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Microsoft Gives Yahoo 3 Week Ultimatum

Microsoft Gives Yahoo 3 Week Ultimatum

by , 6:15 PM EDT, April 5th, 2008

Microsoft CEO Steve Ballmer presented the Yahoo Board of Directors a letter on Saturday that in no uncertain terms gives the Internet search company three weeks to agree to a buyout or face a more hostile take over attempt. The ultimatum states that Microsoft is ready side step Yahoo's Board and present an offer directly to the company's shareholders.

"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," Mr. Ballmer's letter said. "The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. 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."

Mr. Ballmer added that even though Microsoft considers Yahoo to be worth far less than it was when the original buyout offer was presented at the beginning of February, his company is not lowering its offer. He did, however, make it clear that if Microsoft goes directly to Yahoo's shareholders, the offer will be changed to more closely reflect the company's current value.

"During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably," he said. "By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects."

Microsoft presented Yahoo with an unsolicited buyout offer of US$44.6 billion on February 1 following the company's reported 23 percent drop in earnings. Yahoo rejected Microsoft's offer, and then began talking with Time Warner about a possible AOL deal to block Microsoft from attempting a hostile takeover.

Mr. Ballmer drove his point home on Saturday by stating "It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo's shareholders and employees. We think it is critically important not to let this window of opportunity pass."

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Dan Robinson Posts: 1 Joined: 05 Apr 2008
Subject: The Sound of Music

I can't understand why the Von Trapps . . . er . . . Yahoo doesn't want to accept Microsoft's offer.

Close Name:tuscmat Posts: 35 Joined: 06 May 2004
Subject: Value to Yahoo's employees!

That's a laugh. MS will gut Yahoo like a fish and the only value Yahoo employees will get is the big severance check. That means a piece of paper with the words "severance check" written on it.

Close Name:burrito Posts: 177 Joined: 07 Aug 2005
Subject:

if microsoft succeeds, they'll see hatred like never before.. stupid move on their part IMHO.

Close Name:Tiger Posts: 1018 Joined: 17 Jun 2003
Subject: Dear Yahoo shareholders...

You're about to get the Microshaft.

Close Name:acdc1174 Posts: 723 Joined: 16 Apr 2004
Subject: Re: Dear Yahoo shareholders...

Quote
Tiger wrote:
You're about to get the Microshaft.


The OW is now!


Close Name:breeze Posts: 26 Joined: 16 Oct 2006
Subject: Suggestion to Yahoo's CEO - Challenge msft with walkout

Yahoo could pull a publicity coup and become an instant Public hero by threatening an entire work force resignation if Microsoft takes over. That would mean Microsoft buys nothing but a name. Without Yahoos working the company Microsoft will never be able to achieve their objectives. If Yahoos have balls, they will prevail and become heros for their determination - if not they will become balls to a big .....

Good Luck Yahoo - We the public will support you!

Close Name:Guest
Subject:

Quote
breeze wrote:
Yahoo could pull a publicity coup and become an instant Public hero by threatening an entire work force resignation if Microsoft takes over. That would mean Microsoft buys nothing but a name. Without Yahoos working the company Microsoft will never be able to achieve their objectives. If Yahoos have balls, they will prevail and become heros for their determination - if not they will become balls to a big .....

Good Luck Yahoo - We the public will support you!


I would love to see that! Everyone who reads TMO should start broadcasting this as far and wide as they can... I bet Google would just LOVE to have a lot of those former Yahoo! employees...

Ballmer is such a frakking idiot that he thinks that buying Yahoo is going to make Monoposoft an instant competitor in the online search market. They'll do nothing but lose money and created rage and hatred against them... The only winner that will emerge from this is Google. I agree with the earlier comment to shareholders... if you own Yahoo! dump it and pick up Google while you still can get anything for Yahoo.

Close Name:Guest
Subject: this is funny, I'll have to sell my MS shares quick

this reminds me of when roxio (or whoever) bought Napster. There was nothing that the cultures of the companies had in common, and, sure enough,it did not work (which was way predictable).
MS and Yahoo, while different beasts, will not mesh well, and both companies will suffer, and thier competition thrieve (yeah Apple and Google)...

Close Name:burrito Posts: 177 Joined: 07 Aug 2005
Subject:

Quote
breeze wrote:
Yahoo could pull a publicity coup and become an instant Public hero by threatening an entire work force resignation if Microsoft takes over. That would mean Microsoft buys nothing but a name. Without Yahoos working the company Microsoft will never be able to achieve their objectives. If Yahoos have balls, they will prevail and become heros for their determination - if not they will become balls to a big .....

Good Luck Yahoo - We the public will support you!


you've got it wrong.. microsoft doesn't give a crap about yahoo's products and services.. all they want to do is take down a competitor. if all they are left with is a name, that will be fine by microsoft.

Close Name:Guest
Subject:

Quote
burrito wrote:
Quote
breeze wrote:
Yahoo could pull a publicity coup and become an instant Public hero by threatening an entire work force resignation if Microsoft takes over. That would mean Microsoft buys nothing but a name. Without Yahoos working the company Microsoft will never be able to achieve their objectives. If Yahoos have balls, they will prevail and become heros for their determination - if not they will become balls to a big .....

Good Luck Yahoo - We the public will support you!


you've got it wrong.. microsoft doesn't give a crap about yahoo's products and services.. all they want to do is take down a competitor. if all they are left with is a name, that will be fine by microsoft.


I don't think so. I think sweaty Steve really does think that buying Yahoo will help them put a dent in Google's search and advertising market share.

If their intent was to just take someone out, why not just directly target Google, and not even announce it? Why not just go through third party brokerage houses and start buying up Google stock as fast as they can?

No, this move is meant to intimidate Yahoo! to try and get them to accept the deal by circumventing them; they're offering the same money per share as their first offer, it's just that now they're making that offer to shareholders directly. MS knows their attack is causing Yahoo's stock to tank, and that the only way people will get back what they paid for it is to sell their shares directly to Monoposoft.

Sweaty Steve couldn't be more earnest on this one; his true colors are showing... intimidation, bribery, and threats. Mainstays of the Monoposoft business model for decades.

Close Name:gslusher Posts: 2088 Joined: 13 Nov 2002
Subject:

Quote
Guest wrote:

If their intent was to just take someone out, why not just directly target Google, and not even announce it? Why not just go through third party brokerage houses and start buying up Google stock as fast as they can?


I doubt that they could legally do that. As I understand it, once they own a certain percentage of the stock, they would have to publicly announce their intention.

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