Yahoo! Turns Down Microsoft’s Buyout Proposal

posted by Christopher on February 11, 2008

{{chris}} Yahoo! has turned down Microsoft’s buyout proposal!

Not much more to say about it – the Yahoo! board turned it down citing that it was not in the best interest of shareholders. Not sure how more money is not in their best interested, but we’ll see what happens over the next few weeks.

So what do you think of the buyout – should Microsoft buy Yahoo!?

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Comments (26 Comments)

ckata
February 11, 2008

Thanks JACL! We have no intention of stopping!
Adam
February 12, 2008

I was really excited to here this news, shame nothing is going to happen. Could be the only chance ms and yahoo have to beat google.
ckata
February 12, 2008

I agree. However, I don’t think the battle to buy Yahoo! is over yet. In fact, it’s likely just a negotiating tactic. Who takes the first offer anyway?

My prediction is that Yahoo! will be bought in 2008 by Microsoft. Now let’s keep our fingers crossed.
Joshua
February 12, 2008

Wow, I agree with ckata. I wouldn’t take the first offer either, I would negotiate a larger amount. Personally I believe for the right amount we will see some changes in 2008.
ckata
February 12, 2008

Hey Joshua,
Thanks – I fully believe it will happen this year. They just have to work out the right price.
SEOMaster
February 12, 2008

I think that Microsoft never will buy yahoo!
Juliya
February 13, 2008

I was realy surprised to know that Yahoo has turned down Microsoft`s buyout proposal.believe for the right amount we will see some changes in 2008.
Eric
February 14, 2008

I heard a prediction of a hostel take over…
ckata
February 14, 2008

Hey Eric,
Yeah – it’s definitely a hostile takeover. MS just worded it very nicely. MS is basically saying we’re going to do what the shareholders want, not necessarily what the board wants. This is far from over – it’s just negotiating time!
JACL
February 16, 2008

Ckata,

Hey someone is using my name up here. The comment in by JACL above is someone else.
You should ban them from posting comments. There URL goes to some hair beauty site.
JACL
February 16, 2008

Yahoo has been on Microsoft’s wish list for the past few years.

Microsoft will obviously make a higher offer which will probably be rejected again. Then Microsoft will probably go for a proxy fight in what is generally called a hostile takeover.

Yahoo’s entire 10-member board is reportedly up for re-election at the next annual shareholders meeting and I am sure Microsoft will be stacking that meeting to put up their own hand picked people to run for those seats and control. Yahoo’s first mistake was not having staggered elections.

I can guarantee you that Microsoft has already handpicked people to run for the Yahoo’s Board.

What will Yahoo do to counter a hostile takeover?

Its called the poison pill.

The last time I heard about the poison pill was by by professor who taught corporations.

The poison pill works like this:

Yahoo adds to its charter a provision which gives the current shareholders the right to sell their shares to the acquirer at an 100% markup.
Yahoo takes on large debts in an effort to make the debt load too high to be attractive – the acquirer would eventually have to pay the debts.
Yahoo buys a number of smaller companies using a stock swap, diluting the value of the Yahoo’s stock.
Yahoo grants its employees stock options that immediately vest if the company is taken over by Microsoft. the target’s stock.
Microsoft is ready for a fight and so is Yahoo.
JACL
February 16, 2008

Yeah, other reliable sources confirmed it. The Yahoo Board of Directors all come up for an election this summer.

The lawyers who set up Yahoo should have advised them about the problems of not having staggered elections. Even nonprofits organizations have staggered elections. What were they thinking?

Microsoft has until mid-March to nominate new Yahoo directors.

This boxing match between Microsoft and Yahoo has Google watching in the front row seats eating popcorn.
logo
February 17, 2008

I think ultimately this has to go through, in order for Microsoft or Yahoo to be a competitive force they need to get together on the search engine side. Obviously Yahoo is holding out for a higher price or are actually thinking they can compete. They’ve lost the market share and there are very few instances of companies getting back market share for the same product once it’s lost, just ask Ford.
ckata
February 18, 2008

Hey Logo – I am pretty sure they are just using this as tactic to drive up the share price.
ckata
February 18, 2008

Hey JACL: this entire acquisition is just fantastic to watch. I for one am really holding out for it!
JACL
February 18, 2008

Ckata, I agree. The entire acquisition is really fantastic to watch.

Yahoo’s poison plan is set up based on issuing stock at cheap prices once Microsoft owns 15% of the Yahoo Shares. Its unclear when is the best time to buy Yahoo stock. I would imagine, though every time Microsoft comes courting the shareholders, the prices becomes artificially inflated.
OX
February 25, 2008

I may be the minority here, but I don’t want to see it happen. Micro$oft is big enough so as it is. Granted Google is a behemoth in its own right. I still don’t want to see micro$oft just throwing money at their 3rd place position in order to fix it.
ckata
February 25, 2008

Hey Ox,
That’s a good point. My only concern is that neither Yahoo! or MS have the ability to take on Google themselves.

MS needs some real search experts on staff. perhaps if they covertly funded a search startup and managed to hire away talent from Google it could happen with Yahoo! MS certainly has the deep pockets to do such a thing.
MAC
February 28, 2008

This is like the most awsome battle of the year. Yahoo -vs- microsoft. Looks like i have to wait to see the outcomes. My votes to microsoft!
Technology Transfer Company
March 12, 2008

I do not see the point in Yahoo becoming a part of Microsoft although it is said that Yahoo has some internal problems but those problems can be solved. Microsoft has its own problems to solve and Yahoo would only bring a new kind of problems and personally I don’t want to see Yahoo under Microsoft.
Randy Barnet
March 13, 2008

I hope Microsoft doesn’t make this buy. They are big enough, and we need at least a little competition out there.
ckata
March 13, 2008

Hey Randy!
I agree with you on the competition part. I think with this acquisition it will really give Google a competitor to force them to innovate. The next competitor to give them all a run for their money is http://www.cuill.com which has been started up by ex Googlers!
Know-Orange
December 25, 2009

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but seriously, great post and thank you alot !!
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Mac Ozeti
January 9, 2010

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porno
March 24, 2010

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Article Directory
March 24, 2010

I agree with you on the competition part. I think with this acquisition it will really give Google a competitor to force them to innovate

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Yahoo! Turns Down Microsoft’s Buyout Proposal

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