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journal: win
NY Times: Microsoft walks away from Yahoo bid
Well, there you go.
The New York Times reports that after months of wrangling, Microsoft has walked away from its attempt to purchase Yahoo.1 The reason? Microsoft and Yahoo couldn’t come to terms on a price, so instead of launching a long and difficult proxy fight, Microsoft decided to give up on its takeover bid. You can read the details here.
Personally I think this was a good idea on Microsoft’s part. For one, the Yahoo takeover was becoming a bit of a distraction at a time when Microsoft has larger fish to fry (like convincing the world that Windows Vista doesn’t suck). For another, I still have a hard time how a Microsoft-Yahoo merger makes sense. Sure, Yahoo’s more popular than MSN and Windows Live, but Yahoo is still far, far behind Google, and with some exceptions, hasn’t been particularly innovative in recent years. What Microsoft needs is innovation to keep up with Google. Yahoo wouldn’t have brought it. And then you have the messy issue of trying to blend the two companies. Will it blend? Probably not. My guess is that Yahoo would have survived as a Microsoft subsidiary.
Where do Yahoo and Microsoft go from here? In the months since Microsoft made its initial bid, there have been rumors of Yahoo forming an alliance with another company (News Corp. and AOL). Meanwhile, Microsoft has to find some way to compete with Google being that it looks like which OS you use is becoming less important, giving people an excuse to look at Mac OS X and Linux. Could we see a Microsoft-Yahoo partnership of some sort in the near future?
What do you think? Leave a comment!
1You were right, Anthony.
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thinkback
Meanwhile, Microsoft has to find some way to compete with Google being that it looks like which OS you use is becoming less important, giving people an excuse to look at Mac OS X and Linux.
Neither the Mac OS nor Linux threaten Windows sales in any meaningful way. We’re talking about less that about 4% of the market even with both alternative operating systems in the height of their evolution.
If anything, it’s been Microsoft helping to facilitate the OS-independent computing as much as anyone recently. Silverlight, Web Services, Mesh, Web Mail, AJAX, .NET/Mono, Hyper-V/VPC… are all Microsoft technologies helping to push the market in that direction.
I think the new Ray Ozzie-led Microsoft won’t have the same problems as the Gates-led Microsoft. Having the various part of MS being less dependent upon one another (to create and protect revenue streams0 is ultimately going to result in better products (if not worse market share).
I agree. Microsoft’s biggest enemy is their brand. There’s a reason for that.
Sony’s market cap is $49 billion and buy-outs are always higher than the market cap. Yahoo!’s market cap is $38 billion, for example, and Microsoft offered them $46 billion. Microsoft’s cash on hand isn’t what it used to be. It’s $26 billion right now. Seen their stock chart? The best thing they had going was that Yahoo! takeover.
https://www.etrade.wallst.com/v1/stocks/sna pshot/historical.asp?symbol=MSFT
So Microsoft can’t afford to “buy” Sony, as if Sony would sell to them. That would just be ANOTHER division of Microsoft that is losing money.
Look at this 5 year comparison between Microsoft and Apple:
https://www.etrade.wallst.com/v1/stocks/cha rts/charts.asp?symbol=MSFT
Microsoft’s market cap is 274 million so they obviously COULD afford it.
It’s interesting that you bring up divisions losing money because MS still makes a lot more money than Apple and even the Xbox has been profitable for several quarters now.
Your stock charts don’t work for me because I don’t have an E-Trade account. However You should take a look at the 12 year APPL/MSFT chart…
Microsoft’s market cap is $263 billion with a B, not million, and the fact that you say Microsoft can afford to buy Sony with their market cap shows you don’t know squat. It shows you don’t even know what market cap is and you don’t know the basics of acquisitions. The market cap is the public’s opinion on the worth of the company by voting with their wallets when choosing a stock to buy.
What was Microsoft’s market cap in 1999? It was $600 BILLION! ROFL. That’s $760 BILLION in today’s dollars! Wow, you showed me! Microsoft has gone from $760 billion market cap to $263 billion. What a outstanding company!!!
Here is a 12-year comparison of Apple and Microsoft on Yahoo:
http://finance.yahoo.com/echarts?s=MSFT#cha rt1:symbol=msft;range=19960527,20080519;compare= aapl;indicator=volume;charttype=line;crosshair=o n;ohlcvalues=0;logscale=on;source=undefined
How do you like them apples?
Microsoft’s Q3 2008’s net income is down from year ago!
They really are a lousy, lousy company to own stock in, at least in the last EIGHT years it is.
Their entertainment div made a measly $89 million after losing billions over the last few years. Their getting their shorts handed to them by Nintendo. Maybe Microsoft can buy them to stop other companies from offering customers better products. Maybe Microsoft can buy Apple too to stop them from embarrassing Microsoft with superior products.
Their online division is still losing hundreds of millions per quarter.
Microsoft could afford to buy Sony. Ha! They can’t even offer Yahoo! their initial offer because their stock price has gone down since then! ROFL
Why would anyone WANT Microsoft to buy any company? They are inept! The only person who would want that is some kind of freak Microsoft fan boy. Get a life, dude.
1.
I think you’re making the same mistake that tech journalists make when they’re trying to fabricate a story; You’re only referring to web search. Yahoo Mail and Yahoo’s web portal are far and away the leaders in their respective categories. Google doesn’t do to well against Yahoo’s core business.
I don’t think that’s the problem. Google’s not innovating anymore than anyone else. They have a couple great products surrounded by many mediocre ones… just like everyone else. Google’s has the phenomenal brand name(s) and right now that makes all the difference.
Microsoft was clearly not trying to acquire innovative technology with the Yahoo takeover but more a great brand name and massive content generator. They were planning to use the content to push their other products like Silverlight, IPTV, Xbox Live, Windows Media etc. Remember, not too long ago they tried to start another massive content generator with MSNBC.
Now that the Yahoo deal is dead it looks like the only other possible acquisition that could give MS any portion of what they want is Amazon. They’ve got the content and the brand name. Other than that there’s probably just Sony (impossible) and Ebay on the fringes.
Sony would probably be the best but taking over a japanese company is notoriously hard for an American company.