Is the Yahoo founder leaving?

There’s no denying that Jerry Yang is a man who makes things happen. They Yahoo co-founder built a multi-billion dollar internet empire from the ground up. The company has been attracting at least 1.575 billion users by 2008. Having built an iconic company, what next?

At a news conference to announce the ending of acquistion talks with Microsoft Yang stated; “clearly it is time to move on,”

Where to now? Yang will be in demand. Big demand. There are no doubt many companies ready to pay a hefty premium to bring him onboard. The hiring of Jerry Yang would no doubt boost the profile of any company which will almost certainly equate to a higher profile and increased revenue.

But does he want it? Yang really doesn’t have to work again. He’s estimated to be worth around $800 million.

Personally, I’d like to see him start again. There’s always room at the table.

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A poke in the eye for Microsoft.

If you’ve been following events at Yahoo you’ll know that the no.2 search engine has been testing google ads served up with Yahoo search results. Well, the testing finished sometime ago. Yahoo was also involved in a an acquistion dance with Microsoft. As you can see, this fell apart.

Now come the latest announcement: Yahoo will have the option of serving Google ads. The contextual ads will only appear alongside search results for Yahoo’s American and Canadian sites. I don’t think it will take long for this to extend to other countries.

Interestingly, this agreement is not exclusive meaning Yahoo can enter into similar arrangements with other contextual ad services.

This news is great news for Google. Some readers might see this as a slap in the face for Yahoo. Not so. Yahoo generates the majority of revenue from direct advertising. By farming off ad results this gives them more room to concentrate on their core business.

Could we see a future tie-up between Google and Yahoo? It’s and interesting prospect.

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It’s all very confusing

Yesterday, Microsoft gave a statement suggesting that a deal could still be on the table. What Redmond called an “alternative transaction” means that Microsoft could buy up parts of Yahoo rather than a full acquisition. Potentially, this could releive Microsoft of the issue surrounding redundancy payments for a large swathe of Yahoo employees.

On the other hand, Yahoo are saying something totally different - all talks have ended. The pioneering internet company has said there will be no further talks around full OR partial acquisition.

Yahoo gave the following statement:

“With respect to an acquisition of Yahoo’s search business alone, that Microsoft had proposed, Yahoo’s board of directors has determined, after careful evaluation, that such a transaction would not be consistent with the company’s view of the converging search and display marketplaces,”

There are bound to be more twists to this tale.

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Another day, another billion dollars (or so)

Have you heard of Carl Icahn? If not, he’s a billionaire investing who made his fortune buying and selling companies. He currently owns about 50 million shares in Yahoo and is trying to force the Yahoo board to sell to Microsoft. Get the picture now?

Icahn recently sent a letter to Yahoo chairman Roy Bostock in which Icahn stated he will replace Jerry Yang as CEO and sell to Microsoft in a deal that would value the internet pioneer company shares at $33 plus. Icahn has suggested that shares in Yahoo are worth $34.375 which values the company at $49.5 billion. He has also pledged to remove the severance plan for Yahoo employees should MS acquire the company in a move that would save Microsoft around $2.4 billion in severance pay.

If the MS falls through, Icahn has said he will seek a deal with Google.

Hmm, it’s getting hot again. Is this all part of Redmonds proxy battle to remove the Yahoo board? Personally, I don’t think so. Microsoft are no doubt pushing ahead with plans for their own search technologies whilst Yahoo are commited to outsourcing search advertising to Google which makes a deal look less likely.

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Make your bloody mind up!

Did you read this article: ‘Microsoft walks away‘? I held up my hand and admitted I was wrong. Now I’m going to put my hand back down. Far from being end game, it would appear that Yahoo are still interested in a deal. Jerry Yang admitted to have mixed feeling over the breakdown of negotiations (probably due to the investor backlash). Yang has suggested that the door is still open to Microsoft - if they’re interested. Share holder believe that the software giant is still interested so let’s see how this plays out over the next few months.

Googley eyes are watching with interest.

Google has no doubt been watching events very closely. The merger of Microsoft and Yahoo would present a formidable opponent in both the search and advertising arenas. It would be fairly reasonable to suggest that recent announcements, such as availablity of Salesforce software through Google apps, have been designed to counter some of competition. The primary source of revenue for Google comes from advertising. If a Yahoo/Microsoft merger started to significantly eat at this source of cash the company would be in real trouble.

Don’t expect Google to slow down either. The merger could still happen. This could cause Google some real pain. I fully expect a whole series of announcements and new applications coming out of the search giants labs, just in case.

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I was wrong!

I’m sure you’ve had one of those days when you’re sure you could never get it wrong. You know the answer way ahead of everyone else. How could you ever be wrong? If your views are ever proved wrong the fragile world you’ve crafted will crumble and fall.

Ok, it’s not that bad but I was sure that Microsoft would make a more aggressive move on Yahoo. Not so. Despite Redmond upping the bid to $47.5 billion (£24.1 billion) no breakthrough was made. The major stumbling block was that Yahoo were insisting on at least $53 billion - a price Microsoft shareholders were not prepared to pay. Microsofts withdrawal was announced by Steve Ballmer in a letter to the head of Yahoo, Jerry Yang.

What now?

This leaves Microsoft with one option - go it alone. The Redmond based company has made a number of search oriented acquisitions suggesting that Microsoft were prepared to take the hard route if all else failed. Ballmer and co. will need to start moving fast. The stakes are high. The Yahoo bid was part of a Microsofts plan to gain a greater share of online advertising - a market predicted to be worth $80 billion by 2010, double that of 2007.

What about Google?

A recent announcement suggests that Yahoo will use Google ads to generate revenue. This may have been a ploy to try and throw off Microsoft. Yahoo has seen a rise in the share of the search market and will work hard to continue this trend. Don’t expect them to give Google an easy rid. There you have it, I’ve put my hand up and admitted I was wrong. But the glittering prize, to the tune of $80 billion, is still up for grabs. Let’s see how it goes.

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But it’ll take some time.

No announcement has been made about the next move in the Microsoft campaign to acquire Yahoo. This may be a ploy. Microsoft gave the internet pioneer until 26th to respond to the unsolicited purchase offer. Yahoo didn’t reply. So, who’s holding the cards? Well, probably both companies. Microsoft would appear to be playing a careful game. Steve Ballmer has suggested that Microsoft can build serious competition in the search market without Yahoo, but it may take some time! Is it just me or was that a pretty obvious statement. Redmond has also been acquiring smaller search companies such as Fast Search. Microsoft could walk away.

Yahoo are in an equally strong position. Recent profit announcements have boosted the managements opinions of the companies value. Add in the recent gains in the share of the search market and you can see why Jerry Yang and co. are holding out for higher share offer. This is the major sticking point. At a recent in-house meeting Ballmer said “I know exactly what I think Yahoo is worth and I won’t go a dime above,”.

In or out of the crosshairs?

I think Microsoft will attempt a hostile takeover. Yahoo is the no. 2 search engine with Microsoft trailing back in 3rd place. The acquisition will them Redmond some real momentum and a serious foundation for a deeper push into the online market so don’t expect them to walk away just yet.

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Err, it’s a lot of money!

It doesn’t look like Microsoft are going to buy Yahoo, well not just yet. A meeting of the Microsoft board of directors on Wednesday didn’t produce a decision. Right now there are three options for MS:

• Walk away
• Replace the Yahoo directors in a proxy battle
• Up the bid

Yahoo has rejected an initial offer of £15.60 per share saying this undervalues the company indicating that a more realistic value would be £17.60 - £18.60. Whilst there may not be much difference between the offer and the recommended figure you have to remember that we’re talking serious quantities of shares.

Steve Ballmer recently suggested that Microsoft could walk away from the deal. Highly unlikely. Redmond wants a big chunk of the internet advertising pie and the statement has been ruled out as a scare tactic.

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But it’s not another social network.

User friendly sites make online life so simple. The latest move by Yahoo aims to ease your online pain and keep pace with the social networks in one simple move. Open Strategy is designed to make sharing Yahoo users information simpler, on both Yahoo’s website and sites that use Yahoo features. But this isn’t an attempt to build a new social network it’s simply a move to make things more ’social’. Hmm, very clear!

Previous attempts at ’social’ functionality, such as MyYahoo, Mash and existing profiles will be rolled up into the new offering.

Don’t expect to see these new features until at least 2009. Yahoo needs to get the buy in from independent software and web services developers before they can make a serious offering.

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Or simply playing games?

It still seems that $43.6 billion dollars still isn’t enough to make Yahoo budge. Steve Ballmer has stated that if Yahoo don’t move soon Microsoft will walk away. But do you think this will really happen? Ballmer stated “Time is money. We made [that] clear in the last letter we sent.” which poses an interesting question. Microsoft states that the delay is costing money but for them to walk away would in reality cost them even more. Seriously, how much time and cash would it take for them to build a serious contender to Google?

Wrangling.

The problem is that Yahoo wants a better deal. The board has said that the $31 per share offer undervalues the company. Due to a decline in value of Microsoft shares the offer is now effectively worth $30.36 dollars. On the basis of comments from Yahoo it’s now stalemate.

Ruling the web.

Microsoft needs the Yahoo merger if it really wants to gain ground in the advertising field. The search services provided by Redmond have not made a huge impact in the market. Without Yahoo on board Microsoft faces a long, hard struggle to seriously compete with Google. “Time is money…” will be a drop in the ocean if Microsoft walks away.

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