Readers weigh in on Microsoft's Yahoo bid
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News that Microsoft was making a $44.6 billion bid to buy Yahoo was greeted with skepticism by many CNN.com users on Friday.
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Microsoft says its billion-dollar offer to purchase Yahoo is "fair" and suggested that it may pursue a hostile takeover of the Internet company.
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How much are Yahoo's volunteers worth? And how much less will Yahoo be worth if Microsoft scares them away? That's the question that should be at the center of talk about Yahoo's value &#151; both as an acquisition for Microsoft and as good company to work for with. read more
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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.
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On the heels of its recent earnings, we ask what the future holds for Yahoo!
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Yahoo looks for alternatives to Microsoft's unsolicited $44.6 billion takeover bid, according to a report in the Los Angeles Times.
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Zimbra customers are deeply concerned about&#160;Microsoft&#39;s bid for Yahoo&#160;because they feel that the deal would mean the end of the Zimbra collaboration and communication suite.In October,&#160;Yahoo acquired Zimbra, whose suite competes with Exchange and has a heavy open-source component. For those reasons, it will not fit with the product strategy at Microsoft, which will likely pull the plug on its development and put it out to pasture, Zimbra customers are saying in interviews, blog postings and discussion forums.&quot;It&#39;s pretty terrifying for me,&quot; said Cedric Halbach, senior systems administrator at The Metropolitan Companies, which has used Zimbra successfully for companywide e-mail for about two years. &quot;If Microsoft bought Yahoo today, and it was accepted and done, I&#39;d immediately look to transition from Zimbra to another product.&quot;Previously, The Metropolitan Companies used Exchange, which the company found too expensive and unstable. With Zimbra, the cost for The Metropolitan Companies&#39; 175 user licenses is about one-fourth of what it would be for Exchange, and the Zimbra software has been significantly more stable, Halbach said.&quot;We absolutely refuse to move back to Microsoft Exchange. We don&#39;t want to be forced to move back to it. We&#39;d have to look elsewhere in the market for another competing program, and right now Zimbra is the best competitor,&quot; Halbach said.A spokeswoman for Microsoft said the vendor wouldn&#39;t comment on what plans it might have for Zimbra should its $44.6 billion offer for Yahoo be successful. Zimbra didn&#39;t immediately respond to a request for comment.At the time of Yahoo&#39;s acquisition of Zimbra for $350 million,&#160;many Zimbra customers declared themselves displeased about the deal, citing what they perceived as Yahoo&#39;s lack of expertise as a provider of enterprise software.However, Zimbra has apparently continued executing on its pre-acquisition plan and is operating as usual, which Zimbra customers have been grateful for. On Tuesday, Zimbra officially launched the suite&#39;s 5.0 version with enhancements including support for BlackBerry devices and Outlook 2007, as well as a new to-do application for tasks management, an instant-messaging application that allows group chats and the ability to work offline with Zimbra Desktop.&quot;I was a bit nervous at first about Yahoo buying Zimbra, but Yahoo has made good on its word not to disrupt Zimbra,&quot; said Andy Armagost, systems administrator at Brigham Oil &amp; Gas in Austin, Texas.However, the Microsoft bid has him a lot more concerned about Zimbra&#39;s future. &quot;We&#39;re all pretty much holding our breath right now,&quot; he said in an interview. &quot;This latest news is quite more troublesome than the Yahoo news was.&quot;&quot;Microsoft hasn&#39;t historically been the most friendly to open-source projects. I wouldn&#8217;t have the greatest faith for the future of Zimbra if they took over Yahoo,&quot; Armagost added.Moreover, Armagost and his boss, the company&#39;s IT manager, aren&#39;t big fans of Microsoft server software because they consider it clunky and unreliable.&quot;We don&#39;t have the greatest faith on Microsoft overall,&quot; said Armagost, adding that Brigham Oil &amp; Gas is a big user of Sun servers and that it is currently transitioning to Linux machines.Word of Microsoft&#39;s bid for Yahoo also has Benson Wong concerned. As senior real estate technologist at Sutton Group Realty Services in Canada, Wong is overseeing the implementation of the Zimbra suite, scheduled to start in March. &quot;Microsoft has Exchange, so the concern is that it might decide that it doesn&#39;t want Zimbra at all,&quot; Wong said in an interview.Like Armagost and Halbach, Wong isn&#39;t a fan of Exchange. At the other end of the spectrum, none of the three men would consider Web-hosted options like Google Apps because they want to have their e-mail server software installed on their companies&#39; premises in order to have control over it.That&#39;s why none chose the Zimbra option to have the suite hosted externally by a third party in a software-as-a-service model. The three companies use the suite&#39;s commercial Network Edition -- there&#39;s also the free Open Source Edition -- but they like the flexibility that the open-source nature of the software gives them.In short, for them, Zimbra is the best option in the market for e-mail. The concerns from these three customers are echoed in hundreds of postings made by their peers in blogs and discussion forums, such as in this thread on a Zimbra board.Some analysts also share this view. In a note commenting on Microsoft&#39;s bid, The 451 Group analysts forecast that Microsoft will have little interest in keeping Zimbra going: &quot;Microsoft will have to decide what to do with Zimbra; our guess is that it will let it wither and die rather than spin it off and leave it as a threat to Exchange,&quot; they wrote.In the meantime, The Metropolitan Companies, Sutton Group, and Brigham Oil &amp; Gas are moving forward with their respective plans for the software while keeping an eye on the acquisition possibility.As Halbach put it, it&#39;s a &quot;wait-and-see&quot; attitude at The Metropolitan Companies. &quot;We&#39;re making strategic plans in case we had to switch: What would we choose, and how would we go about doing it?&quot; Halbach said. &quot;That&#39;s a nightmare scenario for us because we&#39;re going to have to change everybody who is working for us across the country. It&#39;d be a major transition.&quot;
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F*ck! me! Microsoft has made a $44.6bn takeover bid for Yahoo!.â¦
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Yahoo!'s board weighs its options for responding to Microsoft's $44.6 billion offer.
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What if Yahoo's main value isn't its search engine or its advertising business, but the openness that makes it more Net-native and hacker-friendly than Microsoft? Does Microsoft understand that this same kind of openness plays a large role in Google's success as well? read more
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More competition courtesy of the proposed Microsoft-Yahoo! combo?
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Microsoft executives said very little on Friday about the undeniable challenges of integrating the company&#39;s Internet division with Yahoo, largely avoiding the proverbial elephant in the room that could delay or, in some cases, eliminate benefits of the deal.At the heart of the acquisition is Microsoft&#39;s goal of giving its online advertising and online services business a major boost, ending years of business and technology defeats at the hands of common rival Google.Microsoft wants to make sure that as online ad spending doubles to about $80 billion in the next three years, it will be in a much better position to grab a larger piece of the market, specifically in sponsored search, which is the biggest online ad segment and where Google dominates.As CEO Steve Ballmer, President of Platforms &amp; Services Division Kevin Johnson and Chief Software Architect Ray Ozzie said repeatedly during Friday&#39;s news conference, Microsoft wants to swallow Yahoo to accelerate its pace in online advertising. With Yahoo&#39;s online services, engineers, and ad platforms, Microsoft hopes to become a stronger competitor to Google than it is today.That all sounds fine in theory, but Ballmer and his colleagues said little about the energy and know-how they will need to make this proposed $44.6 billion acquisition work, considering that the companies have a significant overlap in online services, markedly different cultures, and an abundance of inflated professional egos at every level.Not to mention that Yahoo these days is far from functioning as a well-oiled machine. Yahoo has been in significant turmoil for more than a year. Seasoned executives who are experts on its business have struggled and largely failed to restore the company&#39;s technical edge and business focus. That&#39;s a mess that Microsoft will inherit and will have to solve in order for the deal to work its expected magic.In short, Microsoft must make sure that, in its quest for scale and speed, it doesn&#39;t end up getting stuck, its wheels spinning, trying to mesh Yahoo with MSN, while Google speeds further ahead. It&#39;s clear that to take advantage of the online ad growth, companies will need to innovate and change quickly, and not be sidetracked by acquisition distractions.Among the many emerging opportunities in online advertising are: the mobile sector, which is expected to go from almost nonexistent to vibrant in the coming years; social Web properties, such as social networks, blogs and social news sites, which haven&#39;t been monetized properly and hold great promise; and video, both in the form of video ads and ads in videos.There were indications during Friday&#39;s news conference that Microsoft may not have taken the time to fully assess the magnitude of the integration complications. Despite Ballmer&#39;s assurances that he personally has thought &quot;long and hard&quot; about the Yahoo acquisition, there is evidently a level of urgency about the move, or else the deal wouldn&#39;t have been an unsolicited offer, as Yahoo has portrayed it.If, as Ballmer indicated, the companies have been in on-and-off talks for about 18 months about a possible acquisition, it&#39;s fair to ask -- as a financial analyst did -- why they couldn&#39;t sit down privately and present, jointly, a more cooked deal. Basically, Ballmer admitted that Google keeps expanding its empire and time is of the essence.&quot;Any large integration process has risks associated with it. We&#39;ve all thought about it. We could have hired [more] engineers, but at the same time the market continues to grow and the leader continues to consolidate positions and there&#39;s nothing quite like putting together two larger sophisticated R&amp;D organizations,&quot; Ballmer said.Along with the inherent opportunity to sell more ads, Nick Patience, managing analyst at The 451 Group, also sees a &quot;potential integration headache&quot; with having to integrate Microsoft&#39;s ad platforms -- AdCenter and aQuantive -- with Yahoo&#39;s. Patience is also skeptical about the possibility of merging search indexes, and believes that the search engines will most likely have to continue to operate independently. Overall, the integration work would represent for Microsoft &quot;a step into the unknown,&quot; particularly since this would be by far the largest acquisition in Microsoft&#39;s history, Patience said.Gartner analyst Allen Weiner also sees potential integration challenges, particularly because he doesn&#39;t think either organization has a powerful leader who can take the reins of the combined entity and lead it into the future. &quot;They need someone like a Steve Jobs or a Bill Gates who has the charisma, vision, technical knowledge, and consumer knowledge to lead,&quot; Weiner said.On paper the acquisition has interesting potential, but it will all come down to how the integration is carried out, Weiner said. &quot;It&#39;s all about the execution,&quot; he said. &quot;The devil is in the details.&quot;Despite numerous acquisitions over the past few years in advertising and Web 2.0 technologies, Yahoo has struggled to jump-start its business, said JupiterResearch analyst Michael Gartenberg. &quot;At the end of the day, it hasn&#39;t all worked out for them,&quot; he said.While Microsoft executives are stressing that a deal with Yahoo would give it the scale to compete with Google, wrapping the two companies&#39; diverse technologies together won&#39;t be simple, Gartenberg said. &quot;In order to get to that scale, you&#39;ve got to be able to fit all those pieces and parts together,&quot; he said.Despite the integration concerns, Microsoft has good processes in place for managing acquisitions of large companies, said Gartner analyst Mike McGuire. However, it will be key for Microsoft to quickly put a senior management team in place as Google will continue to propel ahead as Microsoft sorts out the details. &quot;They are going to have to start showing some traction, or at least a really solid vision for how they will combine the companies ... early on,&quot; McGuire said.Matt Booth, a Kelsey Group analyst, thinks that the integration challenges will be major but predicts that Microsoft will work through them methodically, starting on the back end and linking services in a way that, as much as possible, is transparent to end-users, be they advertisers, publishers, or consumers. For services that are just too difficult to integrate, they will likely be kept separate. The last thing Microsoft wants to do is drive users away, Booth said.In a research note, Citigroup financial analyst Mark Mahaney said he is skeptical that a combined Microsoft-Yahoo would improve its search products enough to affect Google&#39;s position, since they both have been losing search market share and, in his opinion, seeing a decrease in their search innovation.&quot;Given what would surely be immense integration challenges, it&#8217;s hard for us to see how a Microsoft-Yahoo combination would create a greater technology competitor to Google at least for the foreseeable future,&quot; he wrote.&quot;We could see a scenario by which Google would actually gain more market share due to industry uncertainty over the integration of the deal,&quot; Mahaney added.
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Google has made its first official comments on&#160;Microsoft&#39;s proposed acquisition of Yahoo&#160;saying that the deal raises &quot;troubling questions&quot; and that the underlying principles of the Internet stand to be tested by the proposed deal.The statement refers several times to Microsoft&#39;s past regulatory transgressions and indicates that Google could be preparing to fight the deal -- if it is accepted by Yahoo -- by pushing regulators to disallow it.&quot;Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?,&quot; asked David Drummond, senior vice president of corporate development and chief legal officer at Google in a statement posted on the corporate blog on Sunday.Drummond also asks if an acquisition could allow Microsoft to &quot;extend unfair practices from browsers and operating systems to the Internet?&quot; and to &quot; take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors&#39; email, IM, and web-based services?&quot;A report late Sunday in the online edition of The Wall Street Journal said Google CEO Eric Schmidt called Yahoo CEO Jerry Yang on Friday to offer help to the rival in thwarting the bid. The newspaper, which quoted people familiar with the matter, didn&#39;t provide details of the telephone call.Google has something to fear from a combined Microsoft and Yahoo. The proposed deal, which was announced on Friday and has Microsoft offering $44.6 billion for Yahoo, would combine the number two and three search engines. The two companies are also leaders in the areas of Web mail and instant messaging so a merger would provide stronger competition for Google in those areas.But Google has a massive lead in search and the deal wouldn&#39;t necessarily lead to an improvement in search results, so Microsoft and Yahoo would still face a challenge to surpass Google&#39;s current dominance in this part of the market.The Google statement got a quick response from Microsoft, which said a combination of the two companies would benefit Internet users by establishing a stronger number two competitor to Google.&quot;The alternative scenarios only lead to less competition on the Internet,&quot; said Microsoft&#39;s top-lawyer, General Counsel Brad Smith, in a statement.&quot;Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo! will advance these goals,&quot; Smith said.A merged company would still only account for about 30 percent of the search queries run in the U.S. and about 10 percent in Europe, he said.
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Microsoft faces financial and legal hurdles in its unsolicited bid for Yahoo. CNET News.com walks you through the potential steps.
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Yahoo! must consider the Microsoft deal on the table.
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Whether Microsoft intends to take its case to Yahoo shareholders, and maybe raise its offer in so doing, remains well within the company's rights. Nonetheless, Bill Gates said, at the very least, that a price hike wasn't necessary.
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Software giant goes public with $44.6 billion bid for the Net pioneer. Will Yahoo succumb to the advances or rebuff Microsoft as it has before?