Uh Oh--Google May Not Want to Do Search Deal With Yahoo, After All
And now that the original raison d'etre for the Google partnership has disappeared, Yahoo shareholders are banking on another one, which is the ONE BILLION DOLLARS in incremental cash flow (not) that investors expect to immediately receive from a formal Yahoo-Google search deal.
Not so fast, says the WSJ. Now that Google has thumbed its nose at Redmond yet again by breaking up the Yahoo deal, Google is apparently having second thoughts:
Google executives are now divided over whether to pursue a search-advertising deal with Yahoo, according to a person familiar with the matter.
ONE BILLION DOLLARS. Poof.
Maybe this leak is just an elaborate scheme by Messrs Yang and Schmidt to lure Steve Ballmer back to the table? (Yahoo and Google having been initially in cahoots to drive him away). Unlikely.
More likely, now that its see-red hatred of Microsoft has dissipated in the wake of another victory, Google is now remembering that having 85% market share in a $20 billion global market probably isn't a winning strategy for keeping regulators happy. Far better to keep one foot on Yahoo's throat and the other on the defibrillator paddles, so you can always say, "See, we have a real live competitor here! It moved an hour ago. We swear!"
See Also: $1 Billion of Cash Flow From Yahoo-Google Search Deal? Keep Dreaming
THE boy wonder, THE panchen lama of silicon valley,THE man who invented the Panama, THE man who rejected 45B offer for this shack, THE man who thinks he is better than Ballmer and THE man who thinks his company is better than Microsoft is wrong!!!!!!!
dead wrong!!!!
One thing I give it up is so far google management has been humble for their 500$/shr stock price.
Being at $19, so much arrogance,If Yahoo was at $500/shr their arrogance might be astronomical.
pompous Yahoo was rightly dealt by the great genius called Steve Ballmer.
Bostock you better pick up the phone and call Steve and hope and pray he takes your call.
Note to Bostock you have been played like a fiddle!
What a bunch of idiots
By the way, what was Filo doing at the meeting on Saturday? He is not a board member as far as I know. Why not take the guy (Gordie Crawford)who controls 16% of yahoo?
Moronic play by groos amateurs!
So imagine what your stock would be doing going forward if you got gobbled up by msft. You people got it made and you don't even realize it. That's just sad...
Poor Jerry, it must be hard for you these days. First you were seen as the brilliant wunderkind that seemed to be able to pull the extra billions out of Steve Ballmer, then suddenly being dropped like a hot potatoe, and now rejected by Google as well? How sad, and how deserved!
ROFL!
Messa said: May. 06, 6:56 PM
I think Yahoo got played, but not by Microsoft....well, not Microsoft alone......I think Google screwed them too.
I could be wrong....I often am.....but, it seems to me that Microsoft isn't the only one that's lost it's enthusiasm for a deal with Yahoo.....Yahoo may have been using Google to get Ballmer to make a bigger offer, but Google could have been using Yahoo too by offering them just enough rope to hang themselves with.
Now that a combined Microsoft/Yahoo doesn't look likely, it seems Google got what they wanted all along.....to make sure that deal didn't go through......Combined, Microsoft and Yahoo wouldn't have been a huge threat to Google, but like a little brother, could have hung around enough to be annoying.....Microsoft and Yahoo on their own isn't even an annoyance.....They aren't even in the game anymore.....Now that Google has what it wants, I think you'll see it doesn't want to expand on the deal they already have with Yahoo ....Oh, they'll go through with what they've talked about, but if Yahoo thinks they are going hand in hand into the sunset together to vanquish the evil Microsoft, they can have two more guesses......and in the end, Yahoo is going to be sitting there pretty much where they are now.
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Speculators. Much of the Street still believes a deal with MS (or someone) will happen, and they want in on a potential payout by buying stock in the mid-20's, and hoping for a buyout in the mid-30's. With most of the major shareholders talking about ousting the whole Board next month, there's a good chance that a deal with someone WILL be done too.
Simple.
Any trader worth his/her salt would try to make a play like that. I just threw some gambling $ at it myself. LOL
It's NOT a vote of confidence, if that's what you're thinking. It's a vote that everyone believes it's a sinking ship that will be acquired.
I think during the negotiations with Google (pre-Walksterville), Yahoo was thinking "short-term and high rate of sharing for Yahoo," and Google was thinking "long-term and low rates for Yahoo."
It's because Yahoo even said a sharing deal with Google wouldn't be done on terms that prevented an acquisition by MSFT. But that was a red flag to Ballmer and one of the main reasons I'm sure he got frosted and walked.
Even if Yahoo had been turning the corner on squaring up a deal with Google, I doubt now that Yang would entertain any deal with Google that wasn't superior for Yahoo in sharing. He'd have told Google "Look, we can deliver 500 mil of eyeballs, so we deserve a premium deal." Yahoo's eyeballs would be far more valuable to Google than Ask.com's for example. Yang would want a better deal and might open a can of worms to give them one.
Too, Google still has to be concerned with Yahoo as a search competitor, and Decker's recent open source search R&D overture "Search Monkey" could over time have model-altering consequences for Google. I still think that one of these days the bloom may be off the rose for Google, and when we realize it, it wouldn't have been obvious before as to why it happened.
Search is not General Grant's Tomb. It's not a marble memorial etched forever in all time with writ from the GOO-glee-ites. Somehow I just doubt that in the year 5555, if man is still alive, that they'll dig up an addendum to the pyramids with Googles private Boeing corp jet entombed there... and the faces of Ramses knocked off for Prin and Bage to replace them.
No, Yahoo has every right to be optimistic. They would've benefited I think from a merger with MSFT, but I fully agree the baggage would've been hard to get to the bus.
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Oli,
Probably for the same reason the Walksters aren't as happy as they'd hoped to be by now.
Ballmer build so powerful a case for acquiring Yahoo, that they can't now quench, even with multiple and expressly made denials of MSFT Big Wheels that those talks won't resume.
Read me here (my last entry) for more:
http://www.alleyinsider.com/2008/5/chances_of_microsoft_yahoo_deal_smaller_than_you_think
It's just that the market is likely now to see that something like 23-25ish might be the worst case worry for the longs for maybe at least the next couple of quarters while Yang will have some slack given to him to see if he can deliver on their 3-year plan.
Too, when CRM and Legg, who knock in at something like 25-30% or more of the shares, and would likely be profitable on all of them at anything north of maybe 28, become as vocal as they've been in Walksterville, it just persists to hold out the notion that they have enough influence to get the deal done by intervention with MSFT.
Maybe, but I think they'd have to suggest so good a deal that they'd just get Yang and the board bristle-necked again and MSFT doesn't any longer want the fight. Too, Ballmer has fire-bombed both their own employees and shareholders during the last 3 months, and God knows, the innocent need a little breathing room.
One would think they could understand that another formal communication from Ballmer, after Yang's comments in Walksterville (because that has fueled much of the hope for a deal), might just free the shareholders from Walster Pergatory. Right now the Walksters are Zombies, wandering the earth as the living dead, looking for their eternal souls.
Their employees also don't know whether to shit or shine their shoes, especially the MSN ones no doubt.
It took $$,$$$,$$$,$$$ to accumulate the volume over the last 4 days - I am sure your $ went a long way!
Net, net... it's just been a disaster for MSFT and the shareholders took the bullets.
It was poorly conceived, poorly planned and executed with a hand-grenade terrorist strategy, and all he managed to do was kill his kin.
MSFT walking from the deal hasn't affected the YHOO stock much, so there is no urgency to announce the deal with GOOG.
If the big YHOO investors or MSFT try to nominate new board members for YHOO, then there will be an urgency for GOOG and YHOO to announce something. If that doesn't happen my May 15th, then they would have even more time to consider this deal and walk through the regulatory hoops. So far MSFT hasn't expressed any interest in a hostile deal and the big investors in YHOO are still doing fine in terms of their YHOO stock value, so they are less likely to do something hostile.
Market is giving more credit to Yang instead of Ballmer the way this deal got negotiated. If Yang had accepted the so called $33/share deal, which wasn't well defined, YHOO would have at most traded at $29, due to all the uncertainties and depending on the stock/cash component and valuation collar in the deal. MSFT would have traded down even more, reducing the deal value.
And yhoo people think they got it bad? Give me a break. They only violin I'm getting out is for myself. Well, and Gordon too...
Never risk more than you can afford to lose on a gamble. Many, many people learned that the hard way in 2001, and again in 2007.
But ya, I won't mind getting a little slice of a possible acquisition...and it's better spent on that, than beer & pizza. :-D
Hey dude, Icahn just made my day! My little gamble has already paid off nicely, and I'll probably get another $5 per share before it's over...
w00t!!!