Giving Yahoo! 3 weeks to make a decision seems quite generous. If I were the CEO, I’d say “You’ve got 48 hours or we’ll make direct contact with your shareholders”.
Arguably in the next 3 weeks, the employees of Yahoo! now have a decision if they’d like to stay in their current job or move on to other promising opportunities. Remember Gates said that in buying Yahoo! you also get very talented staff.
Furthermore, I think if Microsoft was to pull out of this offer, we would only see Yahoo! stock plummet – giving opportunity for say Google or other interesting buyers to propose a lower buyout price.
Below is the letter that Steve sent over to Yahoo!
April 5, 2008
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Dear Members of the Board:
It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.
While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we’ve seen no indication that you have authorized Yahoo! management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.
During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.
By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.
Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.
It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.
Sincerely,
Steven A. Ballmer
Chief Executive Office
Microsoft Corp.
Source: http://www.microsoft.com/presspass/press/2008/apr08/04-05LetterPR.mspx
I read this morning, an article talking about the Big Four (Fairfax Media, News Limited, Ninemsn and Yahoo!).
Harold Mitchell wrote about the influence that the Big Four has played to the Australia public and the growth of advertising for all portal owners.
This year alone, Australia expects to make just under 40 per cent growth in online Advertising. Now, there’s a 5th wheel trying to join the Big Four – AOL, part of Time Warner!
Failing to make its impressions in the previous two launches, AOL needs to come up with some way to lure the audience from the Big Four. Competition here is tough no doubt, and I like how Mitchell put it, in saying that Vanessa Brown, boss of AOL can only wing this if she “has arranged for the US 7th Fleet to sit in Sydney Harbour with all guns aimed at the net guys”
Out here at Fairfax – we’ve got the Dirty Harry, Clint Eastwood look a like – Jack Matthews. Jack is one of those CEOs that knows just how to get it done. His team is well established and well structured under his cowboy hat that they deliver exactly what Fairfax needed. Pippa Leary, from the News and Information of Fairfax Digital, supports Jack’s model and simply knows what it takes to meet the numbers.
News Limited has Ed Smith and Richard Freudenstein, both supporting the boss of News – John Hartigan. Internally there, I’m sure they are more being looked up to, but these are some smart players to be mentioned.
Yahoo!7 has its innovations back on track with Rohan Lund, coupled by the support of David Leckie. Then you have their paid TV salesman, James Warburton – who is apparently one of the countries highest paid salesmen, but it’s through him that you see Yahoo! and 7 moulding together.
Ninemsn has its quiet people like Tony Faure and Jason Scott, but with the backing of PBL and MSN, I’m not sure if there is much that you can do wrong.
As most you have read there are talks about Microsoft looking to buy out Yahoo! for a sum of approx $50 billion – will this affect the Big Four? Does it then become the Big Three? Where does Google fit into all of this?
2008 is an exciting year for all of the above mentioned companies. Only time will tell what each company has planned and rolled out, in order to get the bigger piece of the pie.
Source: http://www.theaustralian.news.com.au/story/0,25197,23171236-17061,00.html
On the 22nd January 2008, my best friend, Chris Elson, got one of his birthday presents a day late. The present cannot be simply bought from a gift shop and nor can it be exchanged for an iPod. Instead it’s a newspaper article worthy of exposure and influence in the Mobile industry and future growth of consumer mobile.
The Australian IT has written about Chris in the Ambition section, where people appointed in market influencing businesses are talked about. In this case, the article described his recent position at Dialogue Communications where Chris was appointed as the New-Media Sales Head in the Sydney office.
Chris and I met in 2006, where he was a client at the company I used to work for (Wiliam). A few months after our initial meet, he was offered a role at Wiliam and at half past 6 on his first day you would have seen the two of us and the MD crack open a bottle of wine on the boardroom table. Next thing I knew, I was hypnotised by the magic of cocktails through Chris’ recommendation and suave taste for the combination of fruit and alcohol. Several bars near our office in the city were experimented with, and only a select few made a lasting impression.
Chris and I played fairly strong roles at Wiliam where his strong skill in sales and my technical jargon helped bringing in business and growing existing clients. Together we worked well, and of course generated revenue – but more importantly introduced most if not all of the people at Wiliam experience the ruthless force of the Miami Fist (a cocktail co-founded by Chris Elson and Miles Sowden). “Lead by example” – as we sometimes say.
In 2007, Chris and I departed Wiliam but the friendship never wore off. Today we cross paths when walking to work every morning. Though on most Tuesday evenings you can catch us at our mid way point from work for a cocktail evening at Pier26 – where I’m sure Chris won’t hesitate to sign your copy of the Austrlaian IT!
Read the Australian IT article by clicking here