Microsoft bids $44.6 billion for Yahoo • Hacker News Board

Re: Microsoft bids $44.6 billion for Yahoo

#71

Post by anewaccountname » Sat, Feb 02, 2008, 2:49 AM UTC

aston wrote: post #41

DaniFong wrote: post #6

"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." Uh, really?

If the biggest advertising entity on the web (Google) can buy one of the other biggest advertising entities (Doubleclick), I'm pretty sure one of the also-rans can buy another also-ran.

The difference is there is practically no lock-in in advertising systems--Microsoft has demonstrated repeatedly that it will use it's OS monopoly to unfairly leverage things online. If you think they have failed miserably, consider that it was only because of the anti-trust rulings that beige box makers got the right to change the start page.

Also, much of Google's "monopoly" comes from a source that is heavily protected by law: the pagerank patent. Patents are government granted monopolies with limited time; as such, there is little or no legal recourse as any mildly abusive behaviour is expected, tolerated, and what the system was designed to provide.

Re: Microsoft bids $44.6 billion for Yahoo

#72

Post by anewaccountname » Sat, Feb 02, 2008, 2:56 AM UTC

tlrobinson wrote: post #4

DXL wrote: post #2

The market is reacting very positively: Yahoo is up almost 60% in pre-market trading, at a market cap of $40B (up from $26B at yesterday's close). Microsoft is down 4% however.

The stock market continues to baffle me. Microsoft is offering $31 per share of Yahoo. YHOO is now trading at nearly $31, up from $19 at the close yesterday. Why would anyone pay $31 for a share of Yahoo right now? There are two possible outcomes: 1) the deal goes through, and you get your $31 back either in Microsoft stock or cash. No net gain. 2) The deal doesn't go through and YHOO drops back to around $19, losing…

When you hear "Microsoft makes a surprise, unsolicited offer to buy Yahoo!", that means there hasn't been any negotiation yet, and that this is the minimum offer (they can accept it right now; the only downside is the risk that they don't pass the reg approval process). Now, you gave two possible outcomes, but as others have mentioned there is a third: a counter offer for more money.

(yet another outcome is that Yahoo twiddles it's thumbs and Microsoft rescinds the offer, but in that case you can look forward to getting in on a nice shareholder class-action lawsuit against the board)

Re: Microsoft bids $44.6 billion for Yahoo

#73

Post by anewaccountname » Sat, Feb 02, 2008, 3:09 AM UTC

dean wrote: post #49

tlrobinson wrote: post #4

Earlier quoted context omitted.

The stock market continues to baffle me. Microsoft is offering $31 per share of Yahoo. YHOO is now trading at nearly $31, up from $19 at the close yesterday. Why would anyone pay $31 for a share of Yahoo right now? There are two possible outcomes: 1) the deal goes through, and you get your $31 back either in Microsoft stock or cash. No net gain. 2) The deal doesn't go through and YHOO drops back to around $19, losing…

This always happens with buyout offers, the buyee's stock price shoots up close to the amount of the buyout offer, but never reaches it. It generally stops a couple dollars short of the buyout price. At this moment, Yahoo is trading at $28.25, still low enough to make a sure-thing couple of bucks per share. It's a gamble though. If the deal falls through, or gets blocked by the government, the buyee's stock price dro…

>This always happens with buyout offers

Everyone thinks they know so much more than the market. In this thread so far I have seen you claim the stock always goes (slightly) lower than the offer, and another guy express puzzlement as to why YHOO even managed to exceed the offer at times today. I hope neither of you were trading BEA Oracle offered ~6 billion, BEA rejected it, and 3 months later Oracle offered ~8billion and BEA accepted. One other thing to keep in mind (this is more picking on the other guy than on you) is that when these deals are announced they are often largely made up of stock (Microsoft is so buried in cash that might not be the case here). If Yahoo! accepted the offer right now, it still might end up with a different future value. Luckily it is not to hard to factor that out by purchasing various positions or leveraged vehicles in or relating to Microsoft/whoever-the-aquirer-may-be.

Re: Microsoft bids $44.6 billion for Yahoo

#74

Post by bayareaguy » Sat, Feb 02, 2008, 3:40 AM UTC

nradov wrote: post #69

bayareaguy wrote: post #42

Earlier quoted context omitted.

Not if they actually care about ROI. They got no benefit other than PR when they moved Hotmail to windows.

Actually they got a huge benefit. They had internal users doing a high-volume stress test on Windows and associated middleware, so a lot of bugs got found and fixed. The products now are noticeably more reliable.

I was only thinking about whether or not their actions improved Hotmail.

To learn how to make a Windows web service work, they buy a FreeBSD based one and then spend 5 years replacing FreeBSD with Windows.

What an expensive way to do QA.

Re: Microsoft bids $44.6 billion for Yahoo

#75

Post by cawel » Sat, Feb 02, 2008, 3:45 AM UTC

The Economist's take a it: http://www.economist.com/daily/news/displaystory.cfm?story_i...

"Microsoft is desperate to grab a bigger share of the online-advertising market because many of its software products are being challenged by free, advertising-supported services offered by Google. The company is also worried that Google's dominance in search and advertising allows it to dictate terms to advertisers, and gives it an unfair advantage over its smaller rivals."

Re: Microsoft bids $44.6 billion for Yahoo

#76

Post by michaelneale » Sat, Feb 02, 2008, 3:55 AM UTC

hugh wrote: post #58

This could be good news for startups. Suggested business plan: 1. Find something Yahoo currently does well (e.g. flickr) 2. Make a clone of it. 3. Wait for Microsoft to ruin the original.

You jest, but seriously that makes sense.

Heck you could SAY that it "replaces" Microsoft Flickr, and that would be perfectly valid !

I think it is indeed a happy day for startups.

Re: Microsoft bids $44.6 billion for Yahoo

#77

Post by michaelneale » Sat, Feb 02, 2008, 4:03 AM UTC

drusenko wrote: post #5

One thing quite a few people are failing to notice when describing the "huge" premium of 62%: look at Yahoo's historical stock price charts for the last few months or so. Yahoo's taken a real big hit, likely for several reasons that are beyond its control, and it might very well be undervalued. This could be a great chance for MS to give an offer price that Yahoo was trading at a month ago but now seems generous.

62% seems very generous, and with the wobbly market, I guess this is calculated on MS part to make sure it happens (no indecision from anyone).

Re: Microsoft bids $44.6 billion for Yahoo

#78

Post by neilc » Sat, Feb 02, 2008, 4:10 AM UTC

bayareaguy wrote: post #42

agotterer wrote: post #36

Earlier quoted context omitted.

Think they will move everything to MS servers and re-write in .net?! heh

Not if they actually care about ROI. They got no benefit other than PR when they moved Hotmail to windows.

Sure they did. Microsoft's internal infrastructure and corporate culture is very Windows-centric (obviously). Maintaining a totally alien FreeBSD-based infrastructure for Hotmail would be very expensive in the long run, and make integration with the rest of MSN prohibitively difficult. Which is to say, it would directly interfere with one of the main goals of the acquisition in the first place.

They would have needed to vastly overhaul and rebuild the infrastructure multiple times to scale the site and add new features, anyway. The question is just whether to do those overhauls as part of a transition to Windows or not -- and I think the answer is that moving to Windows obviously makes sense in the long run, even disregarding the non-zero PR benefits.

Re: Microsoft bids $44.6 billion for Yahoo

#79

Post by dean » Sat, Feb 02, 2008, 5:27 AM UTC

anewaccountname wrote: post #73

dean wrote: post #49

Earlier quoted context omitted.

This always happens with buyout offers, the buyee's stock price shoots up close to the amount of the buyout offer, but never reaches it. It generally stops a couple dollars short of the buyout price. At this moment, Yahoo is trading at $28.25, still low enough to make a sure-thing couple of bucks per share. It's a gamble though. If the deal falls through, or gets blocked by the government, the buyee's stock price dro…

>This always happens with buyout offers Everyone thinks they know so much more than the market. In this thread so far I have seen you claim the stock always goes (slightly) lower than the offer, and another guy express puzzlement as to why YHOO even managed to exceed the offer at times today. I hope neither of you were trading BEA Oracle offered ~6 billion, BEA rejected it, and 3 months later Oracle offered ~8billion…

I was not trading BEA when Oracle made the bid to buy them out. Why? What happened to BEA's stock price during these two offers? Did it not move at all? Did it go beyond the offer price? Somewhere in between?

Re: Microsoft bids $44.6 billion for Yahoo

#80

Post by Tichy » Sat, Feb 02, 2008, 10:32 AM UTC

I for one think it is a good idea. Maybe with Microsoft's start page, Yahoo search could get more traffic and the recognition it deserves. Microsoft Online Services could be scraped completely, nobody would miss them.

Server tech would be a concern, but who knows - perhaps rather than switching everything to Windows servers, Microsoft might take the chance to become acquainted with Linux and BSD. It would make sense if MS would in the future simply release a theme for Gnome, rather than waste resources on another OS that nobody wants.