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Yahoo Strikes Back, Microsoft Doesn't Flinch

Posted Mar 20, 2008 09:07am EDT by Henry Blodget in Investing, Internet
When it reaffirmed first-quarter guidance and gave an upbeat view of 2009-2010, Yahoo obviously wanted to allay rumors of a bad quarter and restate its case that Microsoft's $31 a share bid is inadequate.

But there were other issues at play, including how constituents on Wall Street and in Redmond, Wash. would react to the news.

In the accompanying video, Henry Blodget and NY Times M&A maven Andrew Ross Sorkin decode the latest maneuvers in this high-stakes poker match.

While they disagree on some of the subtleties, Sorkin and Blodget agree: Microsoft will ultimately emerge victorious, even if it has to pony up more than $31 per share for Tech Ticker's parent.

24 Comments

Pma
Pma - Thursday March 20, 2008 09:23AM EDT

Please remove my name from this posting.....immediately.

Anne
Anne - Thursday March 20, 2008 09:51AM EDT

ok Jerry, 34 bucks it is, but we are done, and lets get it done on friendly terms. Tommie Boy,

Yahoo! Finance User
Yahoo! Finance User - Thursday March 20, 2008 10:02AM EDT

Microsoft can't handle what it already has. No need to mess up Yahoo as well.

Yahoo! Finance User
Yahoo! Finance User - Thursday March 20, 2008 10:21AM EDT

agree they are too big and the share - as is the company - are in trouble as it is. should Bill donate the company to a charity .....???! any comments you Yahoo! supporters

FritzH
FritzH - Thursday March 20, 2008 10:23AM EDT

life will go on - even without Google, Apple and Bill

Yahoo! Finance User
Yahoo! Finance User - Thursday March 20, 2008 10:34AM EDT

Yahoo to reaffirm the guidance? They only said it to lure Microsoft to put up more cash. I can guarantee it will miss the estimated target quarter-after-quarter until 2009-2010. If Miscrosoft turns it back on Yahoo, Yahoo would fall below $15 after 2 quarters. YOOHOO!

Bill
Bill - Thursday March 20, 2008 10:36AM EDT

Jerry better deliver on that guidance or he and the board will be gone. Leaving Steve to step in with a new $21-25/share bid, which is still a heck of lot more than Yahoo is worth.

Cristina
Cristina - Thursday March 20, 2008 10:38AM EDT

Can't imagine how internet becomes when Microsoft line up with Yahoo....

Bob B
Bob B - Thursday March 20, 2008 10:43AM EDT

does micro need yahoo?does yahoo need micro? when offer gets to 1000 a share sell and move to key west

Bob B
Bob B - Thursday March 20, 2008 10:43AM EDT

does micro need yahoo?does yahoo need micro? when offer gets to 1000 a share sell and move to key west

Yahoo! Finance User
Yahoo! Finance User - Thursday March 20, 2008 11:01AM EDT

Jerry , smell the bacon burning and get out at $31. In six months you won't be worth $25.

- Thursday March 20, 2008 11:05AM EDT

In my opinion, Yahoo! publicly releasing their "forecast" is a sure sign that they are going to sell the company to Microsoft. No company that expects to remain an independent public company would have put themselves under the pressure associated with hitting stretch targets. If I were the deal guy at MSFT I would be very happy right now.

Toms
Toms - Thursday March 20, 2008 11:32AM EDT

What a disaster --- just as Microsoft and Co. destroyed Hotmail --- anyone remember that takeover? --- they will do to Yahoo! There is simply nothing Micro or Soft about this company. They buy other companies to squelch competition: great for Microsoft --- very bad for the rest of us. Anyone remember how they got started back in the day? They paid $50k for DOS repackaged it as MS-DOS without making it any better and now the whole world suffers with an inferior operating system so cumbersome and prone to attack that whole industries have been created just to defend against world-wide internet intrusions. Yahoo!, on the other hand, is a great company and has been an innovator on the Net for many years. This will quickly stop after the takeover happens. All I got to say to anyone who thinks this is not true is: Have you fought with Vista lately? It is a running joke within the computer industry that any new product put out by Microsoft has so many bugs and backdoor holes in it right of the shelf that it requires twice as many lines of code in corrections and hot-fixes just to work properly. We are sold at inflated prices a million lines of code and then need to download another 2 million ‘updates’ otherwise known as Service-Packs for the darn thing to work. What a shoddy way to do business. Some might say that other products exist like Linux and Mac-OS. True, they are very good and, in the case of Linux, virtually free. But, the prevalence or rather infestation of Microsoft throughout the software market and somewhat useful integration within their product lines makes it a practical impossibility to use those other products on a large scale. So, we have a practical monopoly here, soon to grow larger by the Yahoo! acquisition. (If you prefer, this whole thing is more like a wild game safari than an acquisition with Yahoo! treated just as a hunted, terrified animal.) Therefore, in my very unimportant opinion, Yahoo! should not be bought or sold at any price. For me, Yahoo! is priceless and stands as an icon of everything that is good about the internet. So, the powers that be please do not destroy Yahoo! like you have done very successfully to Netscape. Please leave some parts of the net to the purists that just enjoy the good, the old and now the venerable companies as they are and have been with us almost from the beginning. How will this takeover add value to any of us that use Yahoo! every day? As the example of Hotmail and many other innovative software companies devoured along the way shows, the simple answer is not at all. How can SEC even approve this move? How is it possible for the takeover of the number one internet portal (Yahoo!) by the owner of number three (live.com) and number seven (msn.com --- de facto making Microsoft and Co. owners of the second most popular portal combo on the net) not throwing antitrust flags up all over the place? When a stagnated giant like Microsoft, with unbelievable cash reserves in its coffers, needs to produce many billions of dollars in profits just to grow value for its stockholders, the final result is that that giant will try to absorb everything within its industry just to grow. This equals noting less than a monopoly with a big M, squelching all innovation in sight. Aberrations like this exist because companies that grow too big have a hard time finding places to expand into eventually killing the business that kept them alive. A good example from the natural world is a particularly virulent strain of a virus that kills its host before jumping to another one. So, in final analysis, Yahoo! = good; Microsoft + Yahoo! = bad. Microsoft and all other usurpers of power leave Yahoo! alone. Only good things will come from such restraint.

Toms
Toms - Thursday March 20, 2008 11:35AM EDT

What a disaster --- just as Microsoft and Co. destroyed Hotmail --- anyone remember that takeover? --- they will do to Yahoo! There is simply nothing Micro or Soft about this company. They buy other companies to squelch competition: great for Microsoft --- very bad for the rest of us. Anyone remember how they got started back in the day? They paid $50k for DOS repackaged it as MS-DOS without making it any better and now the whole world suffers with an inferior operating system so cumbersome and prone to attack that whole industries have been created just to defend against world-wide internet intrusions. Yahoo!, on the other hand, is a great company and has been an innovator on the Net for many years. This will quickly stop after the takeover happens. All I got to say to anyone who thinks this is not true is: Have you fought with Vista lately? It is a running joke within the computer industry that any new product put out by Microsoft has so many bugs and backdoor holes in it right of the shelf that it requires twice as many lines of code in corrections and hot-fixes just to work properly. We are sold at inflated prices a million lines of code and then need to download another 2 million ‘updates’ otherwise known as Service-Packs for the darn thing to work. What a shoddy way to do business. Some might say that other products exist like Linux and Mac-OS. True, they are very good and, in the case of Linux, virtually free. But, the prevalence or rather infestation of Microsoft throughout the software market and somewhat useful integration within their product lines makes it a practical impossibility to use those other products on a large scale. So, we have a practical monopoly here, soon to grow larger by the Yahoo! acquisition. (If you prefer, this whole thing is more like a wild game safari than an acquisition with Yahoo! treated just as a hunted, terrified animal.)

Toms
Toms - Thursday March 20, 2008 11:44AM EDT

To all here, sorry that my previous post got so long, but somebody had to say it and I guess that somebody was me. Time heals all things ---because it mostly kills them --- as unfortunately will happen to Yahoo! if this deal is alowed to go through.

Yahoo! Finance User
Yahoo! Finance User - Thursday March 20, 2008 02:09PM EDT

Microsoft will make progress with yahoo,as will yahoo with microsoft.

Yahoo! Finance User
Yahoo! Finance User - Thursday March 20, 2008 03:34PM EDT

Sorry to disagree with the previous Yahoo! Finance User but tom 77373 in his long post said it all.....way to go tom77373 you have it right......The people NEED Yahoo as an independent......

Tom
Tom - Thursday March 20, 2008 05:02PM EDT

msft should be quick at $36 so alibaba is still there

BATO
BATO - Thursday March 20, 2008 10:37PM EDT

To all yahoo supporters, Why not show our support and buy yhoo shares to help the company elude msft's bearhug? Talk is easy, but can we really do something and fight the rich giant ?

Yahoo! Finance User
Yahoo! Finance User - Friday March 21, 2008 12:23AM EDT

It is a critical comments. Good to see thing from multi dimention. Well done.

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