Another Difficulty for a Microsoft-Yahoo Marriage: Recruiting
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In an industry that favors start-ups, a faint stodginess clings to Microsoft and Yahoo that could impede their ability to draw top engineering talent.
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Charles Arthur: Why Google might benefit from Microsoft's attempt to shoehorn Yahoo into itself
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Microsoft needs to do something online--quick. But buying Yahoo! isn't enough.
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Microsoft's $44 billion bid for Yahoo translates into nearly $1,200 for each unique monthly visitor to Yahoo's web sites. You want more metrics? We got 'em. Get your red-hot data here!
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Microsoft has extended its partnership with Yahoo to deliver sponsored search results on its US and international MSN sites, despite the software maker&#39;s recent declarations that it intends to be a major force in the search market.
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A company based in Pakistan offers a challenge to a market dominated by Microsoft, Google and Yahoo.
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Bill Wise of Media Post has put together a thoughtful review of Yahoo&#8217;s reorganization. I had heard a couple of people referring to the Yahoo Reorg as a negative for the Yahoo company and search industry.  I never really understood where they were coming from, nor could they back it up. Seems that there is [...]
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Analysis: The pairing gives Microsoft a needed outlet, but the outcome could quash Yahoo.
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With Yahooâs board rejecting Microsoftâs bid, it will fall to Christopher P. Liddell, an outsider to the software industry, to plot Microsoftâs next steps in the bitter battle.
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If Yahooâs board resists the offer, Microsoft would have to pursue a proxy contest.
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By Kim Hart, Washington Post Staff Writer  Yahoo Inc. and Microsoft Corp. joined forces yesterday on the instant messaging front, allowing users of their systems to communicate with each other and rivaling AOL's messaging system for the top spot.
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Microsoft has the software. Yahoo! has the ad revenue. Together they can challenge Google. Among the likely winners: online advertisers.
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Microsoft's potential acquisition of Yahoo has many pitfalls but also some benefits, and such a huge deal will be hard to pull off, analysts say.
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Well, he would say that wouldn't he? !!!!! Microsoft's offer for Yahoo! is fair, it's not going up and the company should take a long, hard look at it, Bill Gates reckons.â¦
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Internet-centered programs that compete with Microsoftâs core products are an overlooked driver of its bid for Yahoo.
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In a letter to Yahoo&#39;s board, Microsoft CEO Steve Ballmer&#160;offered to acquire the company&#160;for a per-share price of $31 in cash or 0.9509 of a share of Microsoft common stock -- a 62 percent premium above the Jan. 31, closing price of Yahoo -- and cited the broad range of ways in which the companies might work together to create a more effective competitor in the online marketplace. Below is the text of the letter that Microsoft sent to Yahoo&#39;s Board of Directors:January 31, 2008Board of DirectorsYahoo! Inc.701 First AvenueSunnyvale, CA 94089Attention: Roy Bostock, ChairmanAttention: Jerry Yang, Chief Executive OfficerDear Members of the Board:I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft&#39;s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!&#39;s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft&#39;s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&amp;P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.Microsoft&#39;s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that &quot;now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.&quot; According to that letter, the principal reason for this view was the Yahoo! Board&#39;s confidence in the &quot;potential upside&quot; if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.Expanded R&amp;D capacity: The combined talent of our engineering resources can be focused on R&amp;D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!&#39;s shareholders are provided with the opportunity to realize the value inherent in our proposal.We believe this proposal represents a unique opportunity to create significant value for Yahoo!&#39;s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.Sincerely yours,/s/ Steven A. BallmerSteven A. BallmerChief Executive OfficerMicrosoft Corporation
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On DevShed a new series has started (a six-part one) with This new tutorial posted today talking about the use of the Yahoo! web services in a PHP5 application.   It's not my intention to provide you here with a fully-featured guide on how to use Yahoo!'s Web services with PHP 5, because the best place to go is simply the aforementioned Developer Network. Instead, I'll offer to you a bunch of code samples that hopefully will assist you in the development of PHP 5 applications that will utilize some of these useful web services.   You'll need to get an Application ID to work with before you get started (go here to sign up, you'll also need a Yahoo! ID), but the rest of the code is provided. They make a search request to the Yahoo! backend for "madonna" and show the XML formatting of the results.   They also include examples of querying two other services offered by the company's backend API - video search and an image search.