27 thoughts on “Is Yahoo Really Worth More Than What Microsoft Offered?”

  1. Who is to blame, I don’t know. But I’m in total agreement with you on this. As Cramer says it best… “Who does Yahoo! think they are?”

  2. Yahoo has shown a distinct lack of fundamental innovation right from its very beginnings. Name a single technology OR product that Yahoo has pioneered in its ten year+ history. This should have been the company that did the best search, could have been the first ‘cloud’, should have been monetizing search better, could have been the *bay, should have been….

    From its beginnings as an incrementally better & bigger directory, its been an incremental innovator. A bit here, a bit there and always an MSB short of a full byte.

    So here we are in 2008, it still has massive user numbers who have stuck around but not pushed Yahoo to innovation or punished it for not innovating. A permanent state of limbo.

    The valuation being offered by Microsoft seems generous given the current macro economic conditions and within the range a deal could get done.

    And so it goes.

  3. Methinks it’s not so much delusion as it is denial…sort of an, “Anyone but you!” rejection of Microsoft. They just needed some type of way to justify the move and stall for time.

  4. At the end of the day, Yahoo! is a directory service at the core. It has done little in way of innovation, but it is difficult to argue that Yahoo! is NOT the premiere directory on the internet. That said, the MS offer is fair in that regards, and in my opinion Yahoo! should take the offer on the table.

  5. Probably yahoo do not accept ANY offer, they try to be independent. IMO, in the current recession Yahoo does not worth for more than $25 a share.
    I guess, MS already know that Yahoo do not accept the offer at $30, if the talk goes for long time(10+ months) that is not good for GOOG (MS initiated a proxy war?). MS may try to build a better search engine instead.

    I like to see that Yahoo should buy BIDU, MS should buy CMCSA, Google should buy a mobile operator. If it happens, there would be a heavy competition and lot of innovations. that’s good for everyone.


  6. They are worth exactly what someone is willing to pay. If they can get some foolish company or the public markets to cough up $40/share, Yahoo is right. Otherwise, they are wrong. As an outsider, it seems that Yahoo is a lot more valuable as a part of Microsoft than as a standalone concern. Possibly, Yahoo themselves feel the same way and are just trying to drive up the price. Certainly, this would not be the first time a company rejected an “unsolicited” offer only to be acquired by the same company, at a higher price, not long down the road.

  7. Saran, how would it help Microsoft to buy Comcast. One could argue that regulatory scrutiny is already their biggest problem and buying a network operator would increase that by an order of magnitude. Anyway, given that they already have a boxes inside peoples houses (XBox and Windows PC), they would be better served by building their own network. Why spend their piles of cash upgrading Comcast’s legacy stuff when it is more cost efficient to build new stuff from scratch? Penetration of XBox and Windows PC is a much bigger footprint than Comcast’s physical plant.

  8. om, spot on. Thanks for the wake up call. Hopefully MS will not offer more mad money. 40 billion for 500 mil. a year in cash flow? Sharepoint is now past 1 billion in revenue and its a new product. How can yahoo expect more than the mad money already offered.

  9. at least, for the next 20 years MS going to burn wire/wireless networks more than anyone else. MS needs a smooth transition (operators not even allowing bit torrent, they invested lot of money so they are right to claim) from desktop OS/Games/Office to live OS/Games. Comcast is a good choice because they are close to reaching the cap (30). building a new one take many years, the delay in each year MS may lose ~10B income per anum.

  10. No. Yahoo doesn’t have a coherent strategy. That’s a fact — I challenge anyone to articulate what it is if you disagree.

  11. @Jesse,

    Thanks for that comment – clearly the market will be ultimate deciding force. Still, to think that they are worth $40 a share, i can’t say why. I hope Microsoft holds the line as well.

  12. @ Check,

    THe question of being #1 – does it matter? MySpace is #1 in Social Networking and throwing up massive page views, but how much money does it really make?

    Same is with Yahoo… how many more ads can they cram in their email service? Thy are already flooding the market with the ads, one of the reasons I switched to another paid service.

  13. Read more into the deal, it isn’t just about what MS is saying publicly. Don’t get me wrong they want the Search component and the Ad component but what everyone is missing is the unseen bonus for MS. They get to buy Yahoo with all the fanfare about Search and Ad and what gets missed is they get to extinguish a competitor. Who you ask Yahoo? No, Zimbra a company Yahoo recently purchased which competes against MS Exchange in SMB as well as Google Apps. Check out Zimbra road map and you will see they have more than Exchange on their minds they are also developing MS Sharepoint competitor as well.

    Lastly, I understand a few major shareholders (funds) would like to see this deal happen to pump their lack luster performance as of late but I thought they were suppose to look long term. Yahoo’s outlook long term looks very promising if you look at what they are doing overall and where they are taking Yahoo.

  14. Agree for the most part.

    Hate to see you disparage Bill Miller though… his record speaks for itself.

    Fun to watch this play out though… I think MSFT will raise the bid.

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