Yahoo's Destiny No Longer in its Board of Directors' Hands?

  Juggling 
  Originally uploaded by Hugo*

(Please read our previous post, "Will Yahoo Sell to Microsoft?", to get background information for this post.)

Well, well, well, it seems that Yahoo, the erstwhile débutante, may not be in full control of her destiny.

Although suitors in all shapes and forms have been trying to woo her into marriage...she seems totally confused as to how to proceed.

[Last Thursday,  Yahoo's latest suitor, Rupert Murdoch (owner of Murdoch News Corp.the mega media  company, which has been made even powerful via their ownership of social networking site, MySpace.com), were in long discussions with her with the hope of investing in her to stave off a Microsoft takeover attempt.

There have even been talks of a possible merger between herself and America Online (AOL), as well.

How I see it is that all of these suitors have no vested interest in Yahoo, her customers, nor her shareholders, as there is no additional value that would be created for them, from these mergers.  To them, Yahoo is just a convenient means to fend off any attempt by Microsoft, to dominate the Internet landscape, as it has, the software landscape (industry). ]

Even with these possible mergers, afoot, Yahoo's Board of Directors is still split re whether or not to allow Microsoft to enter the mating arena.

[Although she publicly rebuffed Microsoft's mating attempts last Monday (February 11,2008)...and told them they'd have to up the ante a bit, by offering her USD $40 a share, instead of USD $31 they previously offered, in order to mate...she's losing time.]

The longer she waits, is the more time she will give Microsoft to circumvent the Yahoo Board and go directly to shareholders, again, with the takeover offer.

And we hear that institutional shareholders (the power-brokers of the shareholding world) have a vested interest in seeing that this takeover happens, as most of them own substantial amounts of both Yahoo and Microsoft shares.

Thus a Microsoft takeover of Yahoo, represents a win-win situation for them, as share prices may skyrocket, with this announcement.

Microsoft, being the insistent suitor that they are, won't take no for an answer. They are intent on pursuing Yahoo.

They have too much to lose, by not acquiring Yahoo, no matter what the pundits may be saying re Microsoft's loss in shareholder value, since the takeover offer was made. [Microsoft's share price has dropped by 4 points (thus losing USD $40 billion in value) since its takeover announcement on February 6.

Its stock closed at USD $28.42 on Friday, February 15, but increased by 0.8% to $28.66 yesterday.]

It seems that as far as this takeover attempt is concerned, all that is left to be seen, is:

1) Whether or not Microsoft will up the bid price for Yahoo...

(But given the 2 1/2 year performance of Yahoo's stocks (their stock price has meandered between a high of USD $40.23 in November 2005, to a low of USD $19.18 in January 2008) and given the loss
in value of Microsoft's own shares, since the takeover announcement, I think that Microsoft may feel that the offer of USD $31 per share, is a fair price)

2) Whether or not Microsoft will go to Yahoo shareholders directly, in a hostile takeover attempt

3) Whether EU,US and Chinese regulators will try to stop this takeover attempt. All three regulators have expressed concern at the potential dominance that this takeover will give Microsoft, in the Internet/web space and the impending anti-trust issues (uncompetitive practices) that may result.

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However, I have a few questions for Jerry Yang, Yahoo's Co-Founder and CEO, and Susan Decker, Yahoo's President.

1) What is it that Microsoft sees in Yahoo, that you don't see?

2) You both know what needs to be done to improve her performance...why aren't you two doing it?

Laying off employees, if it improves your profitability, in the short- medium term, may be necessary...but shouldn't those layoffs also include senior and executive management (including members of the Board)?...

Your shareholders and customers have stood with you, despite the hardships, for 2 1/2 years!...please at least allow them to continue rooting for you (supporting you) by including people on your team with the strategic acumen, insight, foresight, guts and drive, to take Yahoo to where she can be...that is, Queen of the proverbial Internet Hill, once again!

Nuff said (Jamaican meaning, enough has been said).

Gillian

Sources Include:

1) Article, "Yahoo and Microsoft's shared shareholders may swing deal", by John Oates, The Register, February 18,2008.

3) Report: Yahoo's Chinese partner concerned about Microsoft bid, Silicon Valley/San Jose Business Journal, February 18,2008

3) Article, "Microsoft bid for Yahoo makes no sense:Barrons" Reuters, February 17,2008

4) Article, "Rupert Murdoch searches for way to help Yahoo avoid Microsoft takeover" By Eric Benderoff, Chicago Tribune Reporter, February 14, 2008

5) Article, "Microsoft deal or not, Yahoo starts to cut jobs", San Francisco (Reuters) February 12, 2008

6) Article, "Microsoft share price plunges following Yahoo takeover bid", by Jack Schofield, Guardian Unlimited Technology, February 7, 2008

Comments

[Gillian Campbell]

Hi Liposuction,

Can you please clarify?

What part of the comment do you disagree with? :)

Thanks in advance.

Gillian

[Liposuction]

I have to disagree with that last comment...doesn't make sense

[Gillian Campbell]

Hi Zander,

Thanks ever so much for your comment and your compliment!

At MOU Blog, we welcome your suggestions for improvement of our blog:

Re your suggestion to do extended posts...I will be putting up a survey for our readers to complete, that will determine if they prefer this format,ok?

Thanks again.

Gillian

[Zander]

Hi there
Great article. You usually don't see that much research going into a blog post, Well done *thumbs up*

you should make the post more readable and approachable though. Try adding an "extending" post instead of the whole thing taking up the front page