Microsoft Makes Its Yahoo! Play
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Software giant wants the search engine for $45 billion.
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In an indication that MicrosoftÃ¢â¬â¢s strategy for digital rights management in the "Zune era" will be even more stratified than at first thought, the company introduced another DRM technology to the mix this morning at 3GSM in Barcelona: PlayReady, which appears to add streaming media and pay-per-view capabilities to the PlaysForSure platform it already had in place.
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In a bid to dethrone Apple Computer as the king of the online music market, Microsoft formally launched its own service Tuesday. Microsoft&#39;s MSN Music service virtually mirrors
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Search firm Yahoo reveals its ambitions to create a "rich web experience" on mobile phones.
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Microsoft's newly released music player is the latest in a years-long desire to counter Apple's dominance in the sector.
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Shared bank accounts next? Call it co-incidence or call it necessity, but Microsoft has jumped on-board a Yahoo!-backed initiative to give internet users a single digital identity.â¦
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Internet media company Yahoo Inc  said on Tuesday it is adding media-playing features, large file transfers, new languages and other tools to its instant messaging service.
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'We've been engaged for months' !!! Steve Ballmer all but confirmed that Microsoft wanted to buy Yahoo! for scale, branding and audience rather than any technology or products the web media co owns.â¦
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Would Yahoo! give Microsoft an unfair advantage over Google?
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Continuing to redefine the mobile Internet experience for millions of  consumers around the world, Yahoo! Inc. (NASDAQ:YHOO) today announced  the availability of gamma version of Yahoo! Go for Mobile 2.0 on Windows  Mobile powered devices.
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SAN JOSE, California - Microsoft Corp. has strategically nurtured its Windows Media Player, making it by far the world&#39;s most dominant program for playing digital music and video on computers.
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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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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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One of the first things Microsoft did when launching the Zune was get rid of the two-year-old MSN Music download service. That doesn't bode well for Yahoo Music.
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Microsoft have made a beta version of their new music store available to the public. The store is entirely browser-based and does not require a separate client like iTunes.
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THE online search giant Yahoo wants to make a debut on the small screens of handphone users soon. Yahoo has acquired WUF Networks, a small start-up with technology which aims to let consumers move their songs
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Yahoo Inc. (YHOO.O: Quote, Profile, Research) has agreed to extend its deal to place advertisements on Microsoft Corp.&#39;s (MSFT.