahoo's board to sell. Where were they last week?
Point is, this stuff is largely crocodile tears. These guys weren't long because they thought Yahoo would be bought out, they were long because they saw value in the investment. Complaining now that Yahoo's negotiation strategy was somehow "irresponsible", is either massive hindsight bias, or part of some more complicated scheme....
Point is, this stuff is largely crocodile tears. These guys weren't long because they thought Yahoo would be bought out, they were long because they saw value in the investment. Complaining now that Yahoo's negotiation strategy was somehow "irresponsible", is either massive hindsight bias, or part of some more complicated scheme....
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First of all, when/if Microsoft buys Yahoo, some big shareholders wont be shareholders anymore .. they'll be cashed out.
Microsoft is offering more per share than the current share price, benefiting shareholders.
A MicroHoo has better long term prospects of competing with Google, creating additional long term value for the shareholders.
Microsoft is offering more per share than the current share price, benefiting shareholders.
A MicroHoo has better long term prospects of competing with Google, creating additional long term value for the shareholders.
> A MicroHoo has better long term prospects of competing with Google
To compete with Google they need brilliant engineers and ideas. Merging isn't going to magically produce those. About the only advantage Microsoft offers Yahoo in this is access to their desktop and a huge pile of cash that allows Yahoo to chase crazy strategies with slim chances of huge payoff, assuming Yahoo has some ideas like that. Yahoo offers Microsoft eyeballs.
To compete with Google they need brilliant engineers and ideas. Merging isn't going to magically produce those. About the only advantage Microsoft offers Yahoo in this is access to their desktop and a huge pile of cash that allows Yahoo to chase crazy strategies with slim chances of huge payoff, assuming Yahoo has some ideas like that. Yahoo offers Microsoft eyeballs.
Could we stop already with the Google worshiping? Google's days as the break-away nerd company with more brains than bucks have been over for a while. A lot of Google's "brilliant ideas" were actually pioneered at Yahoo and then made their way over to Google (this goes for recent things too). Everybody's trying to be Google's baby, but Yahoo's not exactly been a slouch in internet innovation.
I wasn't in any way trying to claim Google is the end-all-be-all of the Internet either. Sorry if the word 'brilliant' made it seem that way. I wish people would stop assuming that anything that doesn't outright slam Google implies that whoever wrote it is a fanboy. Google has a lead, and usually to overcome a lead by an established player in a market, you need to be brilliant. If you have been around here and sipped some of the startup kool-aid you would know that. I'm not even sure what "being Google's baby" means... but I'm definitely not trying to be one.
My point was that simply merging isn't going to magically create ideas and execution (good engineers). All it creates is a distraction, while the two sets of management elbow for position and a ton of employees flee.
So maybe MicroHoo doesn't need brilliant ideas and engineers, but it needs some of each, and merging isn't going to create any of either, and will most likely scare away quite a few of the great engineers that both companies already have.
My point was that simply merging isn't going to magically create ideas and execution (good engineers). All it creates is a distraction, while the two sets of management elbow for position and a ton of employees flee.
So maybe MicroHoo doesn't need brilliant ideas and engineers, but it needs some of each, and merging isn't going to create any of either, and will most likely scare away quite a few of the great engineers that both companies already have.
Sorry for the tone; there is a lot of Google fanboi-ism on HN, so my reaction was as much to the general phenomenon as your post.
I think brilliant (well, clever is usually the word I would use, brilliance is much more rare) ideas are what make 4 guys in a garage able to take on a market leader, but when you've got a merger of companies with a combined market capitalization of over $300 billion, blunt force often does the trick. This is sumo wrestling, not fencing. :-)
And in the world of blunt force, the combined forces of the most profitable company in the technology market and the most popular site on the internet could pack a pretty hefty punch. I don't think that's a particularly good strategy for MS to pursue, but I wouldn't misunderestimate them.
I think brilliant (well, clever is usually the word I would use, brilliance is much more rare) ideas are what make 4 guys in a garage able to take on a market leader, but when you've got a merger of companies with a combined market capitalization of over $300 billion, blunt force often does the trick. This is sumo wrestling, not fencing. :-)
And in the world of blunt force, the combined forces of the most profitable company in the technology market and the most popular site on the internet could pack a pretty hefty punch. I don't think that's a particularly good strategy for MS to pursue, but I wouldn't misunderestimate them.
> This is sumo wrestling, not fencing.
Very good point.
I still think big companies can fence. Granted, Amazon's market cap is only like 1/10th of that ($32 billion), but it's AWS products are fairly innovative and leading their space at the moment. So big companies can innovate, they just seem slow and totally random about it.
I guess I'm just not seeing what there is to 'blunt force' in the market. You can't force people to buy your ad space. I guess if they could demonstrate clearly more eyeballs and higher CTR than adwords, advertisers would flock... is that what you envision?
Very good point.
I still think big companies can fence. Granted, Amazon's market cap is only like 1/10th of that ($32 billion), but it's AWS products are fairly innovative and leading their space at the moment. So big companies can innovate, they just seem slow and totally random about it.
I guess I'm just not seeing what there is to 'blunt force' in the market. You can't force people to buy your ad space. I guess if they could demonstrate clearly more eyeballs and higher CTR than adwords, advertisers would flock... is that what you envision?
Big companies can innovate, but the whole MS / Yahoo debacle seems to be about a clash of titans in entrenched spaces.
MS has a bigger warchest than Google and with the combined MS / Yahoo they'd have more eyes too. They could run that segment of their market at a loss for a while to try to steal some of Adwords' thunder. Think of MS's entrance into the game console or MP3 player markets. While, again, I don't think it's a great strategy to plow into entrenched markets like that, compared to creating new markets (a la your Amazon example), MS has certainly demonstrated a willingness to do so. In fact, I'd say that's almost they corporate modus operandi; almost their complete history has been bulldozing their way into markets using sheer brawn.
MS has a bigger warchest than Google and with the combined MS / Yahoo they'd have more eyes too. They could run that segment of their market at a loss for a while to try to steal some of Adwords' thunder. Think of MS's entrance into the game console or MP3 player markets. While, again, I don't think it's a great strategy to plow into entrenched markets like that, compared to creating new markets (a la your Amazon example), MS has certainly demonstrated a willingness to do so. In fact, I'd say that's almost they corporate modus operandi; almost their complete history has been bulldozing their way into markets using sheer brawn.
Share holders buy and sell in the short term.
However, when Yahoo! stock gets bought by MS, it becomes MS stock. MS stock is worth more (I presume,) so the stock rises in value. Even if MS liquidates everything Yahoo! had, the stock remains MS stock. Stock is a share of the company. It isn't tied to any particular assets.
However, when Yahoo! stock gets bought by MS, it becomes MS stock. MS stock is worth more (I presume,) so the stock rises in value. Even if MS liquidates everything Yahoo! had, the stock remains MS stock. Stock is a share of the company. It isn't tied to any particular assets.
When stock is bought, it becomes money. If there's a stock swap, then it becomes MS stock.
Yes, I rethought my statement this morning and slapped myself on the head, but by then the edit button had disappeared and didn't feel like replying to myself.
Yahoo is a legend and runs a couple of interesting websites and keeps doing new stuff here and there. I like that. I want that to continue. I dont want them to be swallowd by a company that I dont like.
And about the money... its only money. Do we all HAVE TO bow down to the dollar and each and every day go the path of the most money? No. I dont. Im free. And everyone who says Jerry HAS TO because he is the CEO of a public traded company has simply been proven wrong. How cool is that? I dont want a predictable world where everything is based on pennies. Lets celebrate some rebellion ;-)