Say No to Microhoot – Microsoft Withdraws Its $47.5 Billion Takeover Bid
So once upon a time, these two crazy college kids over a decade ago, seen the potential in this thing called the “Information Super Highway”, they thought this “Internets” thing just might be the wave of the future… so Jerry Yang and his buddy David Filo, bought a strange sounding domain name and started a company called Yahoo.
So fast forward to 2008 where…
Microsoft Corp., withdrew its $47.5 billion bid to takeover and buy Yahoo Inc., on Saturday, May 3rd, scrapping its plan to buy the worlds Number 1 Internet icon. Microsoft hoping amalgamating its resources with Yahoo would topple online search and advertising giant and rival, Google.
The decision for Microsoft to walk away from the offer after last ditch efforts to negotiate an acceptable sales price proved unsuccessful. The negotiations reached a breaking point when Yahoo co-founder, Yang flew to Seattle to meet with Microsoft CEO Steve Ballmer and Kevin Johnson.
Microsoft offered and was willing to pay Yahoo $47.5 billion, where Yahoo reportedly demanded close to $53 billion US, this according to Ballmer.
This abrupt ending came as a surprise, as many believed that Microsoft wanted to close this deal badly enough to even consider a hostile takeover – a risky move that would have involved replacing Yahoo’s current board that rejected the bid. Balmer had threatened a hostile takeover last month.
So it is believed that Microsoft still could make another run at Yahoo later this year, this especially if Yahoo continues to report weaker earnings, driving their stock price even lower. At that time, Yahoo could be a victim for a takeover, at even for a lower price than the $33 per share Microsoft offered over the weekend. Yahoo’s stock fell 16 percent on Monday to just over $24 a share, this based on the weekend news.
So why does Yahoo play extreme hardball in its negotiating strategy? One analyst wrote that the latest Yahoo decision “may likely go down as one of the more destructive decisions for shareholder value in the history of Internet stocks.”
So once upon a time, Jerry Yang, with his friend David Filo, started Yahoo in 1994, they were both graduate students at Stanford University…