TECH NEWS/MEDIA

May 6th 2008

Yahoo Stock Plunges After Microsoft Withdraws Bid

After Microsoft withdrew its $33-a-share offer for Yahoo on Saturday, the question was how far Yahoo’s stock would drop. On Monday, the markets gave an initial answer: plenty.

Yahoo’s shares closed down 15 percent, or $4.30, at $24.37 after closing at $28.67 on Friday — a day when the companies were said to be escalating their talks on a merger. The shares recovered some ground after losing about 20 percent at the start of Monday’s trading.

Microsoft’s own shares edged down 16 cents to close at $29.08, from their Friday close of $29.24. And shares of Google — a rival of both companies but now a potential partner of Yahoo — were up $13.61, or 2.3 percent, at $594.90.

How long Yahoo’s stock will stay down will largely depend on the company’s next moves. And its successful resistance to Microsoft’s pursuit set up a clear challenge for Yahoo’s chief executive, Jerry Yang: prove to investors that the company is worth $37 a share, the price he was willing to sell it for.

People close to Yahoo said that Yang and his team greeted Microsoft’s decision as a victory. High-fives were exchanged Saturday afternoon when they learned Microsoft was backing down.

Yet some Yahoo shareholders, large and small, have indicated that they favoured a deal at around $34 to $35 a share. Even those who were holding out for a higher price said a merger with Microsoft made strategic sense.

“I don’t believe that Jerry Yang as a founder, as someone who is emotionally attached to the company, was really looking out for my interest as a shareholder,” said Darren Chervitz, co-manager of the Jacob Internet Fund, which owns about 150,000 shares of Yahoo. “I don’t think anything Yahoo puts out there is going to be comparable with what Microsoft was offering.”

The entire board backed Yang’s desire to reject Microsoft’s offer, said a person involved in the negotiations who was not authorized to speak publicly about the matter. But unhappiness with Yang could spread through the company’s ranks.

“If the stock drops as far as I think it will, a lot of employees are going to be angry and many key employees could leave,” said a Yahoo executive, who asked to remain anonymous to avoid upsetting his superiors.

Source - International Herald Tribune

May 4th 2008

Microsoft Withdraws Bid For Yahoo

Microsoft Corp.’s pursuit of Yahoo Inc. ended abruptly Saturday when the world’s largest software maker withdrew a sweetened $46 billion offer and said it would not make a hostile bid for the Internet company.

Microsoft said the breakdown came despite having raised the bid to $33 a share, or $5 billion above what it said was the current value of the offer and a 70% premium compared to its original offer.

The offer was valued at $31 a share when it was made in January. Yahoo stock closed Friday at $28.67 a share.

“After careful consideration, we believe the economics demanded by Yahoo (YHOO, Fortune 500) do not make sense for us,” said Microsoft (MSFT, Fortune 500) CEO Steve Ballmer.

In a letter to Yahoo Chief Executive Jerry Yang, Ballmer said that Yahoo wanted at least another $4 a share, or $5 billion in value, added to the deal, bringing it to at least $37 a share.

Read Ballmer’s letter to Yang

Ballmer also told Yang that taking the offer directly to shareholders would not be “sensible.”

“This approach would necessarily involve a protracted proxy contest and eventually an exchange offer,” Ballmer wrote. “Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft.”

Ballmer said he was concerned that a further collaboration between Yahoo and Google (GOOG, Fortune 500) - which he called “the dominant search provider” - would make an acquisition undesirable for several reasons.

Yahoo officials indicated their pleasure with the end of the Microsoft bid.

“Our independent board and our management have been steadfast in our belief that Microsoft’s offer undervalued the company and we are pleased that so many of our shareholders in expressing that view,” Yahoo chairman Roy Bostock said.

Yang, in the same statement, called the Microsoft bid a “distraction” and said that Yahoo will now focus “on executing the most important transition in our history so that we can maximize our potential.”

Source - Fortune

April 28 2008

Deadline Up - Mircosoft’s Move

On April 6 we posted an article on Microsoft bid to acquire Yahoo. The software giant gave Yahoo a 3 week deadline to respond. Well the deadline expired at midnight Saturday and not a squeak from either side was heard.

So can we then expect a hostile takeover from Microsoft for Yahoo, the Internet service company.

Here’s what TechCrunch had to say on the issue.

“Citigroup’s Mark Mahaney says in an April 25 report there is a 45% chance of a merger at a price somewhat higher than the initial bid, a 40% chance that Microsoft will go hostile, a 10% chance that Microsoft walks away, and a 5% chance for deal at the original bid to be accepted. That means he thinks a deal in some form is 90% likely.

Marc Andreessen lays out the “go hostile” game plan in a blog post partially written by two merger and acquisition attorneys. If that’s the way this goes, Microsoft needs to announce their alternate board slate and finalize the lobbying of shareholders.

It’s Microsoft’s move. Expect something by mid week.”

April 6 2008

Microsoft to Yahoo - Three Weeks Deadline Or Face Hostile TakeOver

Microsoft CEO Steve Ballmer in an April 5th letter addressed to Yahoo’s board of directors has given the internet search engine 3 weekes to accept its buyout bid. Failing that, “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.”

The letter also states ‘that action will have which an undesirable impact on the value of your company from our perpective which will be reflected in the terms of our proposal.” In short if Yahoo fails to accomodate the 3 week deadline, Microsoft can and may reduce their take over offer.

Microsoft’s offer of $31 a share {cash and stock} comes more than 2 months after the software giant made its unsolicited takeover offer for Yahoo.

During that time Yahoo had been in talks with Google and AOL/Time Warner, looking for deals and partnerships in an effort to sidestep Microsoft’s unsolicited takeover attempt.

As for now the offer value at $41b would make it the biggest ever takeover in the high tech industry.

Microsoft’s deadline is 26th April.

Yahoo shares fell from $26.90 to $28.36 after the close on Friday.

{Taken from International Press Reports}

March 21th 2008

Mozilla Says Firefox 3 Ready for Prime Time

A new version of Mozilla’s popular Firefox Web browser is ready for download with improved security and memory use as the tiny company takes a stab at Microsoft Corp’s dominant Internet Explorer.

The program’s creators told Reuters on Thursday that the privately-held company’s trial version of Firefox 3 browser is ready for the masses to use after months of development. Until now, the company has discouraged average Internet users from moving on from Firefox 2, which was launched in October 2006.

“In many ways it (Firefox 3) is much more stable than anything else out there,” Mozilla Corp Vice President of Engineering Mike Schroepfer said in an interview. Key rivals to Firefox are market leader Microsoft’s Internet Explorer and Apple Inc’s Safari browser.

Engineers at Mozilla are still putting the finishing touches on the software and hope to release the final version of Firefox 3 by the end of June, Schroepfer said. Mozilla is in a battle with Microsoft, which unveiled an experimental version of its Internet Explorer 8 in Las Vegas earlier this month and is looking to expand its presence on the Web through its bid to acquire Yahoo Inc.

Additions boost security and allow users to run Web sites when they are not connected to the Internet. Mozilla also says Firefox 3 uses less computer memory than Firefox 2. Until now Mozilla has discouraged the typical computer user from exploring these new features. But its developers said on Thursday that the situation has changed and that they will be revising their Web site. As of Thursday afternoon, the Web site still stated: “We do not recommend that anyone other than developers and testers download the Firefox 3 beta 4 milestone release.

It is intended for testing purposes only.” But they said that as they concluded their fourth round of tweaking their software, they determined it was ready for prime time.

A fifth round of changes, due to begin within the next few weeks, will involve “tuning the visual look and feel of the program” and further improving its stability,” Schroepfer said.

{Taken from Reuters News}.