Yahoo responds to Microsoft ultimatum: more money please

As expected, Yahoo has responded to Microsoft's 3 week ultimatum this morning. The bottom line is pretty clear in a letter signed by Jerry Yang (CEO) and Roy Bostock (chairman). In the "Dear Steve" response to Ballmer they state, "we will not allow you or anyone else to acquire the company for anything less than its full value." They go on to state that, "We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction." Make no mistake about it, this is corporate war and will likely end with Yahoo's best engineers working for Google.

[Esat Dedezade @ Apr 7th 2008 6:48AM]

Lol, love that pic.

It looks like the Yahoo smiley's last stand, with a 'Y' shield and a '!' sword. It looks like its gonna get owned, outnumbered by although those MsN thugs.

But look carefully into the smiley's eyes. Look at it's maniacal smile. It is not to be underestimated....

MsN messenger*: "This is MADNESS!"
Yahoo Smiley: "This is YAHOO!!"


*catch the double meaning there? :)

[Bobs @ Apr 7th 2008 7:30AM]

"Cool! Downloadable switch blades! OH GOD NO!!" -MS

[I @ Apr 7th 2008 8:07AM]

Maniacal smile, you say...

I thought what I'd do was, I'd pretend I was one of those deaf-mutes

[supermeerkat @ Apr 7th 2008 8:23AM]

Now, if the whole sorry deal ended in a big slow motion / normal time fight between Microsoft and Yahoo, it'd be official the greatest thing ever.

[AJ in the East Bay @ Apr 7th 2008 9:16AM]

This is SPARTA!!

[Greg @ Apr 7th 2008 9:22AM]

Microsoft is an evil empire?
;)

[Patriks7 @ Apr 7th 2008 11:30AM]

THIS IS ENGADGET!

[Patriks7 @ Apr 7th 2008 11:30AM]

THIS IS ENGADGET!

[Patriks7 @ Apr 7th 2008 11:32AM]

THIS IS ENGADGET!

[John @ Apr 7th 2008 12:16PM]

No, this is Patrick.

[Do I look indie yet @ Apr 7th 2008 1:45PM]

Say goodBYEHOO!

[Montusama @ Apr 7th 2008 1:50PM]

No the picture is clearly showing how Microsoft is the mob and Yahoo is about to get whacked

[Dante @ Apr 8th 2008 8:28PM]

@Esat:

"*catch the double meaning there? :)"

I see what you did there.

[Matt @ Apr 8th 2008 10:27PM]

Steve Ballmer: Nothing here is what it seems. Yahoo is not the plucky hero, Microsoft is not an evil empire, and this is not the grand arena.

Jerry Yang: And that's not a smiley.

*BOOM*

[culdesacked @ Apr 7th 2008 6:49AM]

I love Jerry!!

[Andy @ Apr 7th 2008 6:49AM]

Steve Ballmer got a big mouth. He's just gonna gulp that can of chocolate milk in seconds.

[Taylor @ Apr 8th 2008 2:41AM]

When did chocolate milk start coming in a can?

[Jonathan-DBOSS @ Apr 10th 2008 8:19PM]

CAN you guess why?

[IkeTurner @ Apr 7th 2008 6:54AM]

Yahoo's share holders are count to hang Jerry Yang and the board memebers lol MS is already overvaluing Yahoo! Keep on dreaming Yang

[IkeTurner @ Apr 7th 2008 7:02AM]

Holly molly I can't type lol Sorry for the typos guys.
Should be :"Yahoo's shareholders are about to hang Jerry Yang and the board members lol MS is already overvaluing Yahoo! Keep on dreaming Yang"

[Coolone3000 @ Apr 7th 2008 8:59AM]

Lol, like you have any idea what yahoo is worth!

[System48 @ Apr 7th 2008 9:13AM]

RE: CoolOne3000

When Microsoft takes the offer to the stock holders they will quickly come to an agreement on how much more money they want above the current stock price. At the current price investors would see an instant 9.3% return, the math is easy.

[Jagster @ Apr 7th 2008 1:16PM]

@ Coolone3000

Before Microsoft offered to buy it, Yahoo was only worth around $19 per share. A stock, like anything esle (houses anyone?), is worth what the buyers are willing to pay. And in this case Microsoft offered a ~60% premium over what everyone else said Yahoo was "worth".

[Bryant @ Apr 7th 2008 2:08PM]

"like you have any idea what yahoo is worth!"

You're right. It's impossible to overvalue something that's effectively worthless.

[yoshi @ Apr 7th 2008 2:51PM]

Yahoo's latest reply is the correct one. What should they have said, "Oh, okay, we were kidding before, you can have the company for the price you offered"? And what would have resulted from that? Microsoft paying the price originally offered.

There is no downside to Yahoo holding out for more money. If Microsoft goes to the shareholders and the shareholders agree with Microsoft, Microsoft will still pay their original offered price. If the shareholders refuse, Microsoft may up the ante. Or Microsoft may up the ante before that to try to make things easier.

[hypereric @ Apr 7th 2008 3:13PM]

@yoshi: MS could just play it cool and not respond for weeks, months, or send out a "in response to you letter, we are taking an (indeterminate amount of time) to re-evaluate our offer to see if it's fair" letter. Let it go for weeks, possibly months... investors might start bailing left and right because of lack of confidence in yang (-$$$), and by then the stock has sunk so low, MS suddenly appears with a 62% over *current* stock value, which by then has fallen 10 bucks a share.

That's what I would do anyway. And I would make sure everybody in MS except the trusted inner circle is told "through the grapevine" that "MS is having serious doubts about buying yahoo now" and "seriously considering nixing the deal". And then, of course, the tech grapevine would make its way to the stock players grapevine, and then back yahoo.

[yoshi @ Apr 7th 2008 6:17PM]

Yeah, that could happen. And what also could happen is that Yahoo's stock could rise during that time. In which case, if Microsoft really wanted to buy the thing, they would have to up the ante above and beyond the new and higher stock price.

For some reason, people are only assuming that Yahoo's stock price will fall. As an investor, if I thought that a company's stock would only decline long-term, I wouldn't invest in that company. As an insider to a company that's in Yahoo's current position (Yang), if I thought that I could nudge my company's stock price up a few points by pulling a few rabbits out of my hat, I'd do everything I could to make that happen.

[Skullfighter @ Apr 7th 2008 9:43PM]

@ Yoshi and Hypereric
Or I would just spend 30 BILLION dollars on building my own name brand.

[Coolone3000 @ Apr 18th 2008 8:47AM]

Yes i understand math, but its more then that or Microsoft wouldn't be offering 60 percent over the "market value", its also about the potential that yahoo has. And i was simply stating that IkeTurner doesn't accurately know yahoo's value, just like i don't.

[Brett @ Apr 7th 2008 6:58AM]

Microsofts buying Yahoo, whats next, Intel buying Amd.... Or Mcdonalds buying Subway?
The United States buying Australia?

Me buying a Playstation?

At least Google loves being just Google.

[Rakar @ Apr 7th 2008 7:07AM]

Yeah, Google sure loves being Google. Especially when they are buying up things like Youtube.

[xkevin @ Apr 7th 2008 7:10AM]

Um, Google has bought a bunch of companies as well...

[NG @ Apr 7th 2008 7:26AM]

and don't forget.. the 700mhz auction

[Daren @ Apr 7th 2008 9:22AM]

ya brett, thats why google has bought:...

Deja
Outride
Pyra Labs
Neotonic Software
Applied Semantics
Kaltix
Primedia
Genius Labs
Ignite Logic
Baidu
Picasa
ZipDash
Where2
Keyhole, Inc
Urchin Software Corporation
Dodgeball
Reqwireless
Current Communications Group
Android
Skia
Akwan Information Technologies
Phatbits
allPAY GmbH
bruNET GmbH
dMarc Broadcasting
Measure Map
Upstartle
@Last Software
Orion
2Web Technologies
Neven Vision
YouTube
JotSpot
Endoxon
Adscape
Trendalyzer
Tonic Systems
Marratech
DoubleClick
GreenBorder
Panoramio
FeedBurner
PeakStream
Zenter
GrandCentral
Image America
Postini
Zingku
Jaiku

[Jagster @ Apr 7th 2008 1:20PM]

That list should have pretty much shut Brett up. Funny how many people don't understand that Google is a large corporation like any other that also wants to grow and make more money by any means at their disposal.

[salut @ Apr 7th 2008 2:35PM]

err. The only reason Microsoft is buying Yahoo! is to knock them out of the competition. The WWW is the next big thing, and Microsoft know all to well that they're far behind. But this isn't anything new, it's "typical" Microsoft, no heart no passion.

[Ed @ Apr 7th 2008 3:42PM]

But I thought google wasn't evil?

[Thrillhouse @ Apr 7th 2008 5:15PM]

@salut

"The WWW is the next big thing."
Wasn't that the title of a Popular Mechanics article in, say, 1991?

[Brett @ Apr 7th 2008 6:14PM]

well did ANYONE find my comment even slighty funny? But yer, im gonna think twice before embarrassing myself on a popular tech blog again. :(

[Brian @ Apr 7th 2008 9:38PM]

The only one of those I have ever heard of is DoubleClick, and I was not sorry to hear of it being bought by Google.

[xenon87 @ Apr 7th 2008 7:29PM]

Someone will always put in the effort to do it. God knows i have :D

[Sora267 @ Apr 8th 2008 9:21PM]

@Brian: "The only one of those I have ever heard of is DoubleClick, and I was not sorry to hear of it being bought by Google."

You've never heard of YouTube?! Go die. Right now.

[hypereric @ Apr 7th 2008 7:08AM]

Dear Yang,

It has come to our attention that you are caught up in the glory days of the great DOT.COM bubble of the nineties. Those days are over, Jerry. Please review the following chart over a ten year timespan:

http://research.scottrade.com/public/stocks/charts/charts.asp?symbol=YHOO

and pay close attention to your *present* P&E; according to it, you are still overvalued at your *current* stock price.

Sincerely,

Steve "Wild @ss" Ballmer

[giuliop @ Apr 7th 2008 9:21AM]

Dear Yang,

Given all the above, I'm so clueless and presumptuous that I want to buy your company at a very high price anyway, just because I can. Bill said so.
This way, I can acquire services that my company is already offering with no success, to further diminish their already dubious value; in the meantime, I also get to spend a lot of money that I don't really need beacuse hey, one can only eat so many hamburgers a day.

-Steve Ballmer'd

[hypereric @ Apr 7th 2008 10:57AM]

Dear Yang,

Please pay no attention to my identical twin brother, he is on a day-release from the "hospital". As both you and I know, it was no longer "your company" the day you let more then 50% of voting shares out in the wild.

However, he does have one valid point: I am offering you a preemo-premium price! ...I guess the old saying that a broken clock is right twice a day does have some merit.

AnyHoo (

[hypereric @ Apr 7th 2008 11:04AM]

Ahhh great! Is the reply system now cutting off comments?!?!?

giuliop: It ended with anyhoo , something or another then:

---------------------------

giuliop: just messin with you. Actually I don't know what MS sees in Yahoo other then a few divisions that would integrate well.

[MJZimmer88 @ Apr 7th 2008 7:13AM]

Can we call the new company Yahoogle? They can get a patent all that is the internet, and sue deuchecomm for using it to back their magenta-hogging ways.

[wesg @ Apr 7th 2008 8:51AM]

I think you missed an important detail...

[MJZimmer88 @ Apr 7th 2008 8:52AM]

haha! wow, okay, so um... bad joke? lol

[wesg @ Apr 7th 2008 10:24AM]

Well, yes it was a bad joke, but you missed the fact that Yahoogle = Yahoo + Google, when this entire story is about Yahoo + Microsoft