(dumbass) Yahoo CEO Yang is now on the hot seat

SAN FRANCISCO - Yahoo Inc. Chief Executive Jerry Yang has gotten what he wanted: a chance to prove his company is worth more than the $47.5 billion that Microsoft Corp. offered to buy the Internet pioneer.

It will be a daunting challenge, as Yang will be pointedly reminded Monday when investors are expected to show how little they think of Yahoo without a takeover bid on the table. Faced with resistance from Yang and the rest of Yahoo's board, Microsoft withdrew its offer over the weekend.

[From Yahoo CEO Yang is now on the hot seat - U.S. business- msnbc.com]

Let the lawsuits begin.

Jerry Yang just turned down an offer to buy Yahoo for $47.5 billion. This was the second offer, which was still lower than what he counter offered to the original bid. Microsoft walked away, since their second offer was already a stretch.

The anti-Microsoft camp is delighted, being too god damn stupid to realize that this could easily be the end of Yahoo as we know it. On Monday morning Yahoo is going to take a nasty dive, which will trigger the first shareholder lawsuits against Yahoo for not doing what was in the best interest of the shareholders. Microsoft is going to recover a little bit from the egg in their faces from three months of saber rattling.

And the next high profile company that receives an unsolicited offer from Microsoft is going to be a hell of a lot more receptive about it than Yahoo. The problem right now is that even if somebody were to step up and offer more than the $47.5 billion for Yahoo, it would be a stupid deal. There is no way the company is worth half of that.

Microsoft and Yahoo met to discuss merger: report | Technology | Reuters

NEW YORK (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research) and Yahoo Inc (YHOO.O: Quote, Profile, Research) met on Monday to discuss Microsoft's takeover offer for the Internet company, the Wall Street Journal reported on Friday, citing people familiar with the matter.

The meeting was said to be the first since Microsoft made its unsolicited offer for Yahoo, worth nearly $42 billion, on January 31. Yahoo rejected the offer as inadequate last month.

[From Microsoft and Yahoo met to discuss merger: report | Technology | Reuters]

I love how they call it a merger, as if the end result of this mess is going to be a new company called MicroYahoo! or something like that.
The article goes on to say that the meeting was not a negotiation, that instead it was a way for Microsoft to pitch their vision of a combined company. If by combined they meant Microsoft as it is today, plus possession of whatever Yahoo! users don't jump ship between now and the merger, plus whatever other cool stuff Yahoo! owned that Microsoft has no use for it.
Yeah Flickr, I am talking about you. You are looking forward to very limited choices in the future:
1. As is. Flickr stays as is, with a redesigned logo that adds "A Microsoft company" to it.
2. Same as #1, but with the MSN butterfly instead of the word Microsoft.
3. All of Flickr gets migrated to some new Microsoft-centric platform.
4. Whatever Microsoft uses for photo sharing is migrated TO Flickr, plus the branding changes in either options 1 or 2.
5. Flickr is left alone, maybe even as a stand alone company owned by Microsoft but retaining its own branding.

And that's just one Yahoo! owned service. This drama is going to play out on every single one of their properties.

Microsoft to authorize Yahoo proxy battle - U.S. business- msnbc.com

SEATTLE - Microsoft Corp. will authorize a proxy battle for Yahoo Inc. this week to convince the Web company's shareholders to agree on a takeover deal that the Yahoo board so far has rejected, the New York Times' DealBook blog said on Tuesday.

Quoting people briefed on the matter, the Times Web site said that Microsoft, which has been expected to raise its cash-and-stock bid originally worth $44.6 billion, would seek to nominate a slate of directors by March 13, if Yahoo's board did not enter talks.

[From Microsoft to authorize Yahoo proxy battle - U.S. business- msnbc.com]

Can't we all just get along? First Yahoo said that Microsoft's offer was not good enough (the balls!), then the whole financial press assumed that they would meet halfway at $35. Next, Microsoft said nope, we stand firm by our original offer. And now this: they are ready to go the proxy war route. You wanted a hostile takeover? You got it.

Yahoo board set to rebuff Microsoft bid: report - Yahoo! News

SAN FRANCISCO (Reuters) - Yahoo Inc's (YHOO.O) board believes Microsoft Corp's (MSFT.O) unsolicited bid of $44.6 billion to acquire Yahoo "massively undervalues" the company and directors are set to reject the offer, the Wall Street Journal reported on Saturday, citing an unnamed source.

Microsoft's $31 per share offer fails to take account of the risks that a merger between the world's largest software maker and Web media giant would be rejected by regulators, the paper reported, citing "a person familiar with the situation."

[From Yahoo board set to rebuff Microsoft bid: report - Yahoo! News]

And the plot thickens.
There is a lot of activity on the web due to the leaked announcement, so far my favorite reads are Phil Greenspun's position that the "Yahoo Board seems to be insane" and the obligatory clusterfuck over at Slashdot.
What I find shocking is how basically everyone noticed that the bid is simply crazy. I know literally nothing about corporate finances, but I can tell that there has to be something wrong with a company that is trying to buy another one for 62 times the amount it earns.
Not only is that crazy, but then the Yahoo board counter offers for $40. Even if this a negotiation so both sides agree on $35, for fuck's sake, what the hell?
Is it even legal for the Yahoo board to turn down such an offer? Whatever happened to the grand old American tradition of "take the money and run?"
So far the predictions that I have seen are so wild that I may have come up short when I started describing this mess as a soap opera:
1. Yahoo counter offered $40 so both sides would meet at $35.
2. Yahoo has some other deal that lets them float without getting swallowed whole.
3. Microsoft doesn't care how much they have to pay for Yahoo. They can turn around and turn this into a real hostile takeover attempt.

I bet Microsoft stock holders are excited about the prospect of the company blowing their cash reserves into AOL/Time Warner part II.

More suitors for Yahoo tip up - The INQUIRER

JUST when you thought the Yahoo deal could not get more silly, Apple and Rupert Murdoch's News International are apparently thinking of matching Microsoft's bid for the search outfit.

The pair need to match Vole's $44.6 billion bid for Yahoo and for Apple that would mean a lot of iPods and Murdoch would have to sell his favourite watch.

[From More suitors for Yahoo tip up - The INQUIRER]

I told you it was a soap opera! How long before that teenager that runs Facebook decides to jump in with his own bid? At this pace *I* will be the last one to try to buy Yahoo. Hell, at today's stock prices I doubt I could merge this blog with Yahoo in exchange for ONE share of Yahoo stock.
Or maybe it is a tactic to shift attention to the FCC's 700MHZ spectrum auction.

So Microsoft decides to (try to) buy Yahoo ...

And what did Google do? They blogged it.

I guess it's a sign of the times. I just hope that the blog does not turn into the corporate equivalent of what Kofi Annan would call the UN's "strongest warning:"

First of all, I disagree with their characterization of the offer as a hostile bid. I am a bit rusty after my failed attempt at an MBA almost a decade ago, but I do remember that hostile takeovers happen when somebody tries to takeover a company without the cooperation of the board. If the board accepts, it has to go through due diligence, otherwise the bidder has to rely on just public information, which means a hell of a lot more risk.
Basically, the main reason for calling it a hostile bid is because Microsoft did it. Had Google or Apple done it, it would be seen as business as usual.

And so the Microsoft/Yahoo soap opera starts

Image by judland, used under the Creative Commons license.

Earlier today, we were set us up the bomb: Microsoft wants to buy Yahoo, badly. They are willing to pay $44.6 billion for it. That figure kept most of the people busy until sometime this afternoon some genius figured out that, horror of horrors, Yahoo owns Flickr!

Oh boy, we got us a rebellion.

This is the kind of thing that I was referring too a while ago, when I decided to bail out of Flickr into the less sexier Picasa. While Picasa is nothing more than a simple photo dump (with really handy hooks to online printing, thank you), Flickr is a full fledged community. And what is an integral part of every community? Douche bags that think that they own the site and that its mere existence is a constitutionally protected right. $25/year buys them the right to dictate to stock holders how the company should be run.

Where were they when Flickr was sold to Yahoo? Yahoo is a big faceless monster, no different than Microsoft. Why these people did not go up in arms?

Suddenly Picasa looks extremely attractive, don't you think?