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Summary:

Just when you’d think Google’s financial discombobulation would give Yahoo some rest comes this heartfelt bullet from Microsoft. On the PR newswire this morning runs this incredibly respectful yet dispiritingly asexual love letter from Steve Ballmer to Jerry Yang. And, oh how Mr. Ballmer loves to […]

Just when you’d think Google’s financial discombobulation would give Yahoo some rest comes this heartfelt bullet from Microsoft. On the PR newswire this morning runs this incredibly respectful yet dispiritingly asexual love letter from Steve Ballmer to Jerry Yang. And, oh how Mr. Ballmer loves to dish, to wit:

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that ‘now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.’ According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the ‘potential upside’ if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

Man, you have to hand it to sweaty old “Give It Up to Me!!!” Ballmer.

He corralled Yahoo’s proscribed empire into his greasy fist while preserving that silly artifice of the exclamation point in Yahoo!’s name. Nicely done, Steve. More than that, he finally called Yahoo on the Oz-like illusion it’s been fostering for a couple of years: “You had a year. You lost. All your base belong to us.”

I can’t shake this feeling Ray Ozzie has a hand in all this, but oh well. Yahoo shares finished Thursday at $19.18, but Ballmer & Co.’s bid of $31 a share for the web portal turned…umm, Microsoft property has driven the stock up 50 percent to $28.68 Friday morning.

Microsoft, which has $37.8 billion in cash and short-term investments, was to put out $44.6 billion in cash and stock to buy an Internet pioneer that until a year or so ago was so revered by investors and affiliates that everyone would have laughed aloud at the idea of the ticker MSFT swallowing YHOO.

Now it’s February 2008, and is anyone laughing?…Ben SteinBeuller…anyone??

Having spent my share of last-calls at bars, I can only applaud Microsoft’s ambition in its 3 a.m. bid at corporate copulation — while snickering privately at the 62 percent premium over what everyone else thought Yahoo was worth until this deal was proffered.

Let’s sit down a minute and think about what a Microsoft-owned Yahoo will mean.

Yahoo has been admirably laissez-faire with Flickr and del.icio.us. Will they be preserved or folded into to services we’ve all eschewed? How will Yahoo mail accounts be reconciled with Hotmail accounts? Will those of us who use Yahoo Finance and all its features adapt to MSN Finance? What is MSN Finance?

A 62 percent premium, hmmm –- we Yahoo users have a new choice: Learn to love life under Ballmer, or migrate to Google.

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  1. tons of synergy. just ditch all of MSN and the Ad Center and send that traffic yahoo!’s way. and yeah fold that pesky facebook under the brand while at it.

    btw, nice blog post, all om-esque. well done. this is why i come here first.

  2. Microsoft as always will push hard to gets its technology (a.k.a ASP/.NET) into yahoo data centers and throw away years of infrastructure build up in Yahoo based on robust open source alternatives (like php/mysql/hadoop). This is the same thing that has happened to hotmail.Microsoft technology has never played nicely with anyone else..and the closed nature is not good for something that is based on inter device communications – called “The Internet”/

  3. This is one of the better uses of “All your base belong to us” I’ve seen. And, yes, one of the things Yahoo did right was letting Flickr get on with it… I wonder if Microsoft can be as hands-off?

  4. @spandana

    i am glad you liked the post. the writer is kevin kelleher who is awesome. i am still on my break (stay tuned for the update.) I am going to let him know that I have started to control his brain waves ;-)

    thanks

  5. Kevin Kelleher Friday, February 1, 2008

    @spandana,

    synergy, some. tons? we’ll see. but if this proposed merger adds competition to the mix as you suggest, that may be good in the long run.

  6. Kevin Kelleher Friday, February 1, 2008

    @om.

    jeez, 8:29, okay.

    brain waves….? don’t taze me bro.

  7. take a look at it proerty-to-property, platform-to-platform, and you’d soon realize yahoo leads in every category out there. there are very few exceptions like virtual earth, vista widgets, etc. that post would take time, hopefully you guys get to it before i do :-).

    and btw om, are you going to pull an al roker on us? hope so.

  8. @ Spandana,

    looks like i might have pulled one on you already. I am getting there bro – few more weeks :-)

  9. Kevin Kelleher Friday, February 1, 2008

    @Subash,

    i agree in that i fear for all the thought yahoo has put into its offerings that could get run over by microsoft’s rulebook. and yet, i don’t have a hotmail account but since it’s been a decade on is it that bad?

    @Andrew,

    yahoo’s hands-off treatment of flickr has exemplary, as a flickr fan i can only hope microsoft will follow that example.

  10. Did you really just use the word “pwn” in a serious work of journalism?

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