Microsoft’s offer to acquire Yahoo!
2/1/2008: In a letter to Yahoo!’s board last night, MSFT offers $31/share,
$44.6B, half cash and half stock according to investor’s choice.
61.6% premium over PYHOO= $19.18 on 1/31. Stock part = 0.9509 MSFT share.
PMSFT on 1/31: $32.60.
Web search market share: Google: 62%, Yahoo: 13%, MSFT: 3%.
AP, 2/2: “Search engines are crucial tools because they have become a central
hub in hugely profitable ad networks. Advertisers around the world are expected
to double their spending on the Internet during the next three years as more
people get their news and entertainment on the Web instead of television, radio,
newspapers and magazines. The trend is expected to create an $80 billion
online ad market in 2010, up from an estimated $40 billion last year.”
What are the assets that MSFT is acquiring, in addition to Yahoo’s existing
technology?
??
Why buy over developing?
Four advisors – Goldman Sachs, Lehman Brothers, Morgan Stanley, Blackstone
– expect to receive $1.3B in fees.
Effect on value:
2/4 (Monday) vs 1/31 (Thursday).
YHOO: +52.9% (PYHOO =$29.33) + $14.1B.
MSFT: –7.4%
– $22.5B. (Offer’s value: $29.85)(S&P: +0.16%)
Net change in wealth:
– $ 8.4B.
MSFT estimates cost savings of at least $1B a year (advertising, CapEx, R&D).
Offer made eight months after co-founder Yang replaced former CEO (Semel).
A new chairman (Bostock) has just been appointed.
MSFT’s online unit lost $245M in Q2 ended in 12/2008.
(MSFT combined Windows & Office units: +$6.5B.)
Last year, MSFT acquired aQuanytive, advertisement Co., $6B.
YHOO has poison pill, but not classified board.
Ballmer's (MSFT) letter:
"Depending on the nature of your response, Microsoft reserves the right to pursue
all necessary steps to ensure that Yahoo's shareholders are provided with the
opportunity to realize the value inherent in our proposal."
YHOO’s options:
White knight: News Corp, AT&T, TimeWarner (AOL).
But none interested (NewsCo said that) or able to compete with MSFT.
Break-up into search engine, Yahoo Finance, Yahoo Sports, e-mail. Sell pieces.
Sum of the parts might be greater than the whole.
GOOG contacts YHOO, offers help.
Antitrust issues:
The Department of Justice will review the competitive consequences.
Senate Antitrust Committee will hold hearings on 2/8 on "the state of competition
on the Internet."
EU regulations will examine the deal.
MSFT says that it will wait for approval, estimated before year-end.
GOOG lobbies against the deal: MSFT will be able to stifle innovation, leverage
its dominance on Windows to automatically steer users to its online services.
In December, the FTC’s approved GOOG’s $3.1 acquisition of DoubleClick
(advertising). EU regulators have not yet approved it.
2/5/2008: WSJ: MSFT signaled a willingness to “go hostile” by nominating its
own slate of directors to Yahoo’s board.
YHOO may hurt the deal by raising antitrust issues. But if the deal goes
through, it’ll hurt Yahoo given that it receives stock.
Value of some of YHOO properties:
Yahoo Japan (34%):
$8.9B
Alibaba (China, 40%):
$5.3B
Gmarket (Korea, 10%): $0.1B
Cash+securities:
$2.4B Total: $16.7B. But selling Æ high tax cost.
Æ YHOO’s U.S. properties (incl. search engine) are valued at $28B.
EBITDA 2007: $1.93B before compensation charge, $1.36B afterwards.
Analysts estimate synergy to be $1.3B, 30% above MSFT estimation.
YHOO, MSFT, S&P500,
2-year performance, as of 2/8/2008
2/11/2008: YHOO rejects MSFT bid. Unanimous board decision.
Value of offer now: $28.91/shr, down from $31.
AP: Language seems to invite a higher offer. Did not raise antitrust issues.
MSFT states that it is moving forward to consummate a transaction.
One of YHOO’s options: partnership with GOOG Æ advertisement revenues.
Rumor (Times): YHOO is exploring a merger with AOL.
Analysts: MSFT will raise offer.
Rumor (AP): MSFT was ready to pay $40 a year ago in talks. YHOO rejected
offer, confident it would do well.
Yang (cofounder, CEO) wrote that it the company is posed to rebound.
PYHOO: $29.87, +$0.67 (+2.3%)
PMSFT: $28.21, -$0.35 (-1.3%).
S&P500: +0.59%.
Price reaction around the rejection of MSFT offer by YHOO
(2/11: YHOO rejects MSFT offer)
Performance after the announcement
(relative to 1/31)
31-Jan
1-Feb
4-Feb
5-Feb
12-Feb
1,378.55
1,395.42
1,380.82
1,336.64
1,348.86
PYHOO
$19.18
28.38
29.33
28.98
29.57
PMSFT
$32.6
30.45
30.19
29.07
28.34
R-S&P500
0.0122
0.0016
-0.0304
-0.0215
R-YHOO
0.4797
0.5292
0.5109
0.5417
R-MSFT
-0.1083
-0.1307
S&P500
-0.0660
-0.0739
YHOO Rexcess
0.4644
0.5271
0.5490
0.5686
MSFT Rexcess
-0.0830
-0.0762
-0.0660
-0.1007
dValue YHOO
$12.38
14.05
14.64
15.16
dValue MSFT
$-25.15
-23.11
-20.02
-30.54
SUM in $B
$-12.77
-9.05
-5.38
-15.38
Values on 1/31: YHOO: $26.66B, MSFT: $303.18B
Beta
1.25
1.39
What explains the decline in MSFT?
2/13/2008: YHOO explores Internet asset swap with News Corp.
NewsCo will receive 20% of YHOO, will contribute Fox Interactive, MySpace
social network, other Internet assets, on-line newspapers, Wall St J. +cash.
YHOO also explores advertisement partnership with GOOG, merger with AOL.
PYHOO=$29.88 > $29.50 = Value of offer ($41B).
Analysts: MSFT will raise offer to $35-$36.
2/14/08: departure of head of MSFT’s online business group. Was hired to turn
around web business. Previously was CEO in charge of turnaround of ASK.com,
acquired by InterActivCorp for $2.3B.
Another exacutive departing: head of MSFT mobile phone software.
2/15/2008:
(1) YHOO prepares major strategic restructuring that will eliminate some areas
and expand others. Charge of $20M-$25M for severance pay.
(2) Most YHOO top institutional investors have more money invested in MSFT.
(meaning?)
(3) Report: Division in YHOO board between CEO Yang and investors such as
Chairman Bostock.
(4) Potential regulatory issue: e-mail. Nearly ¾ of Internet users have accounts
in either Hotmail or Yahoo.
2/19/2008: Bill Gates: MSFT offer will not be raised. Price of $31 is fair.
At the opening, MSFT rises, YHOO falls.
After closing: YHOO adopts a new severance plan that covers all full-time
employees, to apply for two years after a change of control.
Employees who lose their jobs without “cause” or quit “for good reason” will
continue to receive salary + medical benefits + reimbursement for outplacement
services, for 4-24 months. Analysts estimate it’ll cost $500M.
2/21/2008: MSFT announces that it will open up its software code, which will
enable competition.
Comments: MSFT wants to appease EU antitrust regulators ahead of YHOO
acquisition.
GOOG: Merger will threaten innovation, violate antitrust law, harm Internet
users.
MSFT: deal’s failure will make GOOG more dominant on the Internet than it
already is.
Commentators: MSFT is worried about Google.doc, “office” on the Internet.
YHOO adds more newspapers to its on-line advertisement consortium of daily
newspapers. Contains 1/3 of U.S. newspapers.
2/22/2008: MSFT: Will “maintain Yahoo’s significant presence in Silicone
Valley.” MSFT too employs 1,800 people there.
2/25: YHOO announces it is building Apex, an all-purpose ad platform to
integrate all types of digital advertising (including paid search).
2/26: YHOO launches of Yahoo! Buzz, a new social news site.
3/3: MSFT’s Ballmer: “The deal makes sense with the price and the structure we
announced.”
3/4: YHOO expands R&D through a new lab in Bangalore, India.
YHOO launches onePlace that organizes and manages mobile content.
3/5/2008: YHOO extends the initial 3/14 deadline for nominating candidates to
its board. Could postpone until July 12.
(DE law requires to hold a SH meeting within 13 months of its last one.)
Wang in letter to employees: “our objective here is to enable our board to
continue to explore all of its strategic alternatives for maximizing value for
stockholders without the distraction of a proxy contest.”
*Steps up talks with TW about AOL. Options: Acquisition or forming an alliance.
Both own technologies for targeting advertisement by the user’s surfing patterns,
which GOOG does not do.
*GOOG backs this combination, owns 5% of AOL LLC. (?)
*Next week, the EU is expected to approve GOOG-DoubleClick merger.
MSFT: it would give GOOG too much of a monopoly in the online ad business.
3/10/2008: Yahoo continues with business as usual:
* Signs a long-term agreement with LiveDeal
* Develops Internet news project with Dunkin Donuts.
MSFT’s chief software architect: MSFT will not immediately merge its
technology platform with Yahoo’s. Will not disrupt the experience of Internet
users and advertisers.
Financial report expected by the end of the month.
3/13/2008: MSFT-MSN media network: top executive is leaving for an LA
advertising startup Spot Runner.
3/14/2008: Disclosed: on 3/10 there was a meeting of MSFT-YHOO senior
executives. MSFT presented its vision of a combined company.
3/17/2007: YHOO: expects operating cash flow to rise over the next 3 years
from $1.9 B to $3.7 B.
Revenue projections for 2009: $7.1 B.
For 2010: $8.8 B.
Analysts’ estimates for 2009: $6.4 B.
Growth areas: Internet display and video advertising.
YHOO: assets will move MSFT from a “sub-scale” position in Internet search &
display, enhance its foothold in Asia, make profitable its losing on-line business.
3/18/2008: YHOO may have to sell its 39% ownership of Alibaba, Chinese
Internet giant. Contract enables Alibaba to do that in case of control change.
YHOO values its investment in Alibaba and Yahoo-Japan at $12.5B, $8.90/shr.
Interpretation of the contract’s provision may be different by YHOO and Alibaba.
Jurisdictions: U.S. and China. A problem.
http://finance.yahoo.com/tech-ticker/article/7899/Yahoo-Alibaba-The-Good-The-Bad-The-Unknown?tickers=MSFT,YHOO,GOOG,1688.HK
3/25/2008: PYHOO= $28.49, a discount to MSFT offer. PMSFT = $28.56. Analysts:
Deal may be at a price higher than $31.
A road show for investor put on by YHOO CEO and other execs leaves investors
unenthusiastic about YHOO’s plans and hopes.
3/31/3008: YHOO launches Shine, a new website for women ages 25-54.
Analysts: Sudden quiet around the deal. It is most likely in the mid-$30s.
4/6/2008 (Sunday): MSFT: if deal not reached by 4/26, it will do a hostile bid at a
lower price, and ask SHs in a proxy contest to replace 10 resisting directors.
Offer is worth $41B ($44.6B initially), $28.5/shr.
Cash part: $31/shr. Stock part: $26.00/shr. Meaning?
PYHOO = $28.36.
MSFT hired a proxy solicitation firm to help with a hostile bid.
MSFT: “Our proposal is the only alternative put forward.”
(YHOO claims that its revenue will rise by 70% in the next three years.)
YHOO has not yet set a date for SH meeting.
4/7/2008: YHOO: The offer undervalues the company. Open to negotiations.
On verge of turnaround.
PYHOO = $27.70, -2.3%. MSFT: $29.16, no change.
Since the offer, MSFT underperformed Nasdaq by about 10%.
4/9/2008: YHOO-Google announce a two-week experiment.
Google will show ads tied to 3% of queries made through YHOO search engine.
GOOG & YHOO have 81% of the search market.
Potential scrutiny by antitrust regulators.
MSFT: This will make the market less competitive.
4/11/2008: Businessweek: Many analysts bet on the offer raised to $35.
YHOO shows that it has more strategic options than has been anticipated,
putting pressure on MSFT.
4/21/2008: YHOO’s earnings report due tomorrow.
Analysts: it will determine the results of the battle.
http://finance.yahoo.com/tech-ticker/article/12540/Microsoft-Yahoo-Climax-at-Hand-(Probably)?tickers=MSFT,YHOO,GOOG
4/22/2008: YHOO’s earnings are better than expected, but not so outstanding
that would make MSFT to raise its offer (now<$43B).
Revenue forecast for 2008: +3%-15%.
4/23/2008: Ballmer: MSFT could go it alone without YHOO.
Between 4/21 and 4/23:
PYHOO = -1.7%. , PMSFT = +3.4%
S&P: -1%.
4/24/2008: MSFT reports NI falls 11%. Forecasts good 2009.
Deadline that MSFT set for YHOO before going hostile: 4/26.
4/28/2008 (Monday): The deadline set by MSFT expired over the weekend.
No comment from either side.
YHOO faces a potential proxy fight or being abandoned.
PYHOO = $26.43 (-1.4%). MSFT: $28.99 (-2.8%). (S&P: -0.11%.)
Ownership:
Capital Research & Mgt Co: 16.5%, Legg Mason: 7%, Growth Fund of America:
4.9%, Barclays: 3%, 6 large institutional investors holding together about 15%.
Insiders: 10%.
5/2/2008: Headlines (TechTalk):
Now Microsoft ‘leaning toward hostile' (but doesn't reject $35-$37 price).
http://finance.yahoo.com/tech-ticker/article/14317/Now-Microsoft-'Leaning-Toward-Hostile'-(But-Doesn't-Reject-35-37-Price)?tickers=msft,yhoo
Yahoo plays Google card: ‘changes balance of power' with Microsoft.
http://finance.yahoo.com/tech-ticker/article/14342/Yahoo-Plays-Google-Card-'Changes-Balance-of-Power'-withMicrosoft?tickers=MSFT,YHOO,GOOG
5/5/2008 (Monday): MSFT abandons its bid for YHOO.
PYHOO= $24.37,
-$4.30
(-15.0%)
(On 1/31: $19.10)
PMSFT = $29.08,
-$0.16
(-0.6%).
Nasdaq: -0.5%.
PGOOG= $594.90,
+$13.61
(+2.34%)(!)
10:32pm: “Yahoo’s Yang open to more Microsoft talk.” (Reuters)
5/6/2008: “Yahoo shares up on hope of talks, Google deal” (Reuters).
Investors anticipate that YHOO may yield to pressure from its largest SHs to
reconsider Microsoft's oral $47.5 billion offer [about $33/share], noting
comments by its CEO Jerry Yang that he is willing to do a deal with MSFT.
PYHOO = $25.72 (+5.5%). PMSFT = $29.70 (+2.1%). Nasdaq: +0.8%.
Fortune: “Silicon Valley is not a culture, but a religion … called open source…
(which) believes there is no god of the operating system. (Thus, they don’t like
Microsoft because they think it is the god of the operating system).”
Implied volatility on YHOO options, X=$25, 5/6/2008
Expiration
Implied Volatility
May (5/16)
70%
June (6/20)
57%
July (7/18)
55%
October (10/17)
46%
January (1/16)
39%
What is the information content of this table?
During the week of 5/5/2008: Rumor that MSFT is considering buying a larger stake
(or perhaps all of) FaceBook, the social net. It already owns 1.6% which it has bought
for $240M in 10/2007, implying a value of about $15B.
5/14/2008: Ichan buys a 50M shrs in YHOO (3.5%). Has 24 hours to reveal
whether he intends to put up an alternate slate (ahead of SH meeting).
Later: Icahn nominates 10 directors as replacements. SH meeting on July 3.
YHOO’s board insists on $37 offer.
PYHOO=$27.14 (+2.2%). Nasdaq: +0.9%. MSFT: +0.5%.
http://finance.yahoo.com/tech-ticker/article/16890/It-Ain%E2%80%99t-Over-Yet-Icahn-Enters-YHOO-Fray?tickers=yhoo,msft
5/16/2008: Revealed: YHOO’s board has been sued for improperly thwarting
MSFT increased offer of $33/shr, $47.5 B.
Claim: YHOO’s mgt conceals information on the law suit.
Legg Mason (6.3%) declared it would support $34/shr. PYHOO = $27.66.
5/17/2008: WSJ : “Without Yahoo, Microsoft has little to offer advertisers.”
Ichan has 10M shrs + options on 49M. (Total: 4.2%).
5/20/2008 (Tue): Talks between MSFT & YHOO since Sunday. (Reuters)
MSFT may offer to buy YHOO’s search business, including its stakes in Japan
and China, and take a minority stake in YHOO.
MarketWatch: Yahoo ‘breakup' proposal doesn't add up, unless it's a red herring.
MSFT is dead set on preventing alliance between YHOO and GOOG, since this
will end its effort in the search business.
http://finance.yahoo.com/tech-ticker/article/17932/Yahoo-Breakup-Proposal-Doesnt-Add-Up%2C-Unless-Its-a-Red-Herring
BusinessWeek: MSFT lacks Plan B.
Estimate: 40% of shares is held by arbitrageurs betting on the deal being done.
Ichan contacted directly and spoke to MSFT’s Ballmer.
http://finance.yahoo.com/tech-ticker/article/17906/Carl-Icahn%3A-Doesnt-Use-a-Computer%2C-But-is-Up-%24120M-on-Yahoo-Bet
5/21/2008: Ballmer: MSFT is discussing with YHOO a deal that might create
value, but not a whole acquisition of the company (Reuters).
Arbitrageurs are gathering YHOO stock, but unclear that Ichan can win.
Rumor that he has now over 100M shares.
Would you vote in support of Ichan’s proposed board???
http://finance.yahoo.com/tech-ticker/article/18496/My%2C-What-Big-Eyes-You-Have%3A-Carl-Icahns-Hedge-Fund-Wolf-Pack
5/22/2008: GOOG’s co-founder Page in a rare visit to Washington D.C.:
1) MSFT-YHOO deal will stifle innovation, create monopoly power.
2) Deal with Yahoo would not present antitrust problems.
Some analysts say that the deal would face stiff antitrust scrutiny given that the
two companies control about 80% of the U.S. search advertising business.
5/22/2008: YHOO postpones the SH meeting scheduled for July 3rd.
Analyst: Perhaps preparing a deal that would satisfy Ichan.
5/23/2008: YHOO’s board tells SHs "to disregard any proxy card sent to you by
the Icahn Entities or any person other than Yahoo.“
5/24/2008: MSFT unveils a system that rewards customers for doing search.
AP: “Microsoft as much as said its search strategy wasn’t working when it
offered in February to buy Yahoo to boost its search and advertising.”
Meanwhile… Rumors that Ichan purchased options. YHOO can hurt him by
postponing the shareholder meeting after the option expiration date.
6/2/2008: YHOO’s employee severance plan in case of MSFT takeover has
estimated payment of $0.5 - $2.4 B, or $1.5/share.
The payment is an increasing function of MSFT’s offer price. (!)
Yang did not tell employees that MSFT had earmarked over $1.5 B specifically
for employee retention.
Claim: Yang pushed for an extremely aggressive severance plan, in a clear
attempt to drive up the cost of the acquisition to Microsoft and to, in some case,
make it more economical for employees to leave than to stay on postacquisition.
MSFT offered in 1/2007 $40/share. Rejected by Semel (YHOO’s CEO).
Plans of alliance with GOOG did not exist before MSFT offer.
(Revealed in YHOO documents unveiled under judge order following a law suit
claiming that YHOO improperly rejected MSFT’s offer. )
6/4/2008: YHOO: Deal talks are ongoing with MSFT.
Ichan: YHOO’s board should cancel the employee severance plans, calling
YHOO’s action “self destructive”
AP: “Bostock defended the plan as the best way to retain and attract employees
during the uncertainty caused by Microsoft's takeover attempt.”
By now, Ichan spent over $1B, purchasing 4.3% of YHOO.
http://finance.yahoo.com/tech-ticker/article/24296/Icahn-Slams-Yang%2C-but-Needs-a-Plan-B
YHOO ‘s SH meeting set for August 1st (the previous date was July 3rd).
6/9/2008: Ichan attacks YHOO’s mgt, but has no plan beyond selling to MSFT.
Cooling of Yahoo-Google search outsourcing talks.
6/12/2008: YHOO rejected MSFT proposal to buy 16% of YHOO at $35/share,
plus buying its search business.
YHOO will allow GOOG sell search ads on its site.
PYHOO = $23.52, -10%.(Nasdaq:+0.4%).(6/13: PYHOO = $23.47, Nasdaq: +2.1%)
PMSFT: +4.13%. (6/13: PMSFT = +2.94%) Reuters: “investors showed relief that
the company would not be paying too high a price for a deal they considered
risky -- even though its biggest rivals on the Web aimed to work together.”
PGOOG: + 1.4%.
Price reaction to the 6/12 announcement of break-up of
talks between MSFT and YHOO
6/23/2008: Four senior YHOO executives leave.
More than 50 high-profile YHOO executives and managers have left in the past
three months or intend to leave.
Claims: Lack of management focus. Dismay with YHOO’s turnaround plan.
PYHOO: $21.45.
6/24/2008: Reports of renewed MSFT-YHOO talks about selling the search
business for $9B. May reflect internal pressure & leadership vacuum.
Deal with GOOG, expected to boost YHOO’s revenue by $800M, is delayed
because of regulatory\competitive concerns.
PYHOO: +3% (relative to market)
6/30/2007: Ahead of YHOO annual meeting on August 1st: YHOO asks its major
SHs to enable its board and management to prove that they have made the right
decision in rejecting MSFT offer.
Says it tried to re-open talks with MSFT on 5/17 and 6/8 but was rejected.
MSFT offered $9B for YHOO’s online search business + 16% stake in the rest.
YHOO expects that its advertisement partnership with GOOG will increase
revenue by over $1B.
7/2/2008: Rumor: MSFT plans to renew bid for YHOO search business together
with media allies, e.g., TW and Newsco.
7/7/2008: MSFT says it’ll renew negotiations with YHOO if board is changed.
Ichan says that MSFT does not want to re-negotiate with current management.
YHOO’s response: Make us an offer today. We are not against a sale.
PYHOO = $23.91, +12%.
7/8/2008: Value change over 5 days below: YHOO:+$6 B. MSFT: -$27 B.
7/9/2008: Legg Mason: will support Ichan if he pledges not to sell below $33/shr.
Owns 5.2%.
7/13/2008 (Sunday): YHOO rejects MSFT’s offer (made on Friday), supported by
Ichan, to buy its online search operations.
YHOO: it will dismantle its Internet franchise. These are core strategic assets.
Claims the business worth more. Sale will hamper later sale of company and
earning a control premium.
YHOO: willing to sell the entire company for $33/shr, $47.5B.
Offer was $1B for search business + annual $2.3B for 5 yrs, with a renewal
option, annual $1.6B-$3B for 5 yrs, + loan of $3.9B to finance $4.5 dividend to
SHs + invest $3.9B in YHOO. Also spinoff of Asian business, $9/shr.
7/15: TechTicker: “Now, Microsoft, Yahoo, and Carl Icahn all hate each other.”
7/17/2008: YHOO in a letter to SHs, asking support of its board.
1) Ready to sell at $33/shr if MSFT delivers certainty of value and of closing.
2) Will sell search business for the right price.
3) May spin\sell off the Asian assets and distribute the proceeds to SHs.
4) Moves forward with its strategic plan, incl. alliance with GOOG.
5) Criticizes Ichan: has no consistent plan and no knowledge in running YHOO.
7/18/2008: Legg Mason announces it would support YHOO’s management.
7/21/2008: YHOO nominates Ichan and 2 of his affiliated directors to the board,
settling the proxy fight. Ichan (4.98%) will support management’s nominees.
Board has 11 members.
PYHOO: $21.67, -3.47%. PMSFT: -0.85%. Nasdaq: -0.14%.
8/1/2008: YHOO board wins solid majority. Yang has about 85% “yes” vote.
Bostock (chairman) and other board members received about 80% “yes” vote.
8/5/2008: Recount of votes: 34% withheld for Yang, 40% withheld for Bostock.
Votes recounted after initial results were questioned by one of YHOO’s largest
SHs, Capital Research and Management.
8/13/2008: YHOO has spent $36M in fighting MSFT, Ichan.
8/14/2008: YHOO appoints ex-chiefs of Viacom and Nextel to board, following
the agreement with Ichan.
10/15/2007: YHOO in talks to acquire AOL for $10B in stock (TechWatch)
http://finance.yahoo.com/tech-ticker/article/96406/Yahoo-AOL-Likely-But-Microsoft-Could-Have-the-Last-Word?tickers=YHOO,AOL,GOOG,MSFT
MSFT lobbies in Wash. DC against the YHOO-GOOG deal.
10/16/2008: MSFT’s Ballmer in a conference: Deal with YHOO “makes sense for
their SHs and ours.” Later: “MSFT has no interest in acquiring YHOO.”
PYHOO rises in mid-day to close +5% in excess of Nasdaq.
http://finance.yahoo.com/tech-ticker/article/97852/Steve-Ballmers-Shot-Across-Yahoos-Bow
10/22/2008: YHOO announces 10% job cuts after Q3 earnings fall by 64%.
Weakness in display advertising. (GOOG does search-based advertising.)
Price rises 2.7% to $12.39 (Nasdaq: -4.8%).
11/3/2008: YHOO-GOOG deal: The DoJ considers a legal antitrust challenge.
Combined, control > 90% of the Internet search.
To appease regulators, the companies offer concessions.
YHOO will limit its revenue from the deal to 25% of its search advertising
revenue, cutting by half the expected $800M from the deal.
Also, deal is limited to 2 yrs instead of 10 yrs.
Opponents claim that the deal will enable GOOG to gradually increase
advertising prices and increase control over e-commerce.
News:
Executives leave YHOO.
YHOO plans cost cutting, reducing its workforce by 10%.
Ichan on TV: MSFT is welcome to try again an acquisition.
http://finance.yahoo.com/tech-ticker/article/106395/Yahoo-Google-Search-Deal-Morphs-Exec-Drain-Persists?tickers=yhoo,goog,msft
11/5/2008: GOOG abandons the deal with YHOO to avoid challenge by the DoJ.
11/6-7/2008: Yang: “The best thing for Microsoft to do is to buy Yahoo,“ how
would agree if the price is right.
Ballmer: MSFT is not interested anymore in buying YHOO.
11/18/2008: Jerry Yang (YHOO’s CEO) resigns.
PYHOO: +10.5% (over Nasdaq)
11/19/2008: Ballmer (MSFT): Not interested in buying YHOO. May buy the
search business.
YHOO searches a new CEO.
PYHOO: -14.2% (over Nasdaq).