Yhoo & Msft

[flybynight]

I have read most of the threads regarding the deal, but wanted to toss this one out there and see the thoughts of everyone. Below is a recent article posted by Talk Back Americas

The comment below responds to the question we posed on Dow Jones NewsPlus: Should Yahoo Inc. (YHOO) accept Microsoft Corp.'s (MSFT) $45 billion offer?

Jim Walker, attorney and CPA, writes:

Law student David D.'s analysis is correct at an elementary mathematical level - that is, he has outlined what is occurring. After he finishes his studies to become a full-fledged lawyer, he may understand why the shareholders are betting that Microsoft will raise its offer. Yahoo would face a tough battle in the inevitable shareholder derivative suit if it took the first offer. Every rube knows you don't take an unsolicited buyer's first offer. To fulfill their fiduciary (legal) obligations, Yahoo must extract more than the first offer from Microsoft. And Microsoft knows this. And most investors know Microsoft knows this.

Bottom line: Microsoft threw the first number out there, knowing Yahoo's board of directors would be playing with fire if they took it, so Microsoft stands ready with a higher offer. Shareholders who understand this interplay, and are betting on it, may see a handsome payoff in the near future.

[BSGCORP]

correct me if I'm wrong, but i thought this was the second offer from Microsoft? I thought the first offer was for more, something like $48B i could be way off here, I didn't follow the news as much about a year or a year and a half ago.

[flybynight]

Another thought that has been asked is would this be a good buy for Apple?

Any thoughts?

[BuyOnDips]

I think ADBE would be a good buy for Apple, not YHOO. I think MSFT is making a big mistake buying YHOO. I bet 2 years from now, Ballmer will be forced out. He hasn't done much at all for MSFT shares over the years.

[coolio]

Originally Posted by BSGCORP

correct me if I'm wrong, but i thought this was the second offer from Microsoft? I thought the first offer was for more, something like $48B i could be way off here, I didn't follow the news as much about a year or a year and a half ago.

I think you are right. There was discussion of a merger about 1 year ago. I remember the figure of $40 per share of Yhoo stock.

Given the time that has passed by since the initial offer and the recent statements by Bill Gates, I think that MSFT will stand pat with their $31 offer. This puts a lot of pressure on Jerry Yang and the board to do something... anything.

[Rynn]

This offer has really disrupted Yahoo's business. Employees are leaving, and customers are nervous about doing business with Yahoo due to the uncertainty of what might happen, especially with things like Zimbra.

I'm halfway convinced this wasn't a serious offer, and Ballmer only did it to screw over Yahoo.

[optimus25]

We'll see what the shareholders think. Yahoo's lost its mojo long ago.

[stockgirl7]

As a result of this offer - Yahoo is RIP in 2008. This is the way I look at it:

Yahoo will not take the initial first offer because it simply is to low; however, I sincerely believe that if they counter offer MSFT will not accept anything leaving Yahoo in a weird limbo state of having one foot out the door but having no where to go.

In short, if they sell it will be on the cheap. If they attempt to get their worth, the action of negotiation alone might be enough for share holders to abandon them.

If MSFT does absorb Yahoo, it will be the exact situation as Great Plains and Axapta - they will initially say it will be co-branded etc etc - but in the end it will be rolled under a MSFT name never to be seen again all in a 6-12 month time frame. In this case, two bad search engines will not make a right.

Either this is an insanely great move by MSFT by laying the offer on the table in hopes they keep their money and eliminate a competitor, or this is an insanely stupid move by Ballmer in order to raise his ever dropping approval rating.

[super32]

So, what's happened with the MSFT's 2nd offer? I'm assuming YHOO hasn't taken it, as if they did it would be all over the news.

Is there any progress on whether MSFT is thinking of trying to up any stakes to encourages YHOO to accept?

I agree with the offer having messed up YHOO employee metalities. My friend works there (been there for about 8+yrs i think), and he's currently looking around for another position. He tells me that he's tired of what he does and is looking for something "new", but I think the MSFT offer to YHOO might have been a trigger to get him up and looking.