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Microsoft Ready to Go Hostile in Yahoo Deal
Ultimatum to get real on the price
TinkyWinky




msg:3634818
 7:53 am on Apr 25, 2008 (gmt 0)

Microsoft Corp gave Yahoo Inc no hope of a higher takeover price, saying it was ready to go hostile or even call off its bid if Yahoo maintains "unrealistic expectations" of a better deal...

To be honest reading more and more into it - there's a hell of a lot more good M$ could 'potentially' do with $40bn - there must be hundreds of good start-ups and great ideas that could easily generate more revenues and gain eyeballs with the support and funding from above.

Reuters article [reuters.com]

 

mikedee




msg:3635004
 1:43 pm on Apr 25, 2008 (gmt 0)

Microsoft may have accidentally shot themselves in the foot with this one, they were trying to gain a better hold of the search market but they may have kickstarted Y! into actually competing. Yahoo's shareholders may think that they are better off sticking with the old management rather than jumping to a company that has consistently lost money in search. If the deal does not go through, maybe Yahoo will end up taking some of MSN's share of search.

There seem to be a lot of disruptive decisions being made at Yahoo these days, the deal is worth a lot less to MS today than when they first attempted to buy them out.

This announcement is as good as saying that they are backing down. Yahoo won by the look of it.

dakuma




msg:3635064
 2:45 pm on Apr 25, 2008 (gmt 0)

I agree with Tinky, take $40bn and start 40 companies (that's a cool Billon dollars for each startup!), that can all compete/innovate and stand on their own.

aleksl




msg:3635083
 3:17 pm on Apr 25, 2008 (gmt 0)

take $40bn and start 40 companies (that's a cool Billon dollars for each startup!), that can all compete/innovate and stand on their own

impossible to do. they would need 40 groups of very talented idea-oriented people, which is THE big thing Microsoft is lacking themselves. You can't recruit that much talent, period, you will never find it. And without talent, it is as good as money down the drain.

The second problem for MS is that if they give startups money it would create a "we made it" mentality for startups, and there will be no rush to compete.

The third problem for MS is that if you make $25 Bln per year in profits, you will need to buy a $100 million corporation every month to even make a blip in your accounting. That is another physical impossibility.

There's a reason companies with big money buy out bigger competitors. you CAN'T JOIN THEM and CAN'T CREATE THEM. might as well buy them.

JMHO

SEOMike




msg:3635098
 3:27 pm on Apr 25, 2008 (gmt 0)

you will need to buy a $100 million corporation every month to even make a blip in your accounting

Sold. Where do I sign?

mikedee




msg:3635103
 3:36 pm on Apr 25, 2008 (gmt 0)

impossible to do. they would need 40 groups of very talented idea-oriented people, which is THE big thing Microsoft is lacking themselves. You can't recruit that much talent, period, you will never find it. And without talent, it is as good as money down the drain.

Exactly, MS has been trying to find the next golden goose for years, just look at Xbox, Zune, UMPC, Popfly, Spot watch, Origami, Windows Mobile etc etc... They find it easy to spend money, but much harder to actually create a product that makes money and people want. Meanwhile Apple, Nintendo, Google etc manage to eat their lunch even when launching later.

Microsoft should concentrate on its core competencies (if they even have any these days) rather than trying to own the entire industry by force.

TinkyWinky




msg:3635117
 3:46 pm on Apr 25, 2008 (gmt 0)

harder to actually create a product that makes money

Hmmm that rings a bell for someone else hitherto mentioned yet in this thread !

I know feasibly M$ can't buy 40 companies - but 3 or 4 that have the potential and are already generating revenue...

What about buying strategic things like winzip.com (removes auto G toolbar download) Adobe (software products that help build a good proportion of what we see on the web!) etc.

They are not exactly direct competition and will not build MS's search as such.

Hell - Adobe's market cap is less than Y's and there's a much more solid income base (ignoring Silverlight...) !

dakuma




msg:3635133
 4:04 pm on Apr 25, 2008 (gmt 0)

aleksl,
I can't say I agree with your first point, I think there is enough talent out there I really do. Your second point is interesting though, and ahh ya, I definately agree that would be a problem.
MikeDee,
I think Microsoft has had one of it's best years in a long time. The Xbox 360 is humming along and doing better than almost anyone expected, and they have, hate them or not, introduced some very good software in recent months such as the Expression Studio 2(currently in Beta). Some of the other things you mention, Zune, UMPC etc etc.. Not successful, agreed, but where would they be if they just passed on all of these markets? As far as everyone eating their lunch, I'll agree with Apple and Google, but not Nintendo, slightly ahead in sales yes, but selling far fewer games as well. Throw in Xbox Live and for me at least Microsoft is decisively ahead.

Tinky,
Buy Adobe? Oh no! I'm still upset about Adobe buying Macromedia lol

mikedee




msg:3635142
 4:15 pm on Apr 25, 2008 (gmt 0)

What about buying strategic things like winzip.com (removes auto G toolbar download) Adobe (software products that help build a good proportion of what we see on the web!) etc.

Instead of spending money on buying companies that write useful software, why not put the functionality into Windows and Office? I think XP has a built in zip viewer but it is so poor that people have to download winzip to open zip files properly.

Linux and Mac have had the ability to read and write PDF's for ages, plus they both have built in zip reading and writing software. It is fairly easy to add, both formats are well documented and open.

If they do not know what to do with all their money, maybe just save it in the bank, get into the mortgage market or just give it to the third world. Giving it all to charity may change peoples opinions of Microsoft so maybe next time they try to buy a company, the company will actually want to be bought.

mikedee




msg:3635155
 4:31 pm on Apr 25, 2008 (gmt 0)

Some of the other things you mention, Zune, UMPC etc etc.. Not successful, agreed, but where would they be if they just passed on all of these markets?

Well, they might have a better OS than Vista and people may not be so reluctant to 'upgrade'. Maybe they would have had the time and money to actually respond properly to all the complaints about OOXML, and people would accept it. They would certainly have more money in the bank.

XBox is WAY behind the Wii in the sales, and it is only just ahead in the sales of PS3 even though the PS3 costs twice as much. Nintendo and Sony are both making money on their sales whilst Microsoft is bleeding money to get the Xbox to number 2 in US sales (only just). To me, success is based on how much you make, not how many items you sell.

So that leaves Expression 2 Beta which may or may not be good, I am prepared to believe it will be amazing, but it just looks like another lockin tool to boost sales of their server tools and client side Silverlight.

Bewenched




msg:3635177
 4:46 pm on Apr 25, 2008 (gmt 0)

This is so interesting to watch. I remember when Yahoo was a start-up down the street from a design firm I worked at in a pitiful warehouse district. And I remember when Microsoft actually had technical support in the United States. Now both of them have outsourced nearly all their work and support and wonder why the public in general are ticked off at them.

I cant even get my kids X-box fixed even under warranty. They just kept passing me all over India for 2 hours until I just gave up. Now it's just a very expensive door stop.

And Yahoo is no better. I cant get support for my DSL internet connection without talking to someone who can hardly speak english without screaming for a level 2 technician.

Take care of your customers and they will take care of you.

zett




msg:3635191
 5:09 pm on Apr 25, 2008 (gmt 0)

MSFT should walk away from the deal.

The merger is bound to be a disaster - the culture clash between MSFT and YHOO is too big. MSFT should put some (real) money into their online unit and let it run indepently from the rest of the company. At $45B there should be several alternatives for MSFT.

If Ballmer REALLY wants the deal, he can snatch up YHOO for a fraction of its current value in a year.

TinkyWinky




msg:3635242
 5:59 pm on Apr 25, 2008 (gmt 0)

see this is the sort of thing that you could 40 of ;) and have far less hassles than trying to buy Y!

Fast sold to M$ [news.moneycentral.msn.com]

grelmar




msg:3635267
 6:17 pm on Apr 25, 2008 (gmt 0)

Well, I'm anti MS, but on this issue, I'm going to side with MS's logic (even while I root for them to fail), and here's why:

MS is suffering from a bad case of the "Goliath" syndrome. When you're the top dog, everyone wants to take a crack at you. It's human nature. It means that you have to fight more, and harder, than anyone else, otherwise you're gonna get your head taken off.

Looking for the right company to buy up is a lot tougher for MS than you might think. It has to be big enough for it to be worth their while. It has to be in an area where they're weak, compliments their portfolio, and won't tick off the anti-trust regulators. Meeting those conditions really limits their options.

The culture clash isn't anywhere near as much as people are making of it. They're both industry heavyweights fighting battles with upstarts and newcomers, and "revived" older companies. Online, they're both looking at trying to break into/improve their offerings the same types of markets (search, advertising, portal, content delivery, online email and chat, social networks). The paths they've been taking in these arease are just divergent enough that if they get both sets of engineers working together, bouncing ideas off each other, that flash of brilliance might just happen (however unlikely).

Buy Adobe? Never happen. The regulators won't let that wash, MS already has too much dominance in desktop productivity without adding in Adobes dominance in graphics, mid to high end video editing, the best web development suite on the planet, etc. etc. Also, the culture clash between Adobe and MS makes MS and Yahoo look like BFF. Adobe is strong on Linux and Mac because they deliberately pushed alliances with both communities as a way of countering threats from MS's productivity software expansion. Adobe is moving towards embracing Open Source (in some areas), specifically to fight MS and piss them off.

Who else is out there up for the buying that can help MS fend off Google? AOL? No one wants AOL, the name is mud. So where do you turn? what really are MS's options?

They have two options:

1. Keep plowing money into their own online division (search, advertising, content, etc), and hope for the best.

2. Buy Yahoo! and keep plowing money into their own online division (search, advertising, content, etc), and hope for the best.

At least with option 2. they get some economy of scale, and a stronger initial position to fight from.

On a purely gut, emotional level, I hate MS. It's not a logical thing, I just hate them so very much. I'm willing to admit that. On a logical level, I can see why they want Yahoo!

My gut keeps hoping they fail.

zafile




msg:3635272
 6:22 pm on Apr 25, 2008 (gmt 0)

Nothing exciting has happened since Sun announced the acquisition of MySQL.

So indeed, it'll be fun to watch a hostile takeover of Yahoo.

Funny things happen when there's uncertainty about the US economy.

mikedee, I recently learned about your Mac preferences [ [webmasterworld.com...] ]. No wonder you're so anti-MS...

I just wonder which is grelmar's preferred platform. Then, I'll understand better his-hers points of view. Please give us a hint...

dakuma




msg:3635318
 7:09 pm on Apr 25, 2008 (gmt 0)

"Well, they might have a better OS than Vista and people may not be so reluctant to 'upgrade'. Maybe they would have had the time and money to actually respond properly to all the complaints about OOXML, and people would accept it. They would certainly have more money in the bank.

XBox is WAY behind the Wii in the sales, and it is only just ahead in the sales of PS3 even though the PS3 costs twice as much. Nintendo and Sony are both making money on their sales whilst Microsoft is bleeding money to get the Xbox to number 2 in US sales (only just). To me, success is based on how much you make, not how many items you sell.

So that leaves Expression 2 Beta which may or may not be good, I am prepared to believe it will be amazing, but it just looks like another lockin tool to boost sales of their server tools and client side Silverlight."

Interesting, Vista (and ya I use it on several machines and wouldn't go back to XP) is not the mess it's made out to be, only in a marketing/mindshare sense, and in that regard its almost a complete loss. Pity, now we'll just see the next OS sooner than expected.

Xbox 360 is behind in console sales only, in terms of games and especially in terms of ADD-ON sales via online community aka Xbox Live, Microsoft is leading the way. I can't say for certain how much they lose on each console or anything approaching "actual" numbers but the 360 is a success, if you consider they moved up one place (in cosole sales), and GTA IV is about to release on 2 consoles, 360 and PS3.

As far as Expression goes, give it a try, I'm using Expression Design (vector based app) for just about everything now, including site mock-ups. Granted it has nothing Illustrator doesn't have, its UI is much more streamlined and simple to use.

Regardless I'm of the opinion that for Microsoft to purchase Yahoo would be a mistake, it would not be the first one by them or others (Ebay and Skype), but it's clear that I can't fully comprehend the possible rewards they may see from the merger.

aleksl




msg:3635319
 7:09 pm on Apr 25, 2008 (gmt 0)

I think there is enough talent out there

Definitely. Just not enough these suckers who have talent AND want to work for Microsoft.

Disclaimer. I was interviewed by Microsoft once. It was rude, obnoxious, and an attempt to humiliate you into submission. Then I was offered a support position that paid 40% below my current salary.

NOONE WITH TALENT WANTS TO WORK FOR MICROSOFT.

Their offices are full of young people who just hang in there long enough to get M$ name on resume. At least this used to be some 7-8 years ago when I cared.

Take care of your customers and they will take care of you.

This is where big losses can easily occur. Customers look for sucker "caring" companies and abuse the relationships.

In one of our niches customers would have a nerve to call several times and tell us that this part didn't work, and then that part didn't work, and after a while they would have a complete 2nd widget for free.

zafile




msg:3635326
 7:19 pm on Apr 25, 2008 (gmt 0)

"On a purely gut, emotional level, I hate MS. It's not a logical thing, I just hate them so very much. I'm willing to admit that. On a logical level, I can see why they want Yahoo! My gut keeps hoping they fail."

On the opposite side, I simply admire Microsoft. I like their products and basically, have no complains.

In regard to Yahoo, I'll like to see a successful hostile takeover by Microsoft.

I want to see a hostile takeover in part because Microsoft failed to acquire Quicken in the mid 1990s. Microsoft failed because of Bill Clinton's government intervention.

Almost 10 years later, it'll be nice to make up for the Quicken defeat.

incrediBILL




msg:3635342
 7:37 pm on Apr 25, 2008 (gmt 0)

Having been in a conference room with MS during acquisition discussions of a startup I used to work for, all I'll say is I don't take anything they do or say at face value.

Has anyone considered that this whole MS/Yahoo takeover is merely a diversion from what MS is truly doing, something to keep the Yahoo board (and the press) busy and not paying attention to other MS activities?

Perhaps MS is making noise with Yahoo while silently scooping up some little startup search companies with disruptive technology that will make Yahoo obsolete and all this noise keeps people from looking in that direction.

Probably not the case, but you can never be sure. ;)

dakuma




msg:3635349
 7:43 pm on Apr 25, 2008 (gmt 0)

"disruptive technology", love that term.. and wouldn't that be the news of the year lol

aleksl,

I can see your point, and honestly I can't say whom I would choose to work for if I had the mad skills they all covet ;) If you asked me a year ago I would have said Google hands down... but today.. hmm I'd have to lean towards Nissan ;)

swa66




msg:3635526
 1:35 am on Apr 26, 2008 (gmt 0)

Seems to me the offer was hostile from day 1, regardless of what MSFT said.

ByronM




msg:3635536
 2:01 am on Apr 26, 2008 (gmt 0)


XBox is WAY behind the Wii in the sales, and it is only just ahead in the sales of PS3 even though the PS3 costs twice as much. Nintendo and Sony are both making money on their sales whilst Microsoft is bleeding money to get the Xbox to number 2 in US sales (only just). To me, success is based on how much you make, not how many items you sell.

Bullocks ;)

The Xbox has been profitable for what, 3 quarters now? They're pushing the entire xbox live service beyond what sony is trying to catchup to and Nintendo is years away from.

Nintendo has a gimmick, a great one that people love; for like a week. Friends then go look for the gimmick, love it, for like a week and move on.

Back to the topic. Yahoo should have been doing what MS kicked them into gear a while back. Its been in talks for what, a year now? I mean i heard of the potential offer a LONG time ago and its taken this long for Yahoo to step up their efforts? I don't buy it. Perhaps they're just trying to justify the share value to get the best for their investors.

CainIV




msg:3635552
 2:32 am on Apr 26, 2008 (gmt 0)

go hostile

What will they attack with, better SERP's? :P

zafile




msg:3635593
 4:26 am on Apr 26, 2008 (gmt 0)

"What will they attack with, better SERP's?"

Probably.

But shock and awe will be done with Yahoo's search patents!

mikedee




msg:3635719
 12:58 pm on Apr 26, 2008 (gmt 0)

The Xbox has been profitable for what, 3 quarters now? They're pushing the entire xbox live service beyond what sony is trying to catchup to and Nintendo is years away from.

Only using accounting tricks, the initial investment has already been written off. If you look at the entire history of XBox then they are making a loss. Remember that last year they made a $1 BILLION hit just because the machines were failing. You are probably looking at the last 3 quarters for E&D and seeing a small profit, even the last 3 quarters profit do not add up to last years $1b loss.

My estimate is around $10 Billion loss and around 750 million profit. Clever accounting can make that look like a ~250 million profit per quarter for the last 3, but in the real world they have lost around $9 billion on the venture.

I suppose that is nothing compared to the $40 billion + they are about to waste. I suppose in a year we will be hearing about how Yahoo is adding $2 billion per year to Microsofts profit. Everyone will forget that they are $40b in the red before they start and it is going to take 20 years to break even.

Chico_Loco




msg:3636032
 4:25 am on Apr 27, 2008 (gmt 0)

None of Microsoft's products from the past 5 years or so has been breathtaking. Frankly, I don't think any of their products have ever been breathtaking. However, they have to admit to themselves that their knowledge and vision of Internet Search is wrong. They promised the world with MSN/Live Search, multiple times, and failed in spectacular fashion. What has changed?

I do not believe that this will turn out to be a good deal for MS if the purchase does go through. The issue of gaining employees is almost a moot point, because many of them have left or will leave in the event of an acquisition. MS couldn't fold a piece of paper, let alone one large organization into another, especially when both are polar opposites.

solidcore




msg:3636043
 5:11 am on Apr 27, 2008 (gmt 0)

i want google to buy yahoo, then i want google to buy microsoft. then i want google to remove existance of both companys, and then i want google to buy our isps... and then we will live in a real google earth =]

skibum




msg:3636480
 6:36 am on Apr 28, 2008 (gmt 0)

Disclaimer. I was interviewed by Microsoft once. It was rude, obnoxious, and an attempt to humiliate you into submission. Then I was offered a support position that paid 40% below my current salary.

I interviewed out there once and found everyone very pleasant, lots of smart people out there. They didn't want to pay what I thought was a fair salary and that was the end of it.

I don't think any MSFT takeover of any sort of Yahoo! can lead to success. Seems like there is already to much bad blood out there and if you are Yahoo! why would you want to work for MSFT when they go about doing things the way they do?

aleksl




msg:3638665
 3:24 pm on Apr 30, 2008 (gmt 0)

skibum, I didn't go to Redmond, it was over the phone.

None of Microsoft's products from the past 5 years or so has been breathtaking.

I have to add - no new products. Because there's a couple good oldies. Windows XP SP1 was released in the end of 2002, it is as good OS if not better than any. SQL Server, the one they didn't originally create, but that's another story, is just an excellent database, especially 2005 version.

if you are Yahoo! why would you want to work for MSFT

and you wouldn't be even if takeover takes place. a management will probably change here and there, and a few departments get reorganized. you don't honestly think they will spend $40Bln and then blow it away by placing "Microsoft" on Yahoo!'s web pages? I am getting news and stock quotes from that, who would ever trust news from microsoft?...come on, really.

zett




msg:3638870
 7:02 pm on Apr 30, 2008 (gmt 0)

Yep. The integration is still a mystery to me. What does Ballmer think? (Does he even think about this?)

1) Yahoo! brand is left untouched. Then it is basically an investment. Some changes in the backend (from OpenOS to MS server) to be expected, possibly shifting the ad business (or even the complete online unit) away from MS to Yahoo!

2) Yahoo! powered by Microsoft -- basically the same as above, but ridiculous. Might drive people away faster than expected.

3) Going slowly from Yahoo! to Yahoo! MSN to MSN Yahoo! to MSN (or vice versa, from MSN to Yahoo!)? Possible, but will take a year or so, and will drive Yahoo! users away (if Yahoo! brand vanishes).

4) Microsoft Yahoo! -- Impossible.

IF Microsoft buys Yahoo!, they do so for the brand, so they will probably leave the Yahoo! properties untouched. I think they will indeed migrate MSN to Yahoo! and make the online unit as independent as possible (or as necessary?)! (Option # 1 above.)

This 32 message thread spans 2 pages: 32 ( [1] 2 > >
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