two
Volume 6, Number 20 -- May 21, 2008

Micro-Hoo is Back On the Table, But In a Different Form

Published: May 21, 2008

by Alex Woodie

Spurred by an activist billionaire investor's participation in Yahoo's affairs and his attempt to revive the $47 billion deal, Microsoft is taking a second look at acquiring Yahoo, or at least a part of it. On Sunday, the software giant announced that it's back in talks with Yahoo to do some kind of deal. While Microsoft isn't talking specifics, the deal reportedly involves Yahoo selling its search and online advertising business to Microsoft for about $20 billion, while other Yahoo's assets would be sold off.

Just two weeks ago, any deal between Microsoft and Yahoo was dead, talks were over, and the two sides tried their best to move on and get back to business as usual after a bruising, three-month ordeal.

Then last Thursday, Carl Icahn entered into the picture. Icahn, the polarizing billionaire financier who has developed a fearsome reputation as a corporate raider and activist investor, bought 59 million shares of Yahoo (worth about $1 billion), announced his intention to force Yahoo back to the bargaining table via threat of a proxy battle, and submitted his nominees for Yahoo's upcoming board of directors election, which is scheduled for July 3 at Yahoo's annual meeting.

Taking the cue from Icahn, Microsoft suddenly had fresh legs to do some sort of deal. "In light of developments," the software giant stated in a press release on its Web site, "Microsoft announced that it is continuing to explore and pursue its alternatives" in regard to a deal with Yahoo.

What kind of alternatives? Microsoft answered that question with measured vagueness. "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."

Microsoft won't talk turkey, but according to the The Wall Street Journal, which cited anonymous sources close to the companies, the deal would involve Yahoo selling its search and online advertising business to Microsoft. Yahoo would also sell its Asian assets, and Microsoft would acquire a minority stake in what remained of the company.

Yahoo's search and advertising business is worth about $20 billion, according a Journal source, while Yahoo's Asian assets would garner about $10 billion on the market, which could go back to shareholders through stock buybacks or dividends, the Journal says.

The potential deal raised some eyebrows. If Yahoo wouldn't sell the entire company to Microsoft for $47 billion (CEO Jerry Yang held out for $53 billion, which Microsoft would not do.), then why would Yahoo agree to sell its most prized possessions, its Internet search engine--which was only recently eclipsed by Google in terms of volume--and its online advertising business, which is a distant second to Google?

Yahoo may not have much of a choice in completing some sort of deal with Microsoft, especially considering its mounting troubles with shareholder lawsuits and the new revolt spurred by Icahn.

While Icahn doesn't own enough of Yahoo to cause much damage yet, that could quickly change, as he is seeking SEC clearance to sink billions more into Yahoo to force the issue. Icahn also has the backing of some of the biggest independent Yahoo shareholders, which could give him a voting block rivaling Yahoo co-founders Yang and David Filo, who together own about 134 million shares, or about 10 percent of the company.

With the threat of a proxy fight for control of Yahoo renewed, a deal could be completed as soon as the end of this week, according to reports. Or the matter could just die. Again.

"There, of course, can be no assurance that any transaction will result from these discussions," Microsoft said, just in case there wasn't enough uncertainty about the deal.

At this point, uncertainty is the only thing that's certain about this deal.


RELATED STORIES

Microsoft Withdraws Yahoo Bid, Won't Go Hostile

Micro-Hoo: Where Does It Stand Now?

Ballmer Downplays Yahoo's Financial Results

More Wheeling, But No Dealing in Micro-Hoo

Yahoo Rebuffs Microsoft's Threat of a Hostile Takeover

Microsoft Won't Raise Its Yahoo Offer

Yahoo Moves to Block Proxy Battle in Microsoft Takeover Bid



                     Post this story to del.icio.us
               Post this story to Digg
    Post this story to Slashdot


Sponsored By
DANIK CONSULTING

Handcrafted Web Apps Large and Small

A New York City-based boutique IT Consultancy specializing in custom-built, high-end, database-driven web applications for businesses.

If you need a web application built, whether it's in ASP.NET, PHP, or Advanced Mongolian Kung-Fu, we can do it - quickly, with a minimum of fuss, and on budget.

Find out more at www.danikconsulting.com


Editor: Alex Woodie
Contributing Editors: Dan Burger, Joe Hertvik,
Shannon O'Donnell, Timothy Prickett Morgan
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
Go to our contacts page and send us a message.

Sponsored Links

COMMON:  Join us at the annual 2009 conference, April 26 - April 30, in Reno, Nevada
Storage Guardian:  Remote backup services at a special rate of $8/compressed GB/month
NowWhatJobs.net:  NowWhatJobs.net is the resource for job transitions after age 40

 

 

IT Jungle Store Top Book Picks

Getting Started with PHP for i5/OS: List Price, $59.95
The System i RPG & RPG IV Tutorial and Lab Exercises: List Price, $59.95
The System i Pocket RPG & RPG IV Guide: List Price, $69.95
The iSeries Pocket Database Guide: List Price, $59.00
The iSeries Pocket Developers' Guide: List Price, $59.00
The iSeries Pocket SQL Guide: List Price, $59.00
The iSeries Pocket Query Guide: List Price, $49.00
The iSeries Pocket WebFacing Primer: List Price, $39.00
Migrating to WebSphere Express for iSeries: List Price, $49.00
iSeries Express Web Implementer's Guide: List Price, $59.00
Getting Started with WebSphere Development Studio for iSeries: List Price, $79.95
Getting Started With WebSphere Development Studio Client for iSeries: List Price, $89.00
Getting Started with WebSphere Express for iSeries: List Price, $49.00
WebFacing Application Design and Development Guide: List Price, $55.00
Can the AS/400 Survive IBM?: List Price, $49.00
The All-Everything Machine: List Price, $29.95
Chip Wars: List Price, $29.95


 
The Four Hundred
The Demographics of i Sales and Shipments

The i Edition of the BladeCenter S Finally Launches

HP More Than Doubles Services Biz with EDS Acquisition

Mad Dog 21/21: Saying No No No

A Word Cloud of IBM Server Brand Names

The Linux Beacon
NYSE Euronext Trades Mainframes and Unix for Linux and X64

Canonical Founder Calls for Synchronized Linux Releases

AMD Ships Low-Power Barcelonas as Two More Execs Exit

New and Updated Barcelona Boxes Debut from Sun

VMware Tweaks Virtualization Stack, Boasts of Greenness and Sales

Four Hundred Stuff
Symantec Combats Phishing with New Services Offering

BCD Slings a New C#-Based GUI with Catapult 7.0

SkyView and Innovatum Formalize Partnership with New Product

Profound Eliminates OLTP Requirement with Web Enablement Software

140 Apps and (Hopefully) Counting for i 6.1

Big Iron
NYSE Euronext Trades Mainframes and Unix for Linux and X64

Top Mainframe Stories From Around the Web

Chats, Webinars, Seminars, Shows, and Other Happenings

Four Hundred Guru
Writing Secure PHP Applications

Use PCOMM Scripts to Execute Remote PC Commands

Admin Alert: Things to Do When Adding Drives to a System

System i PTF Guide
May 17, 2008: Volume 10, Number 20

May 10, 2008: Volume 10, Number 19

May 3, 2008: Volume 10, Number 18

April 26, 2008: Volume 10, Number 17

April 19, 2008: Volume 10, Number 16

April 12, 2008: Volume 10, Number 15

The Unix Guardian
New and Updated Barcelona Boxes Debut from Sun

HP More Than Doubles Services Biz with EDS Acquisition

Java Performance Is OS Agnostic on Power6 Gear

As I See It: Soothing the Savage Programmer

VMware Tweaks Virtualization Stack, Boasts of Greenness and Sales

Four Hundred Monitor
Four Hundred Monitor's
Full iSeries Events Calendar

THIS ISSUE SPONSORED BY:

Danik Consulting
SafeData
MKS
Storage Guardian
Solidcore


Printer Friendly Version


TABLE OF CONTENTS
Micro-Hoo is Back On the Table, But In a Different Form

Developers Cool to Vista, Evans Study Finds

Global Sales Save HP's Financial Cookies in the Second Quarter

Symantec Combats Phishing with New Services Offering

Microsoft Heads Aberdeen's List of Top 100 Tech Companies

But Wait, There's More:

Microsoft Ships Windows HPC Server 2008 Beta 2 . . . Force Microsoft to Support ODF, Group Asks EC . . . IDC Cautiously Reaffirms IT Spending Projections for 2008 . . . IBM Announces Improved X64 and Cell Blade Servers . . . Dangerous Times: Ballmer Dodges Eggs, While Gates 'Sued' Over Broken Toe . . .

The Windows Observer

BACK ISSUES





 
Subscription Information:
You can unsubscribe, change your email address, or sign up for any of IT Jungle's free e-newsletters through our Web site at http://www.itjungle.com/sub/subscribe.html.

Copyright © 1996-2008 Guild Companies, Inc. All Rights Reserved.
Guild Companies, Inc., 50 Park Terrace East, Suite 8F, New York, NY 10034

Privacy Statement