Yahoo: Microsoft's price just wasn't right
Update 8:10 p.m. PDT: I added some detail about Yahoo's financial performance and its claims of progress. Update 7:35 p.m. PDT: I added more detail about Microsoft's maximum bid and Yahoo's minimum requirement.
Microsoft just wasn't willing to pay enough for Yahoo to make the deal worthwhile, the company said Saturday.
"From the beginning of this process, our independent board and our management have been steadfast in our belief that Microsoft's offer undervalued the company and we are pleased that so many of our shareholders joined us in expressing that view," Yahoo Chairman Roy Bostock said in a statement.
Microsoft withdrew its offer to acquire Yahoo after increasing its $31-per-share cash-and-stock bid to $33. Yahoo evidently thought that too low--Microsoft Chief Executive Steve Ballmer said Yahoo wouldn't go below $37.
Bostock also indicated that Yahoo thinks it can grow just fine on its own, even if he didn't declare Yahoo restored to financial vigor. However, he didn't share specifics about what's next for the company.
"Yahoo is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market. Our solid results for the first quarter of 2008 and increased full year 2008 operating cash flow outlook reflect the progress the company is making," he said.
Yahoo's first quarter, though, certainly didn't knock the ball out of the park, in stark contrast to Google's results the week earlier. Yahoo reported net income of $542 million, but excluding a $401 million non-cash gain related to its stake in Alibaba Group, that was flat from a year earlier. The fundamentals of the Microsoft situation remained unchanged, and the stock didn't budge.
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It's quite possible Microsoft will return again for another bid--particularly if Yahoo's share price plunges and the purportedly loyal shareholders agitate for fast change. But Yahoo Chief Executive Jerry Yang was willing to call the Microhoo saga at an end.
"With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners, and users," Yang said in a statement.
Yahoo claimed some successes, saying the company is working to improve ad volume and yield from those ads; reorganized to focus on its most promising areas; invested in the display-ad business and in catching up to Google in search-based text ads; and improved expense controls to improve profitability.
So what's next? Yahoo has a number of options, all inevitably to be seen through the lens of the company's stock price on Monday. Microsoft's offer more than three months ago sent Yahoo's stock up dramatically from $19.18 beforehand to $28.67 on Friday.
Yahoo, though, was unspecific about its plans.
Bostock said Yahoo remains focused on pursuing unstated "strategic opportunities." That covers a wide range of possibilities. No doubt shareholders will be interested to compare details with what Microsoft had to offer.
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Has this guy always been so clueless and unplugged. Yahoo is going to drop bigtime.
LOL
Search into that site. MySpace's search is powered by none other
than Google.
Break the wedge!
www.breakthewedge.com
If they had sold out, Yahoo would be no more, MS would have a few low level programmers(the talent would bolt on day one) and a bunch of software that would take years to understand and port to the archaic windows platform. Meanwhile, Google is still very agile and would have widened the distance while MS assimilates more bloat.
In short this was a lose/lose for both Yahoo and MS.
Your Iron Deity has clay feet - Yahoo just proved it. MSFT also proved that they have no cojones for a proxy fight.
Sucks that they'll never catch Google now, doesn't it?
/P
Google is like a 100MPH snowmobile.
And Yahoo is like a herd of big angry cheetahs.
The balding frustrated overbearing musher thinks it's a good idea to spend his life's savings on the herd of big angry cheetahs. He feels the result will be a much faster dogcat-sled team that can compete with the snowmobile.
Anyone else see a problem with that?
Alas the angry cheetahs would prefer otherwise, much to the chagrin of their owners who hoped to profit on the sale.
If it had happened, the imminent catastrophic self-destruction of the entire catdog-team and musher would have been amazing to watch.