Microsoft looking to buy Yahoo search

Rather than make an all-out acquisition, Microsoft Corp. has proposed buying Yahoo Inc.'s search business and taking a minority stake in the company, according to a report.

The complex deal, reported Tuesday by Reuters citing an anonymous source, would also involve Yahoo putting its Asian assets, which include sizable stakes in Yahoo Japan and China's Alibaba Group, up for sale.

The two companies revealed the talks on the weekend but declined to reveal terms of the discussions, Reuters said. The proposal represents Microsoft's current thinking and does not yet put a value on Yahoo's search business, according to the source, who the news agency said was not authorized to speak on the record because the discussions are confidential.More>>

The Tug of War Begins Again: Microsoft and Yahoo Having a Fresh Round of Talks

Two weeks after saying no to the Yahoo demands, Microsoft is back on the negotiation table with a new deal

The world’s biggest software giant and the world’s second biggest Internet search company are back on the negotiation table.

A fortnight ago, Microsoft had backed out of the offer made to Yahoo! saying that it had given up the idea of this acquisition.

The facts that Jerry Yang, Yahoo! CEO, had asked Microsoft to up its initial offer of $ 47.5 million and that the share prices of the search company fell by 15% consequently are said to have led to Microsoft’s saying a firm’ No’.

Two weeks down the line, they are back together, discussing how to work out a deal that would be mutually beneficial.

However, this time round, Microsoft is not seeking complete control over Yahoo!, while still reserving the right to a complete buy-out at a later date.

If this deal goes through successfully, Yahoo! would be able to retain some of its stake and therefore its control over the company.More>>

Microsoft Withdraws Its Bid for Yahoo

Microsoft said Saturday that it was abandoning its blockbuster bid to acquire Yahoo after it raised its offer by $5 billion but Yahoo rejected it as still too low.
The about-face followed a meeting in Seattle on Saturday morning between Microsoft’s chief executive, Steven A. Ballmer, and Yahoo’s chief and co-founder, Jerry Yang, according to a person familiar with the talks.

At the meeting, which also included Yahoo’s other founder, David Filo, and a Microsoft president who oversees its online unit, Kevin Johnson, Mr. Ballmer increased Microsoft’s offer to $33 a share, or a total of $47.5 billion, from $29.40 a share. Mr. Yang told Mr. Ballmer that Yahoo would not accept an offer below $37 a share, this person said. More Details>>

The Silicon Valley triangle: Google, Yahoo, and Microsoft

It's Friday night and still no word from the Microsoft or Yahoo bunkers. The headlines for today tell the story (see Techmeme).

The Wall Street Journal, which appears to be a conduit for the negotiations, has a story, "Microsoft, Yahoo Talks Intensify In Push to Reach a Friendly Deal," and another one, "Yahoo-Google Pact May Be Close." It doesn't seem that a Yahoo-Google mating on advertising would lead to a friendly Microsoft-Yahoo discussion this weekend. It's an interesting game of chicken, with many issues, such as regulatory approval, up in the air for any permutation of a deal with the triangle.

It's clear that Yahoo and Google are trying to check Microsoft by hooking up, but it would only be strategic for Yahoo if Microsoft ends up paying a higher price, meaning it has to motivate Steve Ballmer into coming up with more cash. More Details>>

Microsoft directors meet to sweeten Yahoo bid

Microsoft Corp's directors are meeting to consider raising the software maker's $41.9 billion (euro27 billion) bid for Yahoo Inc instead of pursuing a threatened hostile takeover attempt, according to a published report.

A decision could emerge after the meeting, The Wall Street Journal reported, citing unnamed people familiar with the matter.

Microsoft also is weighing withdrawing its bid a move likely to cause a precipitous drop in Yahoo's stock, which has been bolstered by the 3-month-old takeover bid.

If Yahoo's stock deteriorated during the next few months, Microsoft could return with another bid that would be more difficult to turn down.

Investors have been eagerly awaiting word of Microsoft's next move since Yahoo let pass an April 26 deadline for accepting the offer More Details>>

Microsoft Gives Yahoo Deadline on Offer

Microsoft set the clock ticking for Yahoo to accept its $41 billion buyout offer in a letter to the Internet pioneer's board Saturday, warning that if a deal wasn't reached by April 26 the software maker would launch a hostile takeover at a less attractive price.

"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board," wrote Microsoft Chief Executive Steve Ballmer.

"If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal," he wrote.

A Yahoo spokeswoman declined to comment Saturday.

In the letter, Ballmer said Yahoo's search share and page views, two measures of the strength of the Web portal company's business, appear to have fallen since the offer was made at the end of January. At the time, Microsoft's cash-and-stock offer was valued at $44.6 billion, or 62 percent above Yahoo's market value. Judging by Friday's closing share prices, the deal is now worth just under $41 billion.

Yahoo's board formally rejected Microsoft Corp.'s bid in February, saying it undervalues the company.

Since then, the Silicon Valley company has explored alliances with Google Inc., News Corp.'s MySpace.com and Time Warner Inc.'s AOL, but no alternative to Microsoft's offer has surfaced. More Details>>

Yahoo rejects Microsoft's bid

Yahoo Inc on Monday rejected as too low Microsoft Corp's unsolicited takeover offer, currently valued at $42 billion, putting the ball back in the software giant's court to pursue a deal.

In a statement, Yahoo said its board unanimously concluded the proposal was not in the best interests of its shareholders.

The company said the offer "substantially undervalues" its "global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments."

Yahoo added that its board was evaluating all its strategic options.

Microsoft made the half-stock, half-cash offer on February 1. It was originally worth $44.6 billion, or $31 per share -- a 62 percent premium to Yahoo's stock price. Since then, Microsoft shares have fallen, and the deal is now worth $41.5 billion.

Microsoft now must decide whether to sweeten its offer, launch a proxy fight or simply withdraw. Read More>>

Yahoo to Reject Microsoft Buyout Offer

Yahoo! Inc., the Internet company that has failed to crack Google Inc.'s dominance of Web search, plans to reject a $44.6 billion takeover bid from Microsoft Corp., a person familiar with the situation said.

The board spent a week reviewing the $31-per-share unsolicited offer before deciding it was too low, and directors are likely to reject it tomorrow, said the person, who declined to be identified because the discussions aren't public. Yahoo wants at least $40, the Wall Street Journal reported yesterday.

The decision steps up pressure on co-founder Jerry Yang to present investors with a strategy to revive a stock that lost half its value in the two years before the offer. He may look to outsource its search efforts to Google or find another buyer, though analysts said it is unlikely that any other options will emerge and Microsoft may make a higher offer to win.

``A lot of this is gamesmanship on the part of Yahoo,'' said Scott Kessler, an equity analyst at Standard & Poor's in New York who recommends holding Yahoo and buying Microsoft. ``Microsoft is well aware that Yahoo doesn't have any other options. What this is about is how much Microsoft wants Yahoo and how much time they're willing to wait to get this deal done.'' Read More>>

Yokia! Why Nokia Should Buy Yahoo

Forget Microsoft, News Corp. or even Apple. Nokia, the world's no.1 mobile handset maker, should buy Yahoo. Or so says Information Week's Stephen Wellman, who puts forward a compelling argument: If Nokia is repositioning itself as a Web services company, to combat falling profit margins on its hardware, then acquiring Yahoo would help to give the company a much needed presence on the desktop (not just mobile), as well as beef up its Web offerings and Internet brand recognition in general.

"Nokia is now a Web company, not just a handset maker. But, the company acts as if the Web is just mobile and has no desktop component. This isn't a very smart strategy", writes Wellman. All of Nokia's mobile web rivals: Google, Microsoft and, of course, Yahoo all have desktop products.

"These Web giants are leveraging their vast desktop Web audiences to grow their mobile initiatives. While Nokia has tons of mobile phone customers, it doesn't have as many Web application users", notes Wellman. Read More>>

Yahoo seeking ways to avoid Microsoft takeover: Jerry Yang

Yahoo chief executive Jerry Yang sent a message to employees on Wednesday, assuring them the firm's leaders are exploring ways to avoid a takeover by software giant Microsoft.

In an email to Yahoo workers, Yang said the board of directors has yet to decide how to respond to Microsoft's offer to buy the veteran Internet company for $44.6 billion in cash and stock.

"Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape," Yang wrote in the email, which was filed with the US Securities and Exchange Commission.

"What's become clear in the past few days is how much people care about this company. I've heard from many of you, and from other friends and colleagues from around Silicon Valley and across the globe, that we need to do what's best for Yahoo and our shareholders."

Microsoft's unsolicited offer to pay the equivalent of $31 per share for Yahoo highlights the 14-year-old California firm's potential to recapture past glory, Yang told employees.

Microsoft publicly announced what it billed as a "generous" offer for Yahoo on February 1 and said its plan is to combine resources to take on Internet powerhouse Google.

Google has come out against the proposed takeover, condemning it as an attack on the freedom of the Internet.

Yahoo has said little more than its board is carefully reviewing options that include keeping Yahoo an independent company.

Yahoo has received calls from "a number of interested parties" and has a wide range of strategic options, a source close to Yahoo told media.

Those options include outsourcing online advertising to arch-rival Google, a proven master at pumping revenues from that well.

If it spurns Microsoft's offer, Yahoo's board of directors will be under pressure to give stockholders a soothing cash payout or even borrow money to buy back shares and turn the firm private.

The offer comes as Yahoo is losing ground rapidly in the Internet space to Google, the search leader which has cashed in on the market for online advertising.

Yahoo announced plans last week to lay off 1,000 workers, seven percent of its employees, as part of an effort to reallocate resources and bolster its bottom line.

Microsoft Exec Likely To Lead Yahoo!

There will be a significant changing of the guard at Yahoo! if Microsoft succeeds in buying it.

It's practically a given that a Microsoft executive would run the struggling Internet giant and that Yahoo! Founder and Chief Executive Jerry Yang would leave soon after the deal closes.

A few Microsoft executives are poised to step in. The top candidates are Kevin Johnson, president of platforms and services; Brian McAndrews, senior vice president, advertiser and publisher solutions group; Steve Berkowitz, senior vice president, online services group; and Debra Chrapaty, corporate vice president, global foundation services.

Microsoft has been diversifying its executive bench steadily over the past few years.

Rob Helm, director of research firm Directions on Microsoft, sees McAndrews, Berkowitz or Chrapaty having day-to-day management responsibility over the Sunnyvale, Calif., company, and he or she would report to Johnson.

Helm says McAndrews might have the inside track, because Microsoft wants to become a stronger competitor to Google in search advertising. McAndrews was chief executive of aQuantive , an online advertising company Microsoft acquired last year. He even appears to be lobbying to run Yahoo!. Read More>>

Why Microsoft Needs Yahoo: The Real Story

So one day, Scott McNealy, founder and chairman of Sun, read in his morning newspaper how the use of Java was rapidly diminishing, courtesy of something called 'The LAMP Stack'. Furiously, he called his accountant.

Scott: "I knew this Java thing was a bad idea in the first place! I see only one solution. We need to buy this Lamp!"
Accountant: "Euh, LAMP is not a company. It's an acronym. It's Linux , Apache, MySQL and PHP"
Scott: "Then buy me Linux!"
Accountant: "But we still have this Solaris thing.."
Scott: "Then buy me Apache!"
Accountant: "That's a foundation. Nothing to buy there."
Scott: "Then buy me MySQL!"
Accountant: "We don't do databases."
Scott: "It's a database?"
Accountant: "What rock have you been living under?"
Scott: "Sweet. I can own the Lamp AND piss off Oracle at the same time!" (waves fake plastic magic wand) "Make it so!"

And so it happened.

Read Original Story>>

Apple among those considering rival bid for Yahoo?

Global giants including Apple Inc. and Rupert Murdoch's News Corp. are considering rival bids for the internet search icon Yahoo, which has received a $44.6 billion offer from Microsoft, the Scotsman is reporting.

Though the report cites no sources, it points to a statement on Yahoo's website that says that company will seek acquisition proposals from other companies, evaluate all of its strategic alternatives, and then "pursue the option that it believes can best maximise value for our shareholders."

In addition to Apple and News Corp., several other firms are reported to be unwilling to allow Microsoft to gobble up Yahoo without a fight, including American media conglomerate InterActiveCorp and leading Chinese search firms such as Alibaba.com.Read More>>

Yahoo may consider Google alliance

Yahoo Inc would consider a business alliance with Google Inc as one way to rebuff a $44.6 billion takeover proposal by Microsoft, a source familiar with Yahoo's strategy said on Sunday.

Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, that source said. At $31 a share, Yahoo believes the bid undervalues the company, two sources said.

A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.

In a memo to Yahoo employees on Friday, which was obtained by Reuters on Sunday, Yahoo leaders wrote: "We want to emphasize that absolutely no decisions have been made -- and, despite what some people have tried to suggest, there's certainly no integration process underway."

Few natural bidders exist besides Google that could engage in a bidding war, and Google would be unlikely to win approval from antitrust regulators, some Wall Street analysts said on Friday. Read More>>

Yahoo, MS deal a challenge for dotcom cos in India

A potential combination between Microsoft and Yahoo! is likely to erode online advertisement revenues of some small dotcom companies in India while Google could lose some of the pricing power in the country, industry watchers said.

The presence of two strong content aggregators will also make the market tighter for full-range content behemoths — horizontal Web portals — that largely depend on online advertising revenues, they said. Already, the likes of Sify are moving away from the horizontal portal model and are trying to offer transaction-based services.
“Google has achieved a strong position in the Indian market as far as ad spends are concerned, which means that a majority of the effects of the acquisition would be reflected on the desi players,” said online research and advisory firm JuxtConsult co-founder Mrutyunjay Mishra.

Estimates suggest that Google, Yahoo! and the distant third MSN together command about 75% of online advertising budgets in the country, valued at about $120 million. “The merger would ensure the survival for MSN and allow the online branch of Microsoft to move to an ad-driven model, much popularised by Google,” said digital marketing firm Pinstorm CEO Mahesh Murthy. Read More>>