Microsoft poses ultimatum if Yahoo doesn't come quietly

No more Mr. Nice Microsoft. Apparently when Microsoft puts $44.6 billion on the line, it really means it, and the company just sent an open letter to Yahoo's board of directors stating in no uncertain terms that the 62% premium over Yahoo's closing price on January 31, 2008 was more than fair. The word is now that if Yahoo can't see that, Microsoft will be compelled to take its case "directly to [Yahoo's] shareholders." Microsoft is giving Yahoo three weeks, and then promises to try and start a proxy contest to elect an alternative set of directors to the board. This is about to get good.

[SimonRichards @ Apr 5th 2008 1:49PM]

Best. Picture. Ever.

[CUBSWILLWIN @ Apr 5th 2008 3:16PM]

Totally.Agreed.

[Chris Macdonald @ Apr 5th 2008 3:38PM]

simon. get a. haircut. please.

[Josh @ Apr 5th 2008 1:49PM]

Good for who? I hope Microsoft keeps their money grubbing hands off Yahoo!

[UKNigel @ Apr 5th 2008 6:54PM]

Good for us, since we will get to watch the fight.

[Cassini @ Apr 5th 2008 9:24PM]

I just recently spoke with a fellow a couple of weeks ago who lives in my area and happens to work at Yahoo. He told me that Microsoft's buyout/takeover/whatever you want to call it, was a "done deal".

The way that Engadget relayed it, is exactly what he happened to say: they'll elect new directors who will approve the buyout; but they'll also sweet-talk and offer money to everyone else (who they feel they need to) to get them to go along with it all, and that will be the end of it.

I've always thought, Microsoft is so big - it's a monster - that it's never a question of "if", but only "when" will they get what they want.

What will be even more interesting to witness than this whole takeover process, is how Microsoft will fumble around clumsily for two or three years as they manage to merge or integrate their newly acquired assets. Really makes me curious as to what their whole game plan is and how they're going to leverage it all against Google or whomever else they're targeting.


Oh yeah, and, *love* the photo, LOL.

[Chicksta @ Apr 5th 2008 1:50PM]

Well I can see how great it'll be for everyone to set yet another precedent of 'if I don't get what I want, when and how I want it, I'll go behind your back and force your hand'. It's the same negotiating tactics a 5-year old uses - 'find the enabler'...

[hypereric @ Apr 5th 2008 4:56PM]

No offense, Chicksta, but your analogy does not fit. A public traded company is just that, public (if at least 50.1% of voting shares are "out and about" in the world).

Yahoo is such a company. Therefore, it is a courteous gesture to go to the present board of directors first, but it is by no means necessary. Objectively, it would be entirely appropiate to bring the offer first to the collective 50.1% investors since they, by virtue of that .1%, are the true owners of the company.

Think back to the "hostile take-overs" of the eighties. They were given a black eye by conventional wisdom, but CW is sometimes made up and believed by people who have no clue how something actually works.

They took the courteous, but not required*, route; now they are taking their case to the true owners of the company... the people.

(* laws might have chnaged since the eighties; neverthless, the collective group of people known as its' investors are the true owners of Yahoo)

[John @ Apr 5th 2008 5:04PM]

This isn't going behind their back. The board does not get to make decisions with impunity, it represents millions of stockholders. But I guess you with your idiot analogies also believe that 'consent of the governed' and 'democracy' are overrated too.

[phanbouy @ Apr 5th 2008 6:13PM]

Not sure I agree but I'm still down for dinner. Chotchkie's or Flingers?

[sk8rpro @ Apr 5th 2008 6:32PM]

I agree with you Chicksta. After all, Microsoft should not be engaged in monopolistic practices.

[MEAT! @ Apr 5th 2008 6:34PM]

"...It's the same negotiating tactics a 5-year old uses..."

I remember the last time my five year old went behind my back by sending an open letter that threatened to go directly to my shareholders and let them decide on a takeover. I was so mad.

[Ty @ Apr 7th 2008 1:24PM]

The bitches be behavin' like superdelegates.

[Tony @ Apr 5th 2008 1:51PM]

@Josh

At a 62% premium I think Yahoo! is the one with money grubbing hands.

In other news, I still can't reply!

[Bobs @ Apr 5th 2008 2:02PM]

Not to mention the bill and melinda gates foundation...

[andres @ Apr 5th 2008 10:02PM]

if you click the date on the post, you can reply

[Jared @ Apr 6th 2008 12:51PM]

I loved watching Yahoo's explanation of why they were worth $40/share. Microsoft's response was "So What??" meaning that none of yahoo's results in recent history have come to par with the board's expectations

[Vesh @ Apr 5th 2008 1:53PM]

Good for blogs so they can report it and good for those of us who find hilarity in the ridiculousness of these events.

[3rdsun @ Apr 5th 2008 1:53PM]

Yahoo prepare to be assimilated by MicroBorg

[Ghen @ Apr 6th 2008 7:41AM]

Good. I'm glad. Thats one less stupid toolbar for my customers to install. You would think that when half of their screen realestate is covered by toolbars they'd use ANY of them to search for an answer, but nOoOoOo.

[electronicat @ Apr 5th 2008 1:54PM]

Seriously. Ballmer is so gross. Engadget should host a Photoshop contest to see who can come up with the best image using his fat ugly head.

[ssuk @ Apr 5th 2008 3:31PM]

You're new to the internet, aren't you?

[Henry Khachatryan @ Apr 5th 2008 1:55PM]

@Tony

I totally agree with you, Microsoft has been more then fair with their offer, but if the Yahoo board doesn't take this offer and everything somehow falls through, the shareholders are going to have a field day with the company.

http://www.collegemogul.com

[smiledr @ Apr 5th 2008 1:58PM]

"Well I can see how great it'll be for everyone to set yet another precedent of 'if I don't get what I want, when and how I want it, I'll go behind your back and force your hand'. It's the same negotiating tactics a 5-year old uses - 'find the enabler'..."

They are not setting another precedent, this is how it is in the takeover corporate world. 62% over today's current price is more than adequate with signs that Yahoo stock is going to continue to sink. They are taking it to the shareholders who really matter and that is the fair thing to do. If a board is so short-sighted and cannot see this opportunity, than maybe the shareholders will.

[El Taco @ Apr 5th 2008 2:00PM]

@tony

me either!

[rcappo @ Apr 5th 2008 2:01PM]

Maybe Yahoo! is worried that Microsoft will kill it and actually cause Google to win. I know that I would have to switch from my 12 year old Yahoo e-mail account to my Gmail account that has barely been used.

[mark lee @ Apr 5th 2008 2:02PM]

Dude what are you smoking? So you would let Microsoft tell you exactly how much everything you own is worth?

[Lifetime @ Apr 6th 2008 7:12PM]

Microsoft didnt tell them how much they were worth. The traders determine what the going rate is. Microsoft just used the going rate and added more money.

[melloncollie @ Apr 5th 2008 2:03PM]

It's not.
This kind of thing happens all of the time in the corporate world.

[melloncollie @ Apr 5th 2008 2:03PM]

It's not.
This kind of thing happens all of the time in the corporate world.

[melloncollie @ Apr 5th 2008 2:03PM]

Damnit, fix your reply system Engadget.

[retro77 @ Apr 5th 2008 2:04PM]

Wait...wait...let me get my popcorn.....wait!....ok I got my popcorn...continue on!!

[Ellianth @ Apr 5th 2008 2:09PM]

oh, so when things don't go your way you just lie down and die?

[Maestro @ Apr 5th 2008 2:09PM]

And Yahoo isn't in business to make money?

[Ellianth @ Apr 5th 2008 2:10PM]

umm.. what's up with your comment system? every other day it breaks...

[RC @ Apr 5th 2008 2:20PM]

Yes, the broken comment system is especially bad considering all the snarky commentary this site gives to various companies.

Has there been a "how would you improve engadget" post? Maybe I missed it.

[PSU_Boss @ Apr 5th 2008 2:34PM]

1. Click the time and date next to the comment you want to reply to.
2. Then click reply on the right
3. Then check to make sure it says: "replying to USER [Undo]"

[PSU_Boss @ Apr 5th 2008 2:38PM]

Also, i just found the problem.
in the onClick event of each Reply link, you have:
onclick="replyToCmt("comment_num_here","user_here")"
when it should be:
onclick="replyToCmt('comment_num_here','user_here')"

the double quotes around the number and name are messing up the onClick event.

[Cal @ Apr 5th 2008 8:31PM]

Too much effort this way =( I want one click, type, click =P

[Reader @ Apr 6th 2008 4:23PM]

For me it's not that I don't know how to reply, it's that half the time I do it the same way I have for years and forget out of habit, therefore misplacing my comment...

[MastrCake @ Apr 5th 2008 2:14PM]

@SimonRichards (A.K.A. The first guy)...

Heh... That picture looks like the REAL Steve Balmer... to an engadget newbie, it may look like that is really him, and not a copied-and-pasted photoshop! Great job Engadget!!!

10 Points for the pic
0 Points for the reply system

[Kurian @ Apr 5th 2008 2:24PM]

Once you buy them over, get rid of their piece of crap bloatware called Yahoo Messenger.
Replace it with MSN something so that we can Messpatch.Be it and make it efficient.

[Chris in CA @ Apr 7th 2008 1:01PM]

You do know that Yahoo and MSN messengers already interoperate, right?

[Kurian @ Apr 7th 2008 11:52PM]

Yes, but the Yahoo software is extremely bloated.

[Matt @ Apr 5th 2008 2:28PM]

I just don't get one thing. If Microsoft can spend $44 bnto buy yahoo, WHY NOT spending it to improve your own service and make it a killer. For half this amount they could launch their own services. I think MS people are idiots..they should look at the success stories of Yahoo and Google and launch a similar successful services from each company, for example flickr equivalent, enable IMAP / POP on hotmail, get more into advertising and develop a kick ass search engine. Poeple will come. No need to get bits and pieces of other services. At the same time I'd like to officially announce that if Yahoo takeover will happen, Yahoosoft will not see a single penny from me for yahoo mail plus and flickr. I'm already fed up with the inablitiy to have IMAP access on Yahoo which i LOVE on Gmail. For flickr...well now there's Nokia's Ovi Share which is gainign more customers day by day and I'll gladly fork out $30 for the service.

[conor @ Apr 5th 2008 7:29PM]

ummm, yahoo does not have pop/ imap unless u pay gmail is free...
GOOGLE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Matt @ Apr 6th 2008 4:39PM]

Connor...that's exactly what I meant. I'm a paid subscriber of Yahoo and I'm already pissed as it is that there's no IMAP..only POP. Yet even shitty AOL is offering it free of charge so if MS will pick up Yahoo, this will be my good bye ticket unless they start providing IMAP. I don't like Yahoo's "desktop application mimicking" so they're scoring enough points to start pissing people off and steer them in the direction of Gmail. Becoming Microsoft's bitch will only speed up the process of paid subscriber's departure to competition

[DP @ Apr 5th 2008 2:35PM]

Microsoft is right about this one, the offer was more than generous. Shucks, I would cash my shares in.

[melloncollie @ Apr 5th 2008 2:36PM]

@Matt

Where have you been?
Microsoft is and has been a success story.
Much more than any current company.

This is called an acquisition. something that happens all of the time.
It's much easier to buy out a competitor than to develop (i.e. what Google has been doing).

[Cellenin @ Apr 5th 2008 2:39PM]

Google stock is falling and the economy is having a hiccup. Now is the best time to move, lower the bid and make the shareholders see the light of reason. Well played, Microsoft.