Brilliant...or Not: The Yahoo! Chronicles
The online search engine and advertising category has been slowly simmering beneath the surface, and it finally came to a boil with Microsoft initializing a hostile takeover of Yahoo! last week. Upon hearing all the rumbling in their backyard, Google looked out their back window, saw the two search engines fighting, and decided: "Awww heck, might as well try to break this up."Here's a timeline of events leading up to this week (and it just keeps getting juicier and juicier).
Yahoo! announces plan to lay off over 1,000 employees
Yahoo!'s first major move under Jerry Yang, who like other founding partners who have recently returned to steer their ships out of harm's way, was to lay off over 1,000 employees.
Apparently after Yang's "100 days" of strategic review and promise of no sacred cows, this is what was decided ... Unfortunately, it took much longer and wasn't exactly what anyone was looking for ... a precipitous drop in Yahoo!'s stock price ... which leads us into the next item ...
Microsoft offers $44.6 billion in a hostile takeover bid ...
In an attempt to create a formidable opponent to Google within the category, Microsoft, like a shark, could smell blood in the water and quickly pounced on unsuspecting and low-valued Yahoo! Microsoft's a behemoth and has the attitude of one; especially apparent when it comes to their M&A preferences, of which they've completed 50 deals in the past year.
Compare that to Google's strategy where their M&A activity focuses on fostering and integrating product development rather than trying to gain a competitive edge, and you might be onto something. Other than creating a formidable #2 to Google's #1, does a bigger and even less agile Microsoft sound like a good deal to potential advertisers?
Google says, "Oh. heck no, not without me!!!"
Upon hearing of the news, Google pulled their power card, and quickly moved to make sure their voice was heard by mobilizing their lobbyists in D.C.
Regardless of the implications, good or bad, a Microsoft-Yahoo! merger might have on Google's business, they're still big dogs and everything search related is their yard. Merger or not, Google will still be #1 and a leader in innovation ... and don't go thinking that there won't be a fallout from an MS-Y! merger.
Yahoo! says, "No," to Microsoft, claiming they're more valuable than this ...
Yahoo! in a statement released Monday said, "Thanks, but no thanks," to Microsoft's offer, claiming that the value of the offer does not match what they believe they are worth. Right around the same time, it was leaked that they are searching for other partners in a deal, namely one with AOL. Hmmmm....
Normally in these situations the stock price of a company who's the target of a hostile takeover doesn't go up when they make a stand. So is Yahoo!, whose stock went up with their announcement and speculation of an AOL deal, just calling Microsoft's bluff to get more money out of Microsoft because they've made it clear they're in it to win it? Probably. Yahoo!'s going all in.
AOL Time Warner says, "Why are you even bringing me into this?"
Yahoo! is looking for new partners to help their rebuffing of Microsoft, and who better than Time Warner, whom they've already had previous talks with? Except that Time Warner's interest seems lukewarm at best right now, especially since they're probably feeling a bit used ...
While an AOL-Yahoo! deal probably makes more sense in terms of business synergies, we all know common sense carries no weight here and neither does synergies ... Microsoft is trying to right their wrongs and dig deeper into the pipeline for software, and if successful, the deal has the most potential for profit, but also for loss.
In an unlikely turn of events ... Rupert Murdoch, the white knight!
Not to be outdone by Warren Buffett offering to bail out municipal bonds, Rupert Murdoch put on his shiny white armor and offered an alternative partnership to save Yahoo! from the wrath of the nasty wizard, Microsoft! The partnership would combine News Corp.'s Fox Interactive Media (i.e., MySpace) with Yahoo!'s services, bumping the company's value way up, in exchange for a healthy 20 percent stake in Yahoo! for News Corp.
If a deal was struck, together they'd have a combined page view count of 150 million per day, second only to Google. Yet, it remains unclear how much room for autonomy Yahoo! would have under such a deal with News Corp., and whether or not this would just be saving the company for now, but stunting its strategic growth.
(... and meanwhile somewhere in California sitting upon a throne of flash memory in a tower made of titanium and touch surfaces, Steve Jobs looks on from his perch laughing like the emperor in Star Wars ... muahahahahahahaaha!!!!)
Yahoo!'s first major move under Jerry Yang, who like other founding partners who have recently returned to steer their ships out of harm's way, was to lay off over 1,000 employees.
Apparently after Yang's "100 days" of strategic review and promise of no sacred cows, this is what was decided ... Unfortunately, it took much longer and wasn't exactly what anyone was looking for ... a precipitous drop in Yahoo!'s stock price ... which leads us into the next item ...
Microsoft offers $44.6 billion in a hostile takeover bid ...
In an attempt to create a formidable opponent to Google within the category, Microsoft, like a shark, could smell blood in the water and quickly pounced on unsuspecting and low-valued Yahoo! Microsoft's a behemoth and has the attitude of one; especially apparent when it comes to their M&A preferences, of which they've completed 50 deals in the past year.
Compare that to Google's strategy where their M&A activity focuses on fostering and integrating product development rather than trying to gain a competitive edge, and you might be onto something. Other than creating a formidable #2 to Google's #1, does a bigger and even less agile Microsoft sound like a good deal to potential advertisers?
Google says, "Oh. heck no, not without me!!!"
Upon hearing of the news, Google pulled their power card, and quickly moved to make sure their voice was heard by mobilizing their lobbyists in D.C.
Regardless of the implications, good or bad, a Microsoft-Yahoo! merger might have on Google's business, they're still big dogs and everything search related is their yard. Merger or not, Google will still be #1 and a leader in innovation ... and don't go thinking that there won't be a fallout from an MS-Y! merger.
Yahoo! says, "No," to Microsoft, claiming they're more valuable than this ...
Yahoo! in a statement released Monday said, "Thanks, but no thanks," to Microsoft's offer, claiming that the value of the offer does not match what they believe they are worth. Right around the same time, it was leaked that they are searching for other partners in a deal, namely one with AOL. Hmmmm....
Normally in these situations the stock price of a company who's the target of a hostile takeover doesn't go up when they make a stand. So is Yahoo!, whose stock went up with their announcement and speculation of an AOL deal, just calling Microsoft's bluff to get more money out of Microsoft because they've made it clear they're in it to win it? Probably. Yahoo!'s going all in.
AOL Time Warner says, "Why are you even bringing me into this?"
Yahoo! is looking for new partners to help their rebuffing of Microsoft, and who better than Time Warner, whom they've already had previous talks with? Except that Time Warner's interest seems lukewarm at best right now, especially since they're probably feeling a bit used ...
While an AOL-Yahoo! deal probably makes more sense in terms of business synergies, we all know common sense carries no weight here and neither does synergies ... Microsoft is trying to right their wrongs and dig deeper into the pipeline for software, and if successful, the deal has the most potential for profit, but also for loss.
In an unlikely turn of events ... Rupert Murdoch, the white knight!
Not to be outdone by Warren Buffett offering to bail out municipal bonds, Rupert Murdoch put on his shiny white armor and offered an alternative partnership to save Yahoo! from the wrath of the nasty wizard, Microsoft! The partnership would combine News Corp.'s Fox Interactive Media (i.e., MySpace) with Yahoo!'s services, bumping the company's value way up, in exchange for a healthy 20 percent stake in Yahoo! for News Corp.
If a deal was struck, together they'd have a combined page view count of 150 million per day, second only to Google. Yet, it remains unclear how much room for autonomy Yahoo! would have under such a deal with News Corp., and whether or not this would just be saving the company for now, but stunting its strategic growth.
(... and meanwhile somewhere in California sitting upon a throne of flash memory in a tower made of titanium and touch surfaces, Steve Jobs looks on from his perch laughing like the emperor in Star Wars ... muahahahahahahaaha!!!!)
Leave a comment