Microsoft plans to choke-hold yahoo.

[toupeiro]

He just can't take "GET OFF MAH LAWN" for an answer... Steve Ballmer needs to get flogged...

April 5, 2008
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089

Dear Members of the Board:

It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.

While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we’ve seen no indication that you have authorized Yahoo! management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.

During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.

By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.

Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.

It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.

Sincerely,


Steven A. Ballmer
Chief Executive Officer
Microsoft Corp.

[toupeiro]

And yahoo's response
Yahoo!'s Board of Directors Responds to Latest Microsoft Letter

SUNNYVALE, Calif., Apr 07, 2008 (BUSINESS WIRE) -- The Board of Directors of Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today sent the following letter to Steve Ballmer, Chief Executive Officer of Microsoft Corporation.

Dear Steve:

Our Board has reviewed your most recent letter with regard to the unsolicited proposal you made to acquire Yahoo! on January 31, 2008.

Our Board carefully considered your unsolicited proposal, unanimously concluded that it was not in the best interests of Yahoo! and our stockholders, and rejected it publicly on February 11, 2008. Our Board cited Yahoo!'s global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision.

At the same time, we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.

Since disclosing our Board's position with respect to your proposal, we have presented our three-year financial and strategic plan to our stockholders, which supports our Board's determination that your unsolicited proposal substantially undervalues Yahoo!. Those meetings with our stockholders have also provided us an opportunity to hear their views.

We have continued to launch new products and to take actions which leverage our scale, technology, people and platforms as we execute on the strategy we publicly articulated. Today, in fact, we are announcing AMP! from Yahoo!, a new advertising management platform designed to dramatically simplify the process of buying and selling ads online.

Finally, our Board has been actively and expeditiously exploring our strategic alternatives to maximize stockholder value, a process which is ongoing. All of these actions have been driven by our overarching commitment to maximize stockholder value.

Our Board's view of your proposal has not changed. We continue to believe that your proposal is not in the best interests of Yahoo! and our stockholders. Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo!. Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal.

In contrast to your assertions about the effect of general economic conditions on our business, Yahoo!'s business forecasts are consistent with what we outlined in our last earnings call. As you know, we recently reaffirmed our Q1 and full year guidance, which is a testament to our ability to perform in line with our expectations despite the current economic environment. In addition, our three-year financial and strategic plan which we have made public demonstrates significant potential upside not previously communicated to the financial markets. This plan has received positive feedback from our stockholders, further strengthening the view that Yahoo! is worth well more as a standalone company than the value offered in your proposal, and would be even more valuable to Microsoft. Your own statements have made clear the strategic importance of Yahoo!'s substantial assets and capabilities to Microsoft.

We regret to say that your letter mischaracterizes the nature of our discussions with you. We have had constructive conversations together regarding a variety of topics, including integration and regulatory issues. Your comment that we have refused to enter into negotiations to conclude an agreement are particularly curious given we have already rejected your initial proposal, nominally $31 per share at the time, for substantially undervaluing Yahoo! and your suggestions in your letter and the media that you are considering lowering the value of your proposal. Moreover, Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit.

As to antitrust, we have discussed with you our concerns. Any transaction between us would result in a thorough regulatory review in multiple jurisdictions. As a follow up to a recent meeting among our respective legal advisors we had on this topic, and at your request, we provided to you on March 28 a list of additional information we would need to further our understanding of the regulatory issues associated with any transaction. To date, you have still not provided any of the requested information.

We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction. We are confident that our stockholders understand that our independent Board is best positioned to objectively and knowledgeably evaluate our Company's alternatives and to maximize value.

In conclusion, please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value.

Very truly yours,

Roy Bostock Jerry Yang
Chairman of the Board Chief Executive Officer

[SunnyRabbiera]

heh, good return fire from Yahoo.
You know if this keeps up Linux could easily obtain a new ally

[toupeiro]

heh, good return fire from Yahoo.
You know if this keeps up Linux could easily obtain a new ally

Get out of my head! ;-) Those were my thoughts as well.

[SunnyRabbiera]

But really if they keep this up Yahoo could counter with a move to open source.
I have no idea why Microsoft has to target Yahoo like this, after all Yahoo has not really been a good supporter of open source software and seems mainly pro microsoft in most of its crap.
But hostility like this will make Yahoo change its tune, and when that happens Microsoft will loose more face then it already has...
Google has become a ally to linux already in part to crap like this, Yahoo could easily look at google and see the opportunity of linux.
In any case if Yahoo does start more linux support it will be good for us, not only will we get another company on our side but now Google might have further initiative to port more of its projects to Linux to keep up with their competitor.

[pbpersson]

What is it with Steven Ballmer that he does not understand the word NO???

No means NO and you don't then threaten a hostile takeover.

Either you offer a better price or you move on.

I mean.....am I missing something here? He doesn't sound like he has both oars in the water :confused:

[SunnyRabbiera]

Yeh really, threats like this will only chase Yahoo away from dealing with them.
It would cost Microsoft greatly if that happened, as Yahoo is a major player for them and if they are not careful Yahoo could also become a lethal enemy.
This is all because Yahoo is a competitor already, and heaven forbid anyone compete with the mighty Microsoft.
Yahoo can become an ally to us thanks to this, hey Google had a similar issue to this with Microsoft too and look what happened, Google started to become a major supporter for linux.
Microsoft cannot afford to be arrogant, with Vista not faring so well and Microsoft in question making moves like this can be suicide.

[Ripfox]

Wow this guy thinks he owns the internets...

[toupeiro]

But really if they keep this up Yahoo could counter with a move to open source.
I have no idea why Microsoft has to target Yahoo like this, after all Yahoo has not really been a good supporter of open source software and seems mainly pro microsoft in most of its crap.
But hostility like this will make Yahoo change its tune, and when that happens Microsoft will loose more face then it already has...
Google has become a ally to linux already in part to crap like this, Yahoo could easily look at google and see the opportunity of linux.
In any case if Yahoo does start more linux support it will be good for us, not only will we get another company on our side but now Google might have further initiative to port more of its projects to Linux to keep up with their competitor.

Ballmer is a total radical loose cannon who has absolutely no sense of himself or how negatively his actions are reflecting on his company and his partnerships. Gates threw Microsofts bloated weight around too, but never so blatently as this to a company like Yahoo (and for good or bad, Gates grew it that size). I was recently on the customer end of a "showdown" between Microsoft solutions and another big players solutions, and it truly seems to me the whole company has gone used car salesman-esque. I would love for this to be the moment Yahoo begins to embrace Open Source, but even if they don't, I want them to remain independant. What I DON'T want is Ballmers head and ego to swell any bigger by way of acquiring Yahoo!

[Ripfox]

Microsoft cannot afford to be arrogant, with Vista not faring so well and Microsoft in question making moves like this can be suicide.

But isn't that the mistake most arrogant people make right before their demise? Being pig-headed comes as second nature. Out-dated, worn-out, yesterday's news...they are in for a hard fall.

[SunnyRabbiera]

Ballmer is a total radical loose cannon who has absolutely no sense of himself or how negatively his actions are reflecting on his company and his partnerships. Gates threw Microsofts bloated weight around too, but never so blatently as this to a company like Yahoo (and for good or bad, Gates grew it that size). I was recently on the customer end of a "showdown" between Microsoft solutions and another big players solutions, and it truly seems to me the whole company has gone used car salesman-esque. I would love for this to be the moment Yahoo begins to embrace Open Source, but even if they don't, I want them to remain independant. What I DON'T want is Ballmers head and ego to swell any bigger by way of acquiring Yahoo!

well even if they dont seem to embrace open source right away, they still might look into it if this goes on.
so far Yahoo has been one of the biggest factors in Microsoft's popularity, mainly YIM that currently is microsoft only.
But this can change, they can get interested in other operating systems now.
Our best move right now is to show Yahoo our support and give them credit for defying Microsoft...
Sure currently Yahoo's Linux support isnt that great but if we show them we appreciate them wanting to stay independent then maybe they will embrace the open source community better...
We may even want to get the apple community into this, together we can let Yahoo know that we support them in their efforts to obstruct Microsoft's efforts to buy them out.

[runningwithscissors]

heh, good return fire from Yahoo.
You know if this keeps up Linux could easily obtain a new ally

Except, this has nothing to do with Linux, open source or any of that stuff.

[smoker]

yahoo knows what happened to the dinosaur, imo, they see no good getting into bed with the modern day business equivalent!

[ice60]

Get out of my head! ;-) Those were my thoughts as well.

what do you both mean? yahoo might switch from bsd to linux? why?

[Bungo Pony]

Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal.

*points and laughs at Microsoft* :lolflag:

You know, it's arrogance like this that makes me WANT to pirate Microsoft's OSes. Nobody likes an *******, and Microsoft is embracing that attitude which will only push people and companies away from them and their products.

And I love how Yahoo used "proper terminology" to call Steve Ballmer an *******:


We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction.

[SunnyRabbiera]

Except, this has nothing to do with Linux, open source or any of that stuff.

Yes but it could, as I mentioned Yahoo has been pro Microsoft for some time now and this can change that idea.

[toupeiro]

what do you both mean? yahoo might switch from bsd to linux? why?

We are both talking about increased potential with new and different motivators for a very large company almost exclusively proprietary in their software offerings to embrace the Linux and/or Open Source community. There is a very apparent commonality now between Yahoo and many open source companies and OSes: The full value of their offerings and the desire to interoperate with the best interests of those with stake in said offerings. For linux, that is productive and intellectual stake moreso than financial to its community and developers, for Yahoo that is productuve, intellectual, AND financial stake for its shareholders, which could be one in the same with the Linux community. Not to say there is no financial stake to lose in Open Source and Linux, but its primary driver is not profit. However, That model is still supportive of Yahoo's current less-than-open model. If I were yahoo, I would not be jumping at any more opportunities to collaborate with Microsoft if they are targetting their company in this fashion.

[SunnyRabbiera]

Yes, and even though Yahoo itself runs its stuff on BSD servers and junk so far they have not supported it back...
this can change that as what is good for BSD is good for us.

[Hendrixski]

I don't think Microsoft is going to port everything at Yahoo to Windows if they were to successfully acquire it. They're just trying to capture the advertising revenue to compete with Google.

Once that happens maybe they'll start trying to infect Yahoo's platform.

[toupeiro]

Probably total coincidence, but the screenshot on Yahoo!'s help page does not look anything like IE or MS...

http://help.yahoo.com/l/us/yahoo/helpcentral/

I bring it up just because its a fun prospect with communique going out between the two companies like this:

[hkgonra]

Couldn't Microsoft just buy all the stock and be down with it ?

[SunnyRabbiera]

Probably total coincidence, but the screenshot on Yahoo!'s help page does not look anything like IE or MS...

http://help.yahoo.com/l/us/yahoo/helpcentral/

I bring it up just because its a fun prospect with communique going out between the two companies like this:

Yeh that looks like Safari, but who knows how long thats been there.

[Chame_Wizard]

if Yahoo fail,all workers go to Google or FOSS:lolflag:

[toupeiro]

Couldn't Microsoft just buy all the stock and be down with it ?


To buy all their stock, stakeholders would have to be willing to sell off their shares. Based on Ballmers communication, he is pretty much saying Microsoft is not above this kind of hostile attempt, curcumventing the board of directors whose responsibility is to act in the best intrest of the stakeholders. However, what message does that send to all Microsoft partners? What level of business ethic and respect does that show to the Yahoo board AND yahoo stakeholders?! This is very thin ice for Microsoft to be stomping on...

[KiwiNZ]

I am not sure if the Yahoo board are acting in the best interest of the shareholders.
Given the current economic climate and the fiscal forecasts the current offer by Microsoft shapes up well.

Also boardroom wars are not for the faint hearted , of course Steve Balmer is coming on hard , that is what he is paid to do . He is not there to say" Please please Mr yahoo ,please be a nice man and give some yahoo,coz I would really really like some"

[ice60]

Yes, and even though Yahoo itself runs its stuff on BSD servers and junk so far they have not supported it back...
this can change that as what is good for BSD is good for us.
oh ok, i thought yahoo bought all freebsd's hardware and paid some of the bsd devs to work on freebsd as well as paying for their expenses for bsd conferences and generally help fund freebsd. i tired to look it up, but can't really find anything apart from a couple of old posts.

i don't really follow what's going on at companies like yahoo, google, MS etc, but i'd think the only reason MS would want yahoo is to make back some ground on google.

i don't know his name, but the person who was put in charge of yahoo took the company in the wrong direction, they spent millions buying companies that weren't making money hoping to find a way to generate profits, everything they did was wrong and they now have to get rid of a big chunk of their employees and their financial record is really bad!. he's gone now and one of the founders is back in charge i think.

i remember reading somewhere that yahoo would be the second bsd company MS has bought, maybe the first was hotmail??

i personally like bsd and linux equally, so i'm happy seeing bsd doing well and wouldn't want linux to benefit from anything bad happening to bsd.

[klange]

Microsoft cannot afford to be arrogant, with Vista not faring so well and Microsoft in question making moves like this can be suicide.
Shh! Don't say that out loud, they'll hear you. >_>

[toupeiro]

I am not sure if the Yahoo board are acting in the best interest of the shareholders.
Given the current economic climate and the fiscal forecasts the current offer by Microsoft shapes up well.

Also boardroom wars are not for the faint hearted , of course Steve Balmer is coming on hard , that is what he is paid to do . He is not there to say" Please please Mr yahoo ,please be a nice man and give some yahoo,coz I would really really like some"

No, but he should have enough tact to represent their assertiveness without giving their company another business ethics blackeye in front of several other partners who could be next on the Ballmer shortlist to eat.

Not every company wants to be bought, be it the opinion of its board or its shareholders. In two weeks, Yahoo will have collected enough of its international market gains to see if it is in their best interests to entertain Microsoft offers or not. Unsolicited ultimatims are a little like that "FINAL NOTICE" snail spam I get in the mail. If I have no personal or vested interest to intertain your offer, GET OFF MAH LAWN!

[KiwiNZ]

Yahoo have not said no, also Yahoo is in the public domain , by way of public listed shares etc. Their lawn is therefore open

[toupeiro]

Yahoo have not said no, also Yahoo is in the public domain , by way of public listed shares etc. Their lawn is therefore open


You're right, they did not say No, we will never negotiate or come to terms, but they did say no to what Microsoft handed them as if Yahoo should be obliged to accept:

"To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value."

To this offer and ultimatim, that sounds pretty "NO" to me, as Yahoo has pointedly indicated the current offer doesn't meet their satisfaction.

[KiwiNZ]

"we will not allow you or anyone else to acquire the company for anything less than its full value."

That is not a rejection or a no , its a negotiation point .

Also given the shares are public listed shares anyone can buy them . MS is free to acquire the shares of Yahoo with or without the agreement of Yahoo's Board.

[toupeiro]

"we will not allow you or anyone else to acquire the company for anything less than its full value."

That is not a rejection or a no , its a negotiation point .

Also given the shares are public listed shares anyone can buy them . MS is free to acquire the shares of Yahoo with or without the agreement of Yahoo's Board.

oh come on dude. that is a NO, for all intensive purposes, to the 62% offer made by Microsoft 2-3 months ago, which was not the FULL VALUE yahoo is referring to. You're splitting hairs on a hairless cat. I never stated there was no mention of room for negotiation. I said Microsoft's actions, which are based on the fact that Yahoo did not move quickly on an unsolicited offer, have no tact and are hostile takeover tactics that will hurt them in the long term from a future partnership standpoint. Gates had far more tact in his business negotiations than Ballmer. I know exactly what a publicly traded company is susceptible to...

[aimran]

http://news.bbc.co.uk/1/hi/business/7339864.stm

The latest joke! :lolflag:

[W2IBC]

all i can say is lol