Yahoo CEO Jerry Yang doesn't want to see another Bradley Horowitz go. So, to stop key talent from heading out the door, Yahoo plans to stuff a few coat pockets with fat new retention packages, Kara Swisher reports. Along with more cash, these packages will include a change-in-control clause that bloats the severance pay a new owner would have to pay to lay off these employees.
Microsoft hasn't upped its offer to buy Yahoo and isn't negotiating behind closed doors, Microsoft chairman Bill Gates said. "We sent them a letter and said we think that's a fair offer. There's nothing that's gone on other than us stating that we think it's a fair offer," Gates told the AP. "They should take a hard look at it." Microsoft's offer continues to hover around $29 dollars a share, down from $31 — though anyone who wants $31 a share in cash can take the money and run.
In the Yahoo-Microsoft takeover battle, Yahoo's 40 percent stake in Yahoo Japan is treated as an afterthought: Spare goods to be sold off to boost shareholder returns. But Yahoo Japan, in its home country, is Google, eBay, and Yahoo rolled into one. It's worth $29 billion — more than Yahoo itself was worth before the Microsoft bid. Which raises the question: Why isn't Yahoo Japan the one buying Yahoo? Before you dismiss it, consider the precedents.
DoubleClick and Postini lead a list of 19 acquisitions Google completed during its fiscal 2007, according to the company's annual 10-K filing. After the $3.1 billion it spent on DoubleClick and the $625 million for Postini, the rest of the deals cost Google $281.6 million. Want a piece next time the pie goes round? Here's the guy Google just put in charge of finding small fish in 2008.
The management of Yahoo, burdened by a culture of niceness, does not begin to understand what it means to be mean. Take Microsoft's hiring of Blackstone Group investment banker Jill Greenthal as an advisor. Greenthal, pictured here, is a respected dealmaker. But more importantly, she's best buds with Yahoo president Sue Decker, who worked with her at Donaldson Lufkin & Jenrette. Kara Swisher says that the two haven't spoken since Microsoft launched its $44.6 billion offer to buy Yahoo. Would Microsoft hire a banker just to rob Decker of a trusted friend's advice? Of course not, but it seems like a useful fringe benefit.
Nvidia should think about buying chipmaker AMD to "rearchitect it," according to American Technology Research analyst Doug Freedman. Translation: Kick out management, change its technology direction, and end AMD's perpetual Perils of Pauline drama. Both AMD and Intel have plans to integrate graphics functions into their microprocessors, rendering Nvidia's graphics cards superfluous. Nvidia CEO Jen-Hsun Huang would be a good candidate to turn around AMD's fortunes, and "buying AMD propels nVidia into a formidable competitor for Intel," says Freedman.
In a new letter to shareholders, Yahoo CEO Jerry Yang explains why he and the board rejected Microsoft's acquisition bid. It's a rehash of the internal memos sent to employees and then prophylactically leaked to the SEC these past few weeks. In the letter, Yang promises that Yahoo will grow its online advertising market share to 20 percent "over the next several years." So far, Yahoo shareholders remain unconvinced. The company's share price remains essentially pegged to Microsoft's bid. Here's the whole thing.
We keep hearing Plaxo has signed a deal to sell the company. But is the buyer Google — where engineer Brad Fitzpatrick is buddy-buddy with Plaxo's Joseph Smarr? Or is it Comcast? The latter. Comcast, we're told, has bought Plaxo for $175 million in cash. While Plaxo has tried to reinvent itself as a social network, its still primarily used as an online address book. And that's the appeal to Comcast.
Click to viewSo Microsoft buying Yahoo for $44.6 billion is a big deal. No, it's a massive deal. Before Microsoft's share price dropped, it was to be the second-largest tech deal made in the past decade after AOL/Time Warner. Even more impressive? Like the AOL deal, this is a merger you can explain to your mom. Most people have never heard of the big tech companies. Hell, I've never heard of some of them. SDL? JDS Uniphase? Veritas? Aspect Development? I have no idea what they do. But you don't need to be a household name to be worth billions. Here are the 15 biggest tech deals since 1998.
Michigan lawyer David Fink has filed a lawsuit against Yahoo's board of directors. His client, the Wayne County Employee's Retirement System, owns 13,600 shares of Yahoo, and wants Yahoo's board to consider Microsoft's $31-a-share offer. Before you laugh at the scrappy pension fund's move, know this: It has sued public companies before.
Brin, Page and Schmidt have cut and run on Yahoo CEO Jerry Yang. Word is Google execs visited with Yang and the Yahoo board last week and encouraged them to say no to Microsoft's offer. As incentive to do so, Google is said to have offered to take over Yahoo search and immediately boost the floundering company's cash flow. On Monday, Yang officially rejected Microsoft's offer. But now that Yang and the board face a proxy fight with Microsoft, these Google executives are suddenly less interested in bailing Yahoo out, the WSJ reports. Sources tell the paper that the Googlers' enthusiam waned as antitrust worries waxed. But we wonder if all Google wanted in the first place was to keep Microsoft and Yahoo from doing anything quickly.
Yesterday, Yahoo's board officially rejected Microsoft's unsolicited — now hostile — takeover bid, and I had a grand time coming up with headline after headline, but sadly we could only run one of them. Here's our chance to be creative! Come up with a great headline and post it in the comments below. If you've never commented before, sign-up instructions are after the jump. Here are some of our favorites.
Microsoft's half-stock, half-cash $44.6 billion bid for Yahoo has confused many. The price, people tell you, varies with the fluctuation of Microsoft's stock. Not exactly. Only half of it. The way Microsoft is making the offer, shareholders can get either stock or cash. Once the stock or cash portion is gone, the remaining shareholders are stuck with what's left. While the value of the stock has varied, the $22.3 billion cash portion hasn't; and That introduces an interesting incentive which works to Yahoo's disadvantage: Shareholders can opt for cash now, or risk being stuck with less-valuable shares later, if the bid goes through. Those who doubt Yahoo's present management get the higher reward. Quite a twist.
Yahoo employees are being targeted by Valley recruiters as Yahoo's best and brightest ponder a future with Microsoft. "Ninety percent of our clients are asking for Yahoo talent, particularly in the last two weeks," said Bruce Brown, managing partner at executive search firm Daversa Partners. The sharks have been circling for weeks after talk of layoffs began, but the purple blood in the water from the Microsoft bid has whipped headhunters into a frenzy. Yahoo executives are interested in talking to recruiters. Even Valleywag is getting headhunted. Our tips line received the following email from a gentlemen trying to find a few good Yahoos. Anyone want to take him up on it?
Yahoo admitted it bought online-video distributor Maven Networks today. It turns out Maven founder and CEO Hilmi Ozguc made out better than we thought. Yahoo said it bought Ozguc's company for $160 million, not the $150 million originally reported. All that on just $30 million in funding. Which is good, Hilmi, but if you'd held out for just another $5.5 billion, maybe you could buy a basketball team, learn to dance and complain when reporters don't do what you tell them to do, too.
Yahoo CEO Jerry Yang's earned new respect all over the Valley for standing up to Microsoft and Steve Ballmer over the weekend. On Wall Street, major investors think enough is enough. Mutual fund house T. Rowe Price, which owns 18 million Yahoo shares, yesterday said it would be "very vocal" if Yahoo rejected any increased offer from Microsoft. Fund manager Larry Puglia called Yahoo "floundering." Capital Research and Management, which owns 11.6 percent of Yahoo, wants Yang and the board to welcome their new overlords, too.
At Microsoft CEO Steve Ballmer's bidding, proxy solicitation firm Innisfree yesterday began calling Yahoo shareholders to ready them for a fight to replace Yahoo's board, the New York Post reports. Over the weekend, Yahoo CEO Jerry Yang and the Yahoo board said it would take at least $40 a share for Microsoft to buy the company. That's a price one source close to Microsoft called "absurdly high." Ballmer has until March 14 to nominate new directors to Yahoo's board who agree.
HotorNot.com, the online "dating service" that lets you rate pictures of the opposite sex based on hotness and then connect with the ones you like, has been bought for around $20 million according to TechCrunch. Valleywag alumna Megan McCarthy pours water on that figure, citing cofounder James Hong: there were "very few people on the deal and there's no reason for us to tell anyone" about the price. Founders James Hong and Jim Young will no longer be involved with the company after the sale. Hong said, "It's time to break up with this girlfriend."
The elaborate Kabuki routine being acted out in Microsoft and Yahoo's boardrooms serves one purpose: To cloud the notion that the takeover is about money. It is, of course. Watercooler talk at Yahoo's Sunnyvale HQ is that management is pushing for $36 a share — conveniently more than halfway between Microsoft's initial $31 bid and Yahoo's $40 counter. But Jerry Yang seems opposed to a sale at any price. And he has a secret plan to reboot Yahoo.
Yahoo CEO Jerry Yang made all the right noises in leaked memo number three this morning. But shareholders don't really believe Yahoo will remain independent, Bits points out. If they did, Yahoo's share price would already be back near its four-year low, as it was before Microsoft made its offer. Instead, Yahoo shares closed at $29.87, about a dollar more than where Microsoft's current offer stands, at $28.91 per share.
