
Battered Yahoo Admits It Overplayed Hand; Open To New Microsoft Talks - breily
http://www.alleyinsider.com/2008/5/battered_yahoo_caves_admits_it_overplayed_hand_now_open_to_new_microsoft_talks
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god
I applaude Yahoo for not selling to Microsoft.

Yahoo is a legend and runs a couple of interesting websites and keeps doing
new stuff here and there. I like that. I want that to continue. I dont want
them to be swallowd by a company that I dont like.

And about the money... its only money. Do we all HAVE TO bow down to the
dollar and each and every day go the path of the most money? No. I dont. Im
free. And everyone who says Jerry HAS TO because he is the CEO of a public
traded company has simply been proven wrong. How cool is that? I dont want a
predictable world where everything is based on pennies. Lets celebrate some
rebellion ;-)

~~~
pchristensen
Actually, if you're the CEO of a publicly traded company, you are required by
law to act in shareholders' financial interest. That's the price of getting
access to the public equity market.

~~~
jimbokun
...and why, in hindsight, it would have been a very good idea to have voting
and non-voting shares.

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mattmaroon
Glad I closed my (relatively small) short position today then. I really didn't
see MS doing a hostile takeover. There were just too many poison pills for
them to swallow, and it was clear from the beginning that Yang and the board
were on an ego trip. They were nuts not to sign immediately.

Reality is setting in. Which makes me think maybe it's time to go long. What
do you all think?

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wanorris
Depends on whether Yahoo is ready to grovel to get Microsoft back to the
table. After all the cheap shots they've taken, I can't blame Microsoft for
wanting to wash their hands of the whole thing and move on.

Edited to add: on further review, groveling is certainly overstating the case.
But if Yahoo is willing to reach out and make it look like this can be a real
partnership both sides are actually interested in, it will be a lot more
doable.

The whole thing where they've been trying to make Microsoft look bad and act
like they want nothing to do for the deal hasn't benefited anyone.

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mattmaroon
I don't think that's the case though. It's just part of the game. Their
rationale for wanting Yahoo in the beginning probably has not changed. They
just realized that going hostile wasn't really an option.

It really wasn't either. Hostile takeovers happen rarely in tech because it's
really easy to create effective poison pills. I only shorted because Yahoo
seemed so obstinate. They've had a bucket of cold water tossed on their heads
now and are gasping for breath.

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gojomo
Anyone else think there's too many MSFT-YHOO soap opera stories here?

When it's done, I'm sure there will be some 'negotiation hack' lessons. In the
meantime, this is noise -- leaks, rumors, transient stock ticks. More
appropriate for 'Daytrader News' than 'Hacker News'.

~~~
edw519
This story has 34 upvotes and 22 comments. Someone is interested.

Sometimes, the biggest noise is the complaining about what is noise.

~~~
gojomo
Sure, some people are interested. But even they may, with further
consideration, wish they hadn't upvoted, commented-on or otherwise spent so
much time following minutiae of the MSFT-YHOO negotiating process.

Since there are no downvotes, we don't know if >>34 people are tired of such
headline-news-ticker-like microstories. But the real question shouldn't be raw
vote totals, but what people want this site to be.

TechCrunch floods the zone with morning, afternoon, night updates on MSFT-
YHOO, as do many other sites. And yet any one tactic or reversal in the middle
of this multi-month negotiation isn't likely to have any lessons for
hackers/startuppers/those-selling-their-companies-to-GYM-etc.

My comments are made in the hope that next time, some of those 34 upvotes
decide to pass, so the next frivolous "Yang writes letter" or "Balmer drops
new hint in internal email" story doesn't shoot to #1 in an hour or two.

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TrevorJ
The title of this submission makes me sad. Business sense aside, I really
prefer to live my life under the happy assumption that there are still
companies out there that can go to-to-toe with MS and not blink.

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wmorein
There are such companies: cf. [http://bits.blogs.nytimes.com/2008/05/05/how-
googles-checkbo...](http://bits.blogs.nytimes.com/2008/05/05/how-googles-
checkbook-stymied-microsoft/index.html)

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noelchurchill
This is like watching no-limit holdem .. but better!

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god
I still dont understand, how the this transaction would look like technically.

Say, Yahoo agrees to sell itself to MS. Then where would MS send the money to,
and how would the shareholders get that money?

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mdemare
Yahoo shares would be converted to MS shares + cash.

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goodkarma
Ouch.

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sabat
I guess this is part of 'business' that I'll never understand. Why on Earth is
it that Yahoo would have to bow down to MS? If you're thinking of the
shareholders, wouldn't you be concerned about what MS is going to do to Yahoo
(destroy it)? Is it only a (small) gain in share price that matters? Long-term
potential be damned?

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wanorris
After years of underperforming, the shareholders saw a chance to take a stock
that was selling for under $20 not that long ago and turn it into $33 or $34 a
share. If you're scoring at home, that's a 65% or better increase in the value
of their investment. And for options holders, there's a good chance that the
price change is the difference between the options being underwater (i.e.
worthless) and being worth quite a bit.

If that were your retirement fund or your stock options in your employer,
wouldn't _you_ want that money? And if you were a professional investor,
wouldn't you be downright berzerk at all that money being thrown away?

Computer geeks like to go around badmouthing Microsoft all the time, but
taking that attitude as a CEO or board member of a public company makes you
unprofessional and irresponsible. To shareholders, Microsoft's money spends
just like everyone else's.

Yahoo has underperformed for years. Sure, it has long-term potential. But
investors have little reason to think the current management will realize this
potential any better than the last couple of regimes. Meanwhile, as much as
geeks love to hate Microsoft, they have decades of experience in producing
enormous profits, and there's no particular reason to think that buying Yahoo
will change that.

This isn't just short term vs. long term. This is realizing a return on
investment vs. watching that return slip through your fingers. And investors
are pissed.

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timr
Here's the thing: if institutional investors truly believed that Yahoo was
overplaying a weak hand, they could have sold their holdings at $28/share (or
more).

These guys were gambling for a few bucks per share, just as much as Jerry Yang
and the Yahoo board.

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pchristensen
They couldn't liquidate hundreds of millions of shares at that price. The more
they tried to sell off, the lower the price would go. In the acquisition, all
of the shares would be bought at that price.

~~~
timr
Doesn't matter. If the institutional investors were so brilliantly prescient
as to anticipate the failed negotiations, they could have easily profited from
the knowledge. They didn't need to liquidate. Hell...simply making a public
statement on the deal would have put immense pressure on Yahoo's board to
sell. Where were they last week?

Point is, this stuff is largely crocodile tears. These guys weren't long
because they thought Yahoo would be bought out, they were long because they
saw value in the investment. Complaining now that Yahoo's negotiation strategy
was somehow "irresponsible", is either massive hindsight bias, or part of some
more complicated scheme....

