Microsoft and Yahoo Price Talk in "Mid-$30s"; Deal Odds "50-50"
Microsoft and Yahoo are still negotiating. Price talk is said to be in the "mid-$30s range". Given that two days ago the bid/ask was $33-$37, this likely means $34-$35. The New York Times says the odds of reaching a deal are still no better than 50-50.
*UPDATE: The WSJ confirmed our earlier assumption: Microsoft has been silent because Microsoft and Yahoo are now negotiating seriously about consummating a friendly deal. Microsoft has raised its bid "by several dollars."
According to the WSJ, a "deal was not imminent and the people familiar with the matter said an agreement was not likely on Friday. The people cautioned that the talks could fail to produce an accord."
The NYT adds that Microsoft has increased its price by "several dollars". Yahoo's stock, which has been climbing all day, has now spiked.
EARLIER: Some folks seem to be under the impression that Microsoft (MSFT) is having trouble making up its mind about what to do about Yahoo (YHOO) and that that's why we haven't heard anything.
Please.
The silence suggests that two companies are negotiating furiously behind the scenes. The fact that CNBC's David Faber was able to report this morning that we won't hear anything until the weekend (if then) suggests that the companies have found--or are close to finding--common ground.
In fact, the longer the silence lasts, the more likely we are to get a deal. The companies are very close--$33 and $37, per the Journal--so a deal seems likely even without serious negotiations. But at this point, if there were any true deal-killers on either side, Microsoft already would have walked (or gone hostile or whatever).
See Also: Now Microsoft "Leaning Hostile" (But Doesn't Reject $35-$37 Price)
A lot of marbles on the floor, and the last thing they want is someone coming in knocking them out. Forcing businesses, and regular Joes to buy the new flavor of Windows and Office just doesn't work like it used to.
You used to need a new OS to be able to use certain hardware and games, now everything works great with XP and people are having mixed results with getting hardware to work with Vista. The only real benefit I saw for Office was Excel being able to handle 1MM lines instead of 65k. If you're a business that isn't affected by this - you're probably not springing for this. Now, Microsoft is a jack of all trades, and Google is holding the Ace.
I can only hope that somewhere someone is planning on how to do Mobile right. The opportunity and revenue is huge is Microsoft can provide a platform, advertising model, and get partners. They did it with Windows 3.1, but that seems like a different company.
Prediction - May 13th buyout at $34.25, same amount of cash, but more stock and MSFT finds a way to reissue more shares to cover the spread.
Steve Ballmer is the George W Bush of business.
Incompetent, unaware, a record that speaks for itself.
Henry will you PLEASE write an article analyzing his performance as CEO -- specifically, stock price vs. revenue growth, why Ballmer is apparently determined to keep the stock price FLAT.
Why does he survive? Where is the outrage from MSFT investors who have no return across his entire tenure, despite quite respectable rise in revenues?
Thanks
like somehow splitting revenue on some new search initiatives with invested capital from microsoft and in exchange yahoo gives microsoft it's small business channel to help push live office.
Remarkably, I completely agree. It looks like it's gonna be $33-35. Hostile or not, makes very little difference. It's not as if Yahoo has an excellent management team that would be a major loss if they left.
I expect an announcement this weekend, probably Sunday night.
Now where do you put the odds of MSFT walking away?
Assuming a deal is announced this weekend around $34, where does MSFT open and close on Monday?
My guess, open $28.75, close $30.50
Depends on specifics...cash / shares portions
rm * -rf
(erase everything)
on their last day at work....
Assuming the headlines are true, do you still think msft has played it perfectly from an M&A perspective? Or do they just look a complete horse's ass at this point? I know where my vote is.
Personally, I would walked away Sunday or Monday morning. Yhoo stock would have tanked, shareholders would have been up in arms, etc, etc. They could have come back a month later and picked them up for <$30/share easily. Done deal...
Seriously, you're impressed? That Ballmer dude is obsessed and possessed. I just hope it costs him his job and his legacy one day but I'm sure he'll be laughing all the way to the bank while he f'ed all of his employees (and probably yhoo's too).
Thing is, when it comes to stuff online, Google rules, and the longer they try to work it out, the farther and farther away they get (especially for MS). It isn't just the revenue, but the share of mind.
They need Yahoo! for that share of mind and even beyond $44B it's still a bargain.
I'd personally have preferred they went after SAP if only for the much more profitable enterprise market. But the cachet and power of owning the consumer space has always been a key ingredient to the MS recipe.
When the smoke clears, No. 2 is always eventually going to be more and more distant. No. 3 is even worse, and that's where MS is at, and the only way they can survive for mindshare, let alone close the gap, is with Yahoo!
They can afford it.
Dude, share of mind??? If "share of mind" doesn't provide top and bottom line growth then it can kiss my ass.
I would like to see MicroHoo kicks Google's butt!
Google is becoming too big and too evil.
Dude! Exactly like you said-- "share of mind" (and a basket of related goodies from your business classes) DOES eventually provide top and bottom line growth, and ultimately, the sustainable kind like you've seen GOOG do to these guys so well, and as MS had done repeatedly before such as in leveraging OS dominance into office suites and all sorts of monopoly-happy returns.
All the more reason why they want this one bad for long term gratification.
So, can someone explain.
Smith, I totally disagree with you. Steve Ballmer knows what he's doing. I do not care about Bush anyway....
don't think so?
just watch.
Nothing has changed my view, if you go back to my earlier threads you'll see that I've all along maintained that MSFT will raise to $34 and that Yahoo's silence was a clear indication of ongoing talks.
I never believed that MSFT will simply walk, not raise or go hostile without showing its “second” offer.
Everything to this point made reasonable M&A gamesmanship sense except Yahoo's persistent leaks of its warped sense of self-worth!
I liquidated my bets yesterday with a small profit even though I had a strong conviction that that position would have been very profitable at anything north of $32. I did so because I felt that the one intangible here was Yahoo pushing its luck to the point where MSFT would have no choice but to go hostile. To me that would have been akin to betting on a coin toss and as a matter of principal, I don't bet on coin tosses (that famous scene from No Country For Old Men, notwithstanding).
Forget the media leaks and especially people that claim they have access to "sources familiar with the negotiations." Everything you need to figure this one out will be reflected in the price of both stocks next week.
Those “Sources Familiar with the Negotiations,” influence the price long before they talk to anyone that cares to write about this charade.
On what happens to MSFT stock it’s a hard call on how it behaves post announcement, I think it “falls” (the grumpy-nerds effect) initially then “rises” (yippee, we’re number two) then gradually drifts lower (the Holly $hit they really paid $50bb for that piece of junk! effect).
Outstanding coverage of the Microsoft | Yahoo situation. Thanks!
Would be wonderful to see an agreement this weekend - at least before the opening bell on Monday. Throughout this event, I have become more impressed with Jerry Yang and his ability to one-up Microsoft. The potential ad deal with Google was the ultimate trigger that pulled this into action. I was very doubtful when he pulled the $2B severance package deal and basically ignored the Microsoft bid. Meanwhile behind the scenes he has been cooking up ways to not only bolster the MS bid, but to enhance stockholder value by working with Google - something he knows all too well would make Steve B. curse and hyperventilate.
I would like to see agreement @ $35/share. Hoping we'll know more this weekend.
P.S. I hope you get your little whining bitch ass handed to you too...:)
Not sure if anyone knows, but outside the US it is nearly impossible to do 2 searches in a row in English. The first will work, the second will default to local language - making it nearly impossible to find American sites.
"Former MS employee speaking. MS has the habit of buying a company and making them adapt to the MS way of doing things."
Ummm, why would it be beneficial to have it any other way? Assuming 100% acquisitions, you can't buy a bunch of companies and allow them to continue to do it their way. You have to conform to a common culture, set of processes, etc. It simply doesn't scale. If your desire is to leave the acquired company completely in tact then why not just buy a controlling interest, not a 100% acquisition?
I'm also an ex-employee and would actually disagree with your statement to a degree. Msft takes a very hands-off approach initially (first 2 years). I've worked for at least 3 different hi-tech companies known for having a number of hi-profile acquisitions. I would say that Msft is by far the slowest and the worst at integrating the acquired company. I was disappointed in what I experienced.
http://www.sec.gov/Archives/edgar/data/789019/000119312508100726/d425.htm
Read carefully the part dealing with the so called 3 options. Note that first he talks about two big options and then changes it to three. Also he doesn't seem too enthusiastic about the unfriendly deal. The third option to walk away just seems like an afterthought.
It seems like MSFT will try very hard to do a friendly deal. So far all the leaks that we got in media seem to be coming from MSFT. The only one coming out of YHOO is about doing a deal with GOOG next week. I haven't seen anybody at YHOO confirming that the range they are looking at is $34-36 or $33-37. I agree with previous comment that Yang won't take anything below $40 in a friendly deal. Note that he has just talked about deal with GOOG. Once he actually announces something next week, he would have even more leverage.
I believe that one of those or both will happen - either MSFT goes hostile and/or YHOO announces GOOG deal, before there is an agreement on price between YHOO and MSFT. Note that the sense of urgency is on MSFT's side and its not apparent on YHOO's side. This means that the deal would either get done close to YHOO's asking price or not get done at all. Now that big YHOO shareholders know that MSFT is willing to pay ~$35, that is the bottom line even if it goes hostile. MSFT might as well pay a few bucks more than go hostile, based on Ballmer's comments.
I would like to hear other thoughts based on Ballmer's remarks at the town hall meeting.
Why is Yahoo quite???
YHOO announces advt partnership with GOOG.
YHOO's shareholders and insititutions will not dump stock if MSFT walks.
YHOO's shares barely move from current levels.
All the longs and shorts are screwed who were betting huge fortunes for either significant up or down movements.
Market makers celebrate! Champagne bottles open. Out walk Yang and Ballmer smiling into the party and they are serenaded and rewarded by the market makers.
Another day on wall street and general public (AKA suckers) skinned again by the elite.
Because, beyond their juggernaut on monetizing search, Google has not produced any single innovation worthy of note, yet!!
Their Google Earth and Map products, were bought, their successful video offering was bought as well and everything with a professional bend around advertising they bought too!! Froogle, Gmail, Google Apps.. yada yada yada are all laughable imitations of other's work.
So for all of you Google lovers out there (and I know this is like talking religion to you) please point me to one real "innovation" worthy of all the hype that you like to bestow on Google as the unattainable God you make it out to be. I think that they are ripe for the taking and a stronger Microsoft scares them (or should) than they ought to.
I actually believe that Microsoft will be better off and Google worse off, post takeover.
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