Microsoft Bids For Yahoo ~ $44.6Billion ~ REJECTED - Print Topic

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Deal eyed to topple Google
Microsoft makes $42B bid to buy struggling Yahoo
BY MICHAEL LIEDTKE The Associated Press

    SAN FRANCISCO — Unable to topple Google Inc. on its own, Microsoft Corp. is trying to force crippled rival Yahoo Inc. into a shotgun marriage, with a wager worth nearly $42 billion that the two companies together will have a better chance of tackling the Internet search leader.
    Microsoft’s audacious attempt to buy Yahoo, spelled out in an unsolicited offer announced Friday, shows just how much Google threatens the world’s largest software maker’s grip on how people interact with computers.
    For Yahoo, the bid represents
another painful reminder of how missed opportunities and mismanagement combined to open the door for Google to supplant it as the Internet’s main gateway, decimating its stock price in the process.
    Redmond, Wash.-based Microsoft is trying to avoid a similar fate at Google’s hands as more people access services and computer programs online instead of relying on packaged software applications.
    Although Microsoft remains the world’s most valuable technology company, its position will become more precarious unless it can cultivate a more loyal Internet audience and generate more online ad rev- enue to subsidize the free services taken for granted on the Internet.
    Microsoft is acutely aware of the upheaval that can be caused by a pivotal shift in technology, having been the biggest beneficiary during the 1980s and 1990s of a transition from mainframe computers to personal computers that knocked IBM Corp. off its pedestal.
    “Microsoft has to do this deal. It’s a battle that Microsoft needs to win,” said AMR Research analyst Jonathan Yarmis.
    But there’s no guarantee that Yahoo will be willing to sell to Microsoft — or that the deal will win the necessary approvals from antitrust regulators in the United States and Europe if Yahoo capitulates.
    Sunnyvale-based Yahoo had little to say Friday beyond a terse statement assuring its shareholders that its board will “carefully and promptly” study the bid.
    In a conference call Friday, Microsoft Chief Executive Steve Ballmer indicated he won’t take no for an answer after Yahoo rebuffed takeover overtures a year ago.
    “This is a decision we have — and I have — thought long and hard about,” Ballmer said. “We are confi - dent it’s the right path for Microsoft and Yahoo.”
    Yahoo will likely face intense pressure to accept, given its steadily sliding profits and a murky 2008 outlook that caused its stock price to drop to a four-year low earlier this week.
    Microsoft’s $31-per-share offer — originally valued at $44.6 billion — represented a 62 percent premium to Yahoo’s closing price late Thursday, although it’s below Yahoo’s 52-week high of $34.08 reached less than four months ago. On Friday, the total value of the cash-and-stock deal fell to $41.7 billion, or $28.95 per share, because Microsoft’s shares declined on the news.
    Yahoo shares soared to a split-adjusted high of $118.75 in 2000 before the dot-com bust. That peak coincidentally also was just before Yahoo gave Google its first big break by hiring it to run its search engine.
    Search engines are crucial tools because they have become a central hub in hugely profitable ad networks.
    Advertisers around the world are expected to double their spending on the Internet during the next three years as more people get their news and entertainment on the Web instead of television, radio, newspapers and magazines. The trend is expected to create an $80 billion online ad market in 2010, up from an estimated $40 billion last year.
    After realizing how much money Google was making from search, Yahoo introduced its own technology in 2004, but by then it was too little, too late.
    Forrester Research analyst Charlene Li expects Yahoo to resist, predicting the company “will do everything possible to stay independent,” even if it means swallowing its pride and rehiring Google to run its search engine and sell ads on its site.
    Other analysts still think Yahoo might try to line up a white knight rather than fall into Microsoft’s clutches. Analysts mentioned several other potential suitors, including News Corp. and Inter-ActiveCorp.
    Dinosaur Securities analyst David Garrity even thinks it’s possible that China’s search leader, Baidu.com  Inc., or Chinese e-commerce conglomerate Alibaba.com  Inc. might bid for Yahoo. Alibaba.com  is 40 percent owned by Yahoo.
    In what most analysts regard as a long shot, there was even some chatter that longtime Microsoft rival Apple Inc. and its CEO, Steve Jobs, might come to Yahoo’s rescue.
    If push comes to shove, most analysts believe Microsoft will raise its cash-and-stock bid.

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Microsoft-Yahoo deal? ‘Troubling’
BY MICHAEL LIEDTKE The Associated Press

    SAN FRANCISCO — Google Inc. raised the specter of Microsoft Corp. using its proposed $42 billion acquisition of Yahoo Inc. to gain illegal control over the Internet, underscoring the online search leader’s queasiness about its two biggest rivals teaming up.
    The critical remarks, posted online Sunday by Google’s top lawyer, represented the Mountain View-based company’s first public reaction to Microsoft’s unsolicited bid for Yahoo since the offer was announced Friday.
    “Microsoft’s hostile bid for Yahoo raises troubling questions,” David Drummond, Google’s chief legal officer, wrote. “This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.”
    Google’s opposition isn’t a surprise, given that Microsoft views Yahoo as a crucial weapon in its battle to gain ground on Google in the Internet’s booming search and advertising markets.
    Redmond, Wash.-based Microsoft has been trying to depict a Yahoo takeover as a boon for both advertisers and consumers because the two companies together would be able to compete against Google more effectively.
    But Google is painting a starkly different picture, asserting that Microsoft will be able to stifle innovation and leverage its dominating Windows operating system to set up personal computers so consumers are automatically steered to online services, such as e-mail and instant messaging, controlled by the world’s largest software maker.
    In a move that illustrates just how badly Google wants to torpedo the deal, Google Chief Executive Officer Eric Schmidt called Yahoo CEO Jerry Yang on Friday to offer his help in repelling Microsoft, according to a report Sunday on The Wall Street Journal’s Web site, which cited anonymous people familiar with the matter.
    The assistance didn’t include a counterbid, but may have included supporting other potential suitors, or a revenue guarantee in exchange for an ad partnership with Yahoo, the people said, according the newspaper.
    AT&T Inc., Time Warner Inc. and News Corp. aren’t planning to enter the bidding, the Journal said, citing the people familiar.
    To help make its point, Google pointed to the way Microsoft previously used Windows to help extend the reach of its Web browser and other applications — a strategy that triggered a U.S. Justice Department lawsuit alleging the software maker illegally used its operating system to stifle competition. The dispute ended with a 2002 settlement that required Microsoft to abandon some of its past practices.
    “Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” Drummond wrote.
    Brad Smith, Microsoft’s general counsel, said preventing Microsoft from buying Yahoo would undermine competition by allowing Google to become even more dominant than it already is on the Internet
    “Microsoft is committed to openness, innovation, and the protection of privacy on the Internet,” Smith said. “We believe that the combination of Microsoft and Yahoo will advance these goals.”
    If they get together, Microsoft and Yahoo would have about 16 percent of the worldwide Internet search market — still far behind Google’s 62 percent share, according to com-Score Media Metrix. But Microsoft and Yahoo already are far bigger than Google in e-mail and instant messaging, and conceivably would be in a better position to squash rival services if they combined.
    Illustrating the enormous stakes involved in a deal that could reshape the technology and media industries, Google and Microsoft are already debating the pros and cons before Yahoo has responded to the offer.
    Yahoo so far has little to say except that its board will carefully examine Microsoft’s bid — a process that “can take quite a bit of time,” according to a message posted on the Sunnyvale-based company’s Web site.

Danger-danger....those who control, or have the ability to control information control the masses along with those who control the guns and $$......there is a pyramid in use.....we are at the wide bottom.....

That Bill Gates/Microsoft owns EVERYTHING! HMMMMM....wonder if he's a dem too? Nah, Gates is smart!

It doesn't really matter who is in what party---remember: THEY ALL EAT AT THE SAME TROUGH.....they just like to control those filling the trough....

we may not farm for food but we do farm politicians.....

http://www.yahoo.com

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Yahoo board to spurn $44B Microsoft bid
By MICHAEL LIEDTKE, AP Business Writer

SAN FRANCISCO - Yahoo Inc.'s board has concluded Microsoft Corp.'s $44.6 billion takeover bid undervalues the slumping Internet pioneer and plans to reject the unsolicited offer, a person familiar with the situation said Saturday.

The decision, first reported by The Wall Street Journal on its Web site, could trigger a showdown involving two of the world's most prominent technology companies.

If it wants Yahoo badly enough, Microsoft could try to override Yahoo's board by taking its offer — originally valued at $31 per share — directly to the shareholders. If Microsoft pursued that risky route, it will likely have to nominate its slate of directors to supplant Yahoo's current 10-member board.

Alternatively, Microsoft could sweeten its bid. Many analysts believe Microsoft is prepared to offer as much as $35 per share for Yahoo, which still boasts one of the Internet's largest audiences and most powerful advertising vehicles despite a prolonged slump that has hammered its stock.

Yahoo's board reached the decision after exploring a wide variety of alternatives during the past week, according to the person who spoke to The Associated Press. The person didn't want to be identified because the reasons for Yahoo's rebuff won't be officially spelled out until Monday morning.

Microsoft and Yahoo declined to comment Saturday.

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