5 ms·
Battered Yahoo Admits It Overplayed Hand; Open To New Microsoft Talks
- TrevorJ 18y agoThe 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.
- deleted 18y ago[deleted]
- goodkarma 18y agoOuch.
- sabat 18y agoI 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?
- astine 18y agoShare 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.
- pchristensen 18y agoWhen stock is bought, it becomes money. If there's a stock swap, then it becomes MS stock.
- astine 18y agoYes, 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.
- wanorris 18y agoAfter 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.
- timr 18y agoHere'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.
- pchristensen 18y agoThey 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.
- deleted 18y ago[deleted]
- noelchurchill 18y agoFirst 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.
- Xichekolas 18y ago> 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.
- wheels 18y agoCould 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.
- Xichekolas 18y agoI 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.
- mattmaroon 18y agoGlad 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?
- wanorris 18y agoDepends 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.
- mattmaroon 18y agoI 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.
- aston 18y agoLong 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.
- mattmaroon 18y agoMy 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.
- noelchurchill 18y agoThis is like watching no-limit holdem .. but better!
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- kyro 18y agoHow would your attitudes towards the situation change had Google been the company bidding for Yahoo? What if it was Apple, had they been in this market?
- gojomo 18y agoAnyone 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'.
- vlad 18y agoMicrosoft and Yahoo! are probably in the top 5 at purchasing startups, other than Google and Amazon.
- edw519 18y agoThis story has 34 upvotes and 22 comments. Someone is interested. Sometimes, the biggest noise is the complaining about what is noise.
- gojomo 18y agoSure, 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.
- god 18y agoI still dont understand, how the this transaction would look like technically. Say, Yahoo agrees to sell itself to MS. Then where would MS send the money to, and how would the shareholders get that money?
- mdemare 18y agoYahoo shares would be converted to MS shares + cash.
- god 18y agoI applaude Yahoo for not selling to Microsoft. 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 ;-)
- rglullis 18y agoHow much YHOO stock do you have?
- Xichekolas 18y agoWell 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?
- pchristensen 18y agoActually, 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.
- jimbokun 18y ago...and why, in hindsight, it would have been a very good idea to have voting and non-voting shares.