Big day in business

[pdisme]

http://money.cnn.com/2008/02/01/technology/microsoft_yahoo/index.htm?cnn=yes

Microsoft bids $45 billion for Yahoo
Software giant makes cash and stock offer of $31 a share, a 62% premium from Yahoo's closing price on Thursday.

Microsoft Corp. made an unsolicited $44.6 billion cash and stock bid for Yahoo on Friday, a deal that could shake up the competitive and lucrative market for Internet search.

The deal would pay Yahoo shareholders $31 a share, which represents a 62% premium from where Yahoo stock closed on Thursday.

....

Wish I owned some Yahoo stock. :) I think the real reason they want Yahoo is to stop losing email market share to Google.


And, way to go Exxon, showing me where my extra 30 cents per gallon for diesel is going:

http://money.cnn.com/2008/02/01/news/companies/exxon_earnings/index.htm?cnn=yes

Oil giant makes corporate history by booking $11.7 billion in quarterly profit; earns $1,300 a second in 2007.

Exxon Mobil made history on Friday by reporting the highest quarterly and annual profits ever for a U.S. company, boosted in large part by soaring crude prices.

Exxon, the world's largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. That's up from $10.25 billion, or $1.76 per share, in the year-ago period.

[Shawn]

Its all about market share. They're been looking for a way to pounce on google for years now. This is the first step. I hope they buy it! ;)

Exxon - it'd be nice to earn a half million an hour, but it's pretty messed up they are doing better than ever and america is dying.:tdown:

[eshaun]

right about now im lovin the move I made at yahoo in the low 20s...i had to read the press release twice this morning :grinning-smiley-003

[pdisme]

right about now im lovin the move I made at yahoo in the low 20s...i had to read the press release twice this morning :grinning-smiley-003

If it keeps going, could be time to pick out a Lambo by the end of the day. :)

[eshaun]

If it keeps going, could be time to pick out a Lambo by the end of the day. :)

Its funny that I was having a convo about feeling a little beat up on yahoo last night lol. I should have diversified a little less or i'd be heading over to our friends office right now to pick up my black SL :wave:

[AgentTripleX]

right about now im lovin the move I made at yahoo in the low 20s...i had to read the press release twice this morning :grinning-smiley-003

Me too. I was thinking it's a worthless stock. I'm probably one of the few people that pays for yahoo mail. I find it easier to use than gmail. Gmail mixes messages together and then I can't separate them.

Good for Yahoo. I hope it works out because I just more stock, lol. They're still lower than the were 3 months ago.

[eshaun]

Agreed, at first I put in a limit order to take the gains and move on to other things...but I think its worth seeing through after thinking through some of the points outlined in the letter.


Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer

Dear Members of the Board:

I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.
Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use — EBITDA, free cash flow, operating cash flow, net income, or analyst target prices — this proposal represents a compelling value realization event for your shareholders.
We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.
Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.
In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.
While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:
• Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

• Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

• Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

• Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.
We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.
We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.
Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.
In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.

Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.
We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.
Sincerely yours,
/s/ Steven A. Ballmer
Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation
Microsoft will host an analyst/investor conference call at 8:30 a.m. Eastern Time/5:30 a.m. Pacific Time to discuss today’s announcement. If you want to participate, you may do so by dialing (866) 610-1072 or (706) 634-9230 (toll/international); the conference ID number is 33470390. Please dial in at least 20 minutes in advance of the call. Accompanying slides and the conference call Webcast will be available at http://www.microsoft.com/presspass. Playback of the conference call and the webcast will be available for replay through the close of business on Feb. 5, 2008. The replay can be accessed by dialing (800) 642-1687 or (706) 645-9291 (toll/international); the conference ID number is 3347039

http://sec.gov/Archives/edgar/data/789019/000095012308001038/y47867exv99w1.htm

[j0nnywalker]

hahhah, CHA CHING!!! yahoo was my major position for my clients and i. Just one step closer to my lamborghini and mansion :)

[Varion]

Personally I do not like Google or Gmail, or anything related to their "services". Google's only service is selling ads via their search using a complex scheme of word relevance and algorithms which predict search aggregated website placement.

It will be a great day once the Microsoft / Yahoo merger is complete. I hear from a close source that the government will give the all clear in terms of antitrust issues. Google is fiercly hoping that they do not, and they are pushing to either outbid the Yahoo buyout, or to destabilize. Yahoo and Microsoft combined will definately be a refreshing breath of fresh air for users in terms of content offerings and overall user experience in search the microsoft live platforms.

[pdisme]

Not sure if I'd agree with fiercely, I heard Google is content to let it happen because it will greatly reduce the chance of government regulation of their activities in Europe where they're close to getting themselves in trouble with more than a few governments because of their dominance. Personally I don't trust them at all; would never give them copies of my email and let them search my hard drive.

[Shawn]

As for the merger, I cannot see the the govt just standing by without atleast investigating it. As for MST, I really hope they give google some competition and take some of their market share away. To me, Microsoft is old money and google is the average joe who won the lottery and is now trying to run for president.:lol2:


Personally I don't trust them at all; would never give them copies of my email and let them search my hard drive.

:stupid: :stupid:

[Matt]

Yahoo to pwn microsoft and reject bid?

http://www.engadget.com/2008/02/09/yahoo-not-so-hot-for-microsofts-initial-bid-plans-to-reject/

[j0nnywalker]

word on the street is they're gona raise the bid or continue as a hostile buyout.

[Shawn]

they better not go with googles advertising deal. That would suck for advertisers and hopefully the govt wouldn't allow it.

[AgentTripleX]

Yahoo to pwn microsoft and reject bid?

http://www.engadget.com/2008/02/09/yahoo-not-so-hot-for-microsofts-initial-bid-plans-to-reject/

They should milk it if they can.

[Matt]

They should milk it if they can.

I was thinking something along those lines.

what does this mean for stocks? buy or sell?

[pdisme]

There goes eshaun's Gallardo. :)

[artherd]

Expect microsoft to fsck up 10+ years of decent offerings by yahoo.

The banking and computing industries are seeing way too much consolidation of late.

[eshaun]

There goes eshaun's Gallardo. :)

Guess i'll just have to postpone my european delivery ;)

boards response...
http://sec.gov/Archives/edgar/data/1...2131-index.htm

Did anyone read the letter to their shareholders? Sounds like a broken record to me, lets see if they can execute on all that opportunity.

http://sec.gov/Archives/edgar/data/1...927exv99w1.htm

..."
we have been very deliberate about the steps we are taking to position yahoo!. we are putting in place the pieces we need to accelerate growth by becoming a leading starting point for users and the must buy for advertisers. the global online advertising market is projected to grow from $45 billion in 2007 to $75 billion in 2010, and our more focused strategies position us to capture an even larger share of this market. we are moving to take advantage of this unique window of time in the growth of the online advertising market to build market share and to create value for stockholders.
several key assets form a solid foundation as we execute this strategy."