AOL May Be Plan B For Microsoft, But Yahoo Still In Focus
July 17, 2008
From CNN:
As Microsoft Corp.’s (MSFT) pursuit of Internet portal Yahoo Inc. (YHOO) drags on, Wall Street analysts are increasingly speculating the software giant may be focusing on a Plan B: Tying up with internet service provider AOL.
The speculation was revived on Wednesday when The Wall Street Journal reported Microsoft executives met with representatives of Time Warner Inc. (TWX), AOL’s parent company, to discuss a possible union. Microsoft has reportedly been in informal discussions in recent months to explore an AOL deal, which the Redmond, Wash.-based company sees as a potential way to boost its Internet presence.
The talks come against a backdrop of mounting pressure on Microsoft to boost the proportion of revenue it gets from the Internet. A combination of Microsoft and AOL would immediately position Microsoft as an online powerhouse by bringing it significant online traffic and scale to its display advertising, both of which could help it monetize its own Web properties. In 2007, AOL had about 11% of total U.S. online advertising revenue, according to eMarketer, an Internet research firm. Microsoft also had around 11%.
Whether a deal with AOL will happen remains an open question. Among the reasons for skepticism about such a deal is the fact that acquiring AOL would do little to turn around Microsoft’s currently weak position in Internet search advertising, the largest and fastest growing segment of the online advertising economy. AOL’s search advertising is outsourced to Google Inc. (GOOG), the market leader, and it’s unclear whether Google would continue to support this arrangement if AOL was owned by Microsoft, arguably the Mountain View, Calif.- based Internet company’s biggest rival.
Still, many analysts increasingly see the benefits of combining the two company’s online operations. The combined Web properties of the two companies, which would include AOL’s celebrity gossip site TMZ and social networking company Bebo, several online display advertising networks including Advertising.com and Tacoda.com, as well as Microsoft’s Hotmail email service, would be larger than industry leader Google Inc.’s, in terms of unique users, according to ComScore, another Internet market research firm.
Microsoft (MSFT) makes another offer for Yahoo! (with Icahn)
July 13, 2008
From Here:
Late Friday, Microsoft (NASDAQ:MSFT) and Carl Icahn made an offer to the Yahoo! (NASDAQ:YHOO) board. Microsoft would buy Yahoo!’s search business and Icahn would take the rest of the company. Yahoo! was given one day to respond.
The Yahoo! board rejected the offer.
According to Reuters, “This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo’s stockholders in mind,” Yahoo Chairman Roy Bostock said in the statement.
Michael Arrington says Microsoft has Crossed A Line
July 8, 2008
From Techcrunch:
Until today I’ve largely been a big supporter of Microsoft’s efforts to acquire Yahoo. A couple of days before Microsoft placed its initial $44.6 billion bid for the company, I told Fox Business Channel that a Microsoft merger had to happen to save Yahoo (and I certainly wasn’t the first to say this, I just had magnificent timing).
Throughout the ups and downs and stupendous drama of the negotiations, I held firm that a deal was in the best interests of both companies. Not because I’m a huge Microsoft fan, but because the health of the Internet requires a competitive search market. Google controls too much market share and too much related search revenue. A counterbalancing force is needed to keep the system healthy. And Microsoft or Yahoo standing alone cannot counter Google.
But when Microsoft pulled its bid just as Yahoo was about to accept and replaced it with a search buyout deal that I described as equivalent to them trying to get the milk for free instead of buying the cow, I began to wonder if things were getting out of hand. Since then, Yahoo has quite literally prostrated themselves before Microsoft to get a merger done, even perhaps at a price much lower than Microsoft’s original bid. And Microsoft has largely toyed with them.
Yesterday’s shenanigans, however, clearly crossed a line. Microsoft and activist Yahoo shareholder Carl Icahn jointly announced that they’ve been talking, and that Microsoft may be willing to entertain a full buyout offer once again. But only on the condition that Yahoo’s board of directors is replaced: “We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the “Search” function with large financial guarantees or, in the alternative, purchasing the whole company.”
Microsoft to Yahoo shareholders: replace Yahoo board and we’ll talk buyout
July 7, 2008
REDMOND, Wash. — July 7, 2008 — Microsoft Corp. today issued the following statement:
In the past week we have had the opportunity to discuss with Carl Icahn the prospects for a possible agreement between Microsoft and Yahoo!.
Despite working since January 31 of this year, as well as in the early part of last year, we have never been able to reach an agreement in a timely way on acceptable terms with the current management and Board of Directors at Yahoo!. We have concluded that we cannot reach an agreement with them. We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the “Search” function with large financial guarantees or, in the alternative, purchasing the whole company.
As Mr. Icahn notes in his statement today, it would be premature to discuss at this time important details such as the price or other terms of a possible transaction. We respect the right of Yahoo!’s shareholders to determine the destiny of their company, and we do not intend to engage in ongoing commentary on these issues in advance of Yahoo!’s shareholder meeting.
As we explained on June 12 when Yahoo! announced an agreement with Google, we believe that our proposed search acquisition and partnership would have delivered superior value to Yahoo!’s shareholders and the marketplace as a whole. We have not changed our position, even as we continue to move forward with our own online search and advertising offerings. We therefore welcome interest by Mr. Icahn in pursuing this and other discussions.
While of course there can be no assurance of a future transaction, we will be prepared to enter into discussions immediately after Yahoo!’s shareholder meeting if a new board is elected.
Bill Gates retires from Microsoft. Video of his last day.
June 28, 2008
Yahoo Strikes Deal With Google as Microsoft Talks End
June 12, 2008
Yahoo! Inc. agreed to let Google Inc. sell some of the advertisements it runs alongside Internet search results, seeking to shore up sales after ending talks with Microsoft Corp. about a combination.
The deal may add $800 million a year to sales, Sunnyvale, California-based Yahoo said today in a statement. The companies will delay implementing the program for up to three and a half months to give the U.S. Justice Department time for review.
Yahoo shares sank 10 percent today after the company said talks with Microsoft failed. The partnership with Google may boost the amount of money Yahoo gets when people click on ads, part of Chief Executive Officer Jerry Yang’s effort to deflect criticism from investor Carl Icahn, who blamed Yang for scuttling a $47.5 billion bid from Microsoft.
“Abdicating search to Google puts Yahoo in an untenable strategic position in order to obtain short-term gains,” Soleil Securities Group Inc.’s Laura Martin said in an interview. The Los Angeles-based analyst advises investors to hold Yahoo shares.
The agreement, which covers sites in the U.S. and Canada, may add as much as $450 million in operating cash flow in the first 12 months, Yahoo said. The partnership isn’t exclusive, meaning that other companies in addition to Yahoo and Google will be able to sell ads to appear on Yahoo’s pages. Yahoo’s revenue last year was $6.97 billion.
- from Bloomberg
Windows 7 starts race with Apple to full multi-touch desktop OS
May 29, 2008
The first public showing of Microsoft’s next major Windows update reveals an operating system with a familiar-looking dock and a more than slight emphasis on multi-touch displays.
Demonstrated at the Wall Street Journal’s D6 Conference, Windows 7 is described by observers from the newspaper as having a touch interface recognizable to “anyone who’s ever used an iPhone.”
Similar to what was demonstrated a year ago with the Surface table — as well as applications preloaded on the iPhone — the operating system will let users zoom into and rotate photos or maps using natural finger-based gestures, including pinching and flicking. Users can also draw multiple points at once a new version of Paint.
The Cupertino, Calif.-based firm has all the same taken early steps to develop and patent forms of multi-touch that would extend to a whole software platform, including pressure-sensitive screens as well as unique advanced multi-touch surfaces that would be used for typing in addition to gesture input. The iPhone by itself has over 200 associated patents, many of which relate to its multi-touch display.
Whichever of the two wins the contest for touch interfaces, Microsoft may also have to explain a more conventional similarity in Windows 7 when it arrives as soon as late 2009. The still very young operating system features a revamped, more colorful taskbar and the conspicuous addition of a Mac OS X-like dock for quickly managing apps.
“Multi-touch and a Dock. In Windows,” comments the Journal’s John Paczkowski. “Steve Jobs would be proud.”
Windows 7 Multi-touch Demoed at All Things Digital
May 27, 2008
Video: Multi-Touch in Windows 7
Firefox 3.0 Challenges the Big Web Browsers
May 26, 2008
The browser, that porthole onto the broad horizon of the Web, is about to get some fancy new window dressing.
Next month, after three years of development and six months of public testing, Mozilla, the insurgent browser developer that rose from the ashes of Netscape, will release Firefox 3.0. It will feature a few tricks that could change the way people organize and find the sites they visit most frequently.
Not to be outdone, Microsoft recently took the wraps off the first public test version of the latest edition of Internet Explorer, which is used by about 75 percent of all computer owners, according to Net Applications, a market share tracking firm. The finished version of Internet Explorer 8 could be released by the end of the year and is expected to have additional features.
Even Apple, which once politely kept its Safari browser within the confines of its own devices, is making a somewhat controversial push to get it onto the computers of people who use Windows PCs.
In other words, the browser war — the skirmish that landed Microsoft in antitrust trouble in the ’90s — is heating up again.
“The typical browser for today’s consumer doesn’t look all that different than it did 10 years ago,” said Larry Cheng, a partner at Fidelity Ventures, one of the firms that invested in Flock, a browser start-up. “That is an unsustainable trend that is the launching point for the second browser war, which will not be won by monopolistic muscle but by innovation.”
Browsers have always been viewed as crucial on-ramps to the Web. Nevertheless, after vanquishing Netscape, the first commercial browser developer, Microsoft waited five years before releasing the sixth version of Internet Explorer in 2006. Dean Hachamovitch, general manager of Microsoft’s Internet Explorer group, says the company was focused on plugging security holes during that time.
America Online, which acquired Netscape, spun off the nonprofit Mozilla Foundation in 2003. Its Firefox browser soon inspired an open-source movement backed by computer enthusiasts. Early versions of Firefox introduced features like a built-in pop-up blocker to kill ads, and tabbed browsing, which lets users toggle between Web windows.
- From NYtimes
Steve Ballmer Gets Egged
May 19, 2008
Microsoft proposes to buy Yahoo search
May 19, 2008
Microsoft Corp has proposed to buy Yahoo Inc’s search business and take a minority stake in the Web pioneer, stopping short of a full-out merger, a person familiar with the discussions said on Monday.
As part of the deal, Yahoo would sell its Asian assets including significant minority stakes in Yahoo Japan and China’s Alibaba Group, while Microsoft would buy a chunk of what remains of the company, the source said.
The talks were revealed by the two companies on Sunday, but they declined to reveal the terms of the discussions. Earlier this month, Microsoft walked away from a proposal to acquire Yahoo for $47.5 billion, or $33 per share, after Yahoo rebuffed the offer, saying it would only settle for $37 a share.
The new deal, if completed, would forge an alliance between the two companies that would represent an alternative means of competing with rival Google Inc, whose ubiquitous search engine has made it an online advertising powerhouse.
- From Reuters
Microsoft in new talks with Yahoo!
May 18, 2008
In a statement Sunday, Microsoft says it is considering a different kind of deal with Yahoo as it pursues ways to improve and expand its online services and advertising business. “Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo,” the statement said. “Microsoft is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo or discussions with shareholders of Yahoo or Microsoft or with other third parties.” - From AP
Microsoft Says It Proposed Collaborating With Yahoo
May 18, 2008
Microsoft Corp., the software maker that withdrew its $47.5 billion offer to buy Yahoo! Inc., proposed an alternative transaction with the Internet company to expand its online services and advertising businesses.
Microsoft is considering an alternative agreement that wouldn’t involve acquiring the whole of Yahoo, according to a statement from Microsoft today. Microsoft said it reserves the right to reconsider a bid to acquire Sunnyvale, California-based Yahoo.
Microsoft spent three months wooing Yahoo, owner of the second-most popular search engine, to compete with Google Inc. in Internet searches and online advertising. Ad sales reached $41 billion worldwide last year, according to Piper Jaffray & Co. Microsoft projected that may almost double by 2010.
Last week, Yahoo came under pressure from billionaire investor Carl Icahn to revive negotiations with Microsoft, which walked away from its offer May 3.
Icahn, who has threatened a proxy battle and has the backing of Yahoo shareholder Paulson & Co., said the combination would create “a force strong enough” to fight off market leader Google.
Icahn disclosed that he owned 10 million Yahoo shares and options to buy 49 million more. He submitted his own slate of nominees for Yahoo’s board, including himself, Dallas Mavericks owner Mark Cuban and former Viacom Inc. CEO Frank Biondi. All 10 of Yahoo’s current directors are up for re-election at the annual meeting on July 3.
- From Bloomberg
Reason 1001 to not buy a Zune: Microsoft May Build a Copyright Cop Into Every Zune
May 8, 2008
If you like to download the latest episodes of “Heroes” or other NBC shows from BitTorrent, maybe you shouldn’t buy a Microsoft Zune to watch them on.
A future update of the software for Microsoft’s portable media player may well include a feature that will block unauthorized copies of copyrighted videos from being played on it.
Tuesday, Microsoft announced that it would start selling video programming for the Zune, mainly TV shows. These include programs from NBC Universal, which has pulled its shows off Apple’s iTunes Store.
Late Tuesday afternoon I reached J. B. Perrette, the president of digital distribution for NBC Universal, to ask why NBC found Microsoft’s video store more appealing than Apple’s.
He explained that NBC, like most studios, would like the broadest distribution possible for its programming. But it has two disputes with Apple.
First, Apple insists that all TV shows have an identical wholesale price so that it can sell all of them at $1.99. NBC wants to sell its programs for whatever price it chooses.
Second, Apple refused to cooperate with NBC on building filters into its iPod player to remove pirated movies and videos.
Microsoft, by contrast, will accept NBC’s pricing scheme and will work with it to try to develop a copyright “cop” to be installed on its devices.
- From NYTimes
Ballmer’s kiss off letter to Yang, and Yang’s response
May 4, 2008
Dear Jerry. After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!. I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible. Read more
Breaking: Microsoft Walks…
May 3, 2008
fter a months-long standoff, Microsoft has abandoned its bid for Yahoo, people involved in the discussions today. Microsoft confirmed to BoomTown that talks between the two companies, which began in earnest Friday, collapsed Saturday when they could not agree on a price. According to sources close to Microsoft, the talks broke down this afternoon after a face to face meeting in the Seattle area that included Microsoft CEO Steve ballmer, Microsoft exec. kevin johnson, and Yahoo co-founders Jerry Yang and David Filo. According to sources, Microsoft offered $33 a share,Yahoo countered with $37 a share. - From Boomtown
Microsoft increases Yahoo offer, upped to over $31 per share
May 3, 2008
Microsoft Corp. finally dangled a higher takeover bid in front of Yahoo Inc. Friday, hoping to reach a friendly deal after weeks of saber rattling.
The Redmond, Wash.-based software maker upped its offer beyond the original value of $44.6 billion, or $31 per share, according to a person familiar with the matter. The specifics of the new offer weren’t known by this person, who didn’t want to be identified because the negotiations are still confidential.
The New York Times, citing unnamed sources, reported Microsoft boosted the offer by “by several dollars” per share, lending weight to the assertion by many market analysts that Microsoft can afford to pay up to $35 a share.
– From Variety
Microsoft-Yahoo deal may go hostile Friday
May 2, 2008
Microsoft Corp. may go hostile in its bid for Yahoo Inc. as soon as Friday, according to a published report.
Citing unnamed people familiar with the matter, the Wall Street Journal reported early Friday that the world’s largest software maker may be preparing to go straight to Internet pioneer Yahoo’s shareholders.
An announcement was “likely” to come Friday, according to the report, though the newspaper said its sources cautioned that Microsoft may delay.
Chief Executive Steve Ballmer told employees in a company assembly Thursday that he knows how much he’d spend to buy Yahoo and accelerate his company’s Internet play.
“We’re willing to pay for that at some level, and beyond that level we’re not willing to pay for it. I know exactly what I think Yahoo is worth to me,” the executive said. “I won’t go a dime above, and I will go to what I think it’s worth if that gets the deal done.”
But he didn’t offer a figure, and he didn’t say whether Microsoft is considering raising its unsolicited bid, worth $44.6 billion at the time it was made in early February.
The offer is currently worth about $42.4 billion, or $29.48 per share, based on Microsoft Corp.’s closing stock price Thursday. Yahoo Inc. has rejected the offer, saying it undervalues the company. Microsoft’s board has been considering whether to raise the bid to as much as $33 per share, according to The Wall Street Journal.
Via Yahoo
Microsoft plans next Yahoo move
April 27, 2008
Now that its friendly offer for Yahoo expired on Saturday, Microsoft has two options: launch a hostile takeover attempt or withdraw and seek other ways to grow its online advertising biz. The tech giant has given every indication it will go the hostile route and take its case directly to Yahoo shareholders.
Under this scenario, there is no guarantee how much it might pay for Yahoo.
Microsoft offered $31 per share in a late January bid valued at $44.6 billion, but Yahoo continues to maintain that the company is worth more than that. Last week, co-founder Jerry Yang cited its first quarter earnings to bolster the case for a bigger bid, but Microsoft didn’t see it the same way. On Friday, chief exec Steve Ballmer called the original cash-and-stock offer “quite generous,” pointing out that it was roughly 80 times earnings.
Ballmer then reiterated the company’s aim to take the plan directly to shareholders should Yahoo fail to warm up to the offer by Saturday’s deadline.
Yahoo to Microsoft “Make us an offer we can’t refuse”
April 7, 2008
Yahoo Inc is not opposed to Microsoft Corp’s bid for the Web media company, as long as it is at the right price, Yahoo’s board said on Monday in a letter to Microsoft Chief Executive Steve Ballmer.
“We have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders,” the letter said. “Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.”
Yahoo is responding to a three-week deadline issued by Ballmer in a letter to Yahoo on Saturday for Yahoo to agree to Microsoft’s $31 a share cash-and-stock offer or risk seeing the bid lowered. “Our board has been actively and expeditiously exploring our strategic alternatives to maximize stockholder value, a process which is ongoing,” Yahoo’s board said on Monday. “All of these actions have been driven by our overarching commitment to maximize stockholder value.
Via Reuters
Microsoft hires hack producer
March 31, 2008
Microsoft, seeking to expand offerings on its Xbox 360 console, has reached an agreement with a company headed by Peter Safran, the veteran Hollywood producer and talent manager, to produce original shows for distribution on the system. In an interview at his office in Los Angeles last week, Mr. Safran said his first round of programs would all be scripted, as opposed to reality shows, and would probably run under 10 minutes. He said he planned initially to focus on genres, like comedy and horror, that appeal to the Xbox 360 audience, which is heavily concentrated from the ages of 14 to 34, and tends to be more male than female. The first shows are expected to be available to viewers by the fall.
Via NYTimes
Report: Yahoo Board to Reject Microsoft
February 10, 2008
Sorry Mr. Bill….
“Yahoo Inc.’s board plans to reject Microsoft Corp.’s bid to buy the Internet pioneer, The Wall Street Jornal reported on its Web site Saturday. Read more