Microsoft-Yahoo Union Would Still Be No. 2
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A combined Yahoo and Microsoft would still be the underdog in the increasingly important business of Web search if Microsoft's unsolicited $44.6 billion bid to buy Yahoo is approved by regulators and Yahoo shareholders.
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Mike Arrington is doing a great job of laying out the options for Yahoo wrt Microsoft's offer to buy them out. He's written two pieces that helped put it together for me. Mike clearly has great sources in the investment banking community and among potential buyers of Yahoo, and is actively talking with them. He's got a business lawyer's mind and, as you know I'm sure, he's spent the last few years immersed in web applications.  Bottom-line: Yahoo's three choices are: 1. Tough it out alone. 2. Sell advertising rights to Google. 3. Accept Microsoft's offer.  Mike argues that option 1 would result in shareholder lawsuits and in the end would get Yahoo nowhere because they'd end up selling to Microsoft eventually. Option 2 would enable them to pay a major cash dividend to their shareholders, making up for the lost windfall coming from Microsoft's offer. Options 2 and 3 have the risk of being rejected by government regulators.  Now, as a member of Yahoo's developer community, and generally a respector of Yahoo (is that a word) -- I say take the deal. I don't think Yahoo has ever had leadership that has been up to navigating the treacherous waters of tech industry economics and politics. At least with the Microsoft acquisition they would get one -- Ray Ozzie. He's a guy you can sit across the table from and plot something out and he can deliver. I've had many good meetings with Yahoo people, but rarely have they resulted in action. From my own selfish point of view, Microsoft owning Yahoo might mean that Ray makes more trips to the Bay Area (figuratively) and when he sits down, we can talk about new open interfaces and developer programs for Yahoo properties. I've read most of the commentary on the Yahoo deal, and the other piece that made an impression was Mark Cuban's. He says that Yahoo should accept the Microsoft deal because it would give them the breathing room they need re Wall Street. He argues that the market has always allowed Microsoft to sink resources into developing markets, and that's exactly what Yahoo needs to become the organization that it has been trying to be. Instead, the market treats Yahoo as a comp to Google, but Yahoo doesn't have the economics of Google, so that's, long-term, a losing battle.  There's one more reason I think Yahoo should sell to Microsoft -- the fatigue of the people. The company has been wobbly too long. If they don't take the Microsoft offer it's going to be a long wobbly decline and the shareholders will be right to be angry. Here's their chance to get out, it's time, so just do it.
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Executive sees opportunities despite recent challenges to its position from Microsoft and Oracle.
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The Washington Post was viewed as the front-runner to buy Slate since Microsoft put it up for auction in July. Slate will continue to be available on MSN through links on the MSN portal under a separate agreement
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Yahooâs rebuff of the $44.6 billion takeover bid raises the stakes in a battle involving two of the worldâs most prominent technology companies.
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Business & money: Online search firm Yahoo, subject to takeover interest from Microsoft, tells of rival offer from News Corp
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Microsoft is still confident of hitting its target of 100 million Windows XP Service Pack 2 (SP2) downloads by the end of next month.
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Bid activity looked likely to keep London shares buoyant on Monday following last week's move on miner Rio Tinto, and Microsoft's offer for Yahoo in the US.
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NEW YORK/SAN FRANCISCO  - Yahoo Inc  is in  talks on a possible deal with News Corp , but analysts  said an alternative was unlikely to emerge to rival Microsoft  Corp's  bid for Yahoo, now valued at $42.1 billion.
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Microsoft Corp.'s bid for beleaguered Internet icon Yahoo Inc. is a staggering sum that, if a deal goes through, will rank as one of the largest U.S. technology transactions.
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Bill Miller, star stock picker at asset manager Legg Mason Inc  which is Yahoo Inc's  second biggest shareholder, said Microsoft Corp  will have to raise its $41.6 billion takeover offer for the Internet firm.
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Most of the talk about Microsoft's hostile offer for Yahoo has focused on whether the deal could tip the scales in the battle for Internet dominance. Today, I'd like to steer the conversation to something a little more basic that almost everyone has overlooked: the numbers.
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BOSTON/SEATTLE  - Yahoo Inc's  second-biggest shareholder urged Microsoft Corp  to raise its $42 billion bid for the Web pioneer and warned Yahoo it has few options other than to accept, raising pressure for them to seal a deal.
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If you search for Yahoo Microsoft, this page is the second hit. I like that of course. It's generating a fair amount of flow, since the combination of Yahoo and Microsoft is a pretty hot topic. Keeping the topic going, I think it's pretty amazing that Microsoft wants to buy Yahoo, but then again, which of all their web efforts has captured our imagination? At least Yahoo has Flickr, and when they try something new, we all try it with them (often with not the greatest results). The rambling continues... If Yahoo is into poison pills, try this one out.  Reserve 5 percent of Yahoo's common stock for blogger options. Put us to work to find new businesses for Yahoo, ones that are relevant to our world. When we find them, reward the bloggers with a significant upside stake in Yahoo's future, not the airy-fairy kind, but real stock that we can trade. Handled properly, it could raise shareholder value by much more than 5 percent. Just the kind of deal they pay you to do, oh Yahoo gods and board members.  Of course it'll never happen. It's an idea like the one I keep proposing for newspapers -- that they hire their public editors from the public, independent bloggers with no journalism experience, with no undue reverence for the institutions so revered by journos. They're going away, just like Yahoo is (sad but true). Now what will rise in their place? Imho, something that's home grown, with the integrity of the people, in our interest. The more they invite the public in, the more clued in they will be when we figure out where we want to go with news on the web. It's why I'm excited about the Obama campaign and why I keep giving to it (I'm up to $400 now). I'm excited because so many other people are excited.  I like his idea about tuition for public service for college students. It's so simple. People want to be involved, they want to use their energy and creativity to solve problems. In the 20th century we were couch potatoes. In the 21st we do it for ourselves.  The first tech company that fully embraces this, not just in the form of User Generated Content (what an insult) but by giving us power (that comes from stock) will rule the world. If Y! had the guts, it won't be long before they're making tender offers to buy out Ballmer.  BTW, I think I understand why Ballmer wants Yahoo! When Yahoo engineers wake up they program stuff like Yahoo Live, which is pretty cool and runs on the web, and while it steals ideas from smaller companies, it adds some pretty cool stuff of its own. When Microsoft engineers wake up they program stuff like Vista, a multi-year, multi-billion dollar waste of money, time and customer goodwill. They can't do another Vista without wrecking the franchise. Now the question is -- where do they go for growth? That's what Yahoo is for.
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Microsoft may end up having to raise the amount it is willing to pay for Yahoo if the software company&#39;s stock continues to drop while Yahoo&#39;s continues to rise.In the week since&#160;Microsoft made its surprise bid for Yahoo, the price Microsoft is willing to offer the Internet company has dropped by nearly 7 percent as Microsoft&#39;s share price has fallen. In the meantime, Yahoo&#39;s shares have risen in value, trading at nearly the $31 per share Microsoft was willing to pay, making the company potentially worth a higher asking price and the offer vulnerable to higher bids.Microsoft announced its offer to acquire Yahoo on Feb. 1, saying it would pay $31 for half of Yahoo&#39;s outstanding shares and 0.9509 of a Microsoft share for the other half. Microsoft&#39;s half-cash/half-stock offer to Yahoo was valued at about $44.6 billion at the time it was made.The stock half was based on the $32.60 Microsoft share price at the end of Thursday, the day before the deal was announced last Friday. Yahoo&#39;s share price at the close of market on Jan. 31 was $19.18. The cash half of the deal was $22.3 billion, which, when considering Microsoft agreed to pay $31 per share, is based on half of Yahoo&#39;s outstanding shares being 719,354,838.Microsoft has not publicly said what number of outstanding shares it has based its offer price on. In its form 10-Q filed Nov. 9, 2007, Yahoo&#39;s outstanding shares as of Oct. 31, 2007, were 1,336,444,034. However, cutting that number in half and multiplying it by Microsoft&#39;s $31 per-share offer adds up to $20.7 billion, not the $22.3 billion in cash Microsoft is offering.By Friday afternoon, Microsoft&#39;s share price was down about 12 percent at $28.40. Based on that price and assuming that 719,354,838 is the other half of Yahoo&#39;s outstanding shares -- and then factoring in the $22.3 billion cash offer -- the amount of the bid stands at $41.7 billion.Microsoft&#39;s stock is likely down due to its offer for a number of reasons, said a financial analyst who was interviewed Friday and asked not to be named. Investors may not be happy with the money Microsoft is willing to pay for Yahoo, and&#160;strategic questions surrounding how the companies will pull off a merger&#160;successfully also are driving the stock down.Moreover, the deal is expected to dilute Microsoft&#39;s earnings in fiscal 2009 and perhaps even in fiscal 2010, so the company&#39;s earnings predictions likely will come down, the analyst said.On the other hand, Yahoo&#39;s stock has been buoyed by speculation there could be other, higher bidders for the company now that Microsoft has shown its hand. Yahoo stock has risen nearly 34 percent since the deal was announced; on Friday afternoon it was trading at nearly $29, which is only slightly lower than the current per-share for the stock half of Microsoft&#39;s offer.Microsoft has declined to comment about whether it will adjust its offer so that the final amount of the deal will be the original $44.6 billion offered. The cash half for the time being remains the same, sources close to the company said Friday. However, this could change in last-minute dealings if Microsoft&#39;s stock continues to lose value while Yahoo&#39;s rises, and other companies offer competitive bids for Yahoo in the meantime.
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I have no problem with Microsoft operating in a market environment. Given a choice, I am sure many of us would gladly pay for Windows and Office rather than use Linux and Open Office.
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SAN FRANCISCO/NEW YORK  - Microsoft Corp offered to buy Yahoo Inc for $44.6 billion, in a bold bid to transform two ailing Internet businesses into a worthy competitor for market leader Google Inc.