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April 7, 2008

business

Watch out, Yahoo: it’s hungry hungry Ballmer

Posted Apr. 7, ’08, 8:01 AM PT by Dan Moren
Category | Business

Steve Ballmer & Jerry YangIt is on like flan (I’m working on coining some new catch phrases to add some spice to the blog). The battle between MSFT and YHOO has escalated from genial takeover bid to full-fledged hostile conflict. Over the weekend, Microsoft CEO Steve “Bwahahaha” Ballmer fired off a letter saying that if Yahoo continued to be stubborn and obstinate, Microsoft would appeal directly to the company’s shareholders (our paraphrasing, natch). Furthermore, such action would have “an undesirable impact” on Microsoft’s bottom line.

The Yahoo crüe (as we hear they prefer to be known) responded much as you might expect: by reiterating their earlier response that Microsoft’s proposal “substantially undervalues Yahoo!.” The exec team of Ray Bostock and Jerry Yang took some time out to twist the knife a bit, saying:

Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal.
How do you like them apples, Balmy? Plus, since announcing the takeover bid back in February, Yahoo’s stock has increased from trading around $20 a share to around $27 a share.

Playing the diplomatic card, Yahoo said that it was “open to all alternatives that maximize stockholder value,” including a deal with Microsoft—if that deal “represents a price that fully recognizes the value of Yahoo!.”

So where lies the future of this weighty conflict? Seems like even if Microsoft does continue to pursue Yahoo in a hostile fashion, it’s going to take a lot of time, effort, and money on their part. I wonder: is it really in their own best interests? Can they even back off now, or is risk of perceived failure too high? Either way, somebody better feed Ballmer before he tries to eat Yang’s head.

One thing’s for sure: if this keeps going the way it’s been, Microsoft’s going to have to fetch up the ketchup for sure.


2 Comments

fletcher Author Profile Page said:

I wonder how a hostile takeover will play in the regulatory agencies that would need to approve this deal. Microsoft has competing technologies for everything they would buy with Yahoo. Their purchase of Yahoo would result in a serious consolidation of Web properties and a loss of competition in any number of different areas. Is this really the kind of thing an abusive monopolist should be able to do?

April 7, 2008 8:24 AM
Ken said:

I'll bet Microsoft just pulled out a letter from the last company they took over and did a find-and-replace to Yahoo.

Clippy: "It looks like you're doing a hostile take over..."

April 7, 2008 8:46 AM

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