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Yahoo Case Study Microsoft

THE build up had all the atmosphere of one of boxing's bigger bouts. But three months after Microsoft laid down the challenge, it elected to walk away from its takeover bout for Yahoo!. On Saturday May 3rd the software giant laid down its gloves, despite expectations of a hostile contest. One last attempt to improve the deal had failed. Microsoft said that it had raised its $44.6 billion bid by $5 billion, but that as Yahoo! was holding out for a bigger purse it would walk away. Failing to buy Yahoo! leaves Microsoft well short in its bid to go after the ultimate champion of the internet: Google.

Microsoft and Yahoo! are a distant second and third in the lucrative business of web search and related advertising. The idea of combining was to challenge the clear leader, Google. Microsoft wanted Yahoo! in order to add critical mass to Microsoft's own advertising platform, to make it more competitive. But Yahoo! was not keen to join the effort to become an advertising counterweight to Google. Jerry Yang, Yahoo!'s founder, had no wish to see the company he created swallowed up by Microsoft. Last year, in an effort to revive his former giant of the web, he resumed his role as chief executive and from that position tried to ward off an offer that he reckoned “substantially undervalues” the company.

These efforts set off a string of shifting alliances, rumour, claim and counterclaim that offered a variety of permutations of tie-ups between big internet firms. Yahoo! has been aiming to compete with Google for years, but without success. Under assault from Microsoft, Yahoo! has hinted that it might give up and, in effect, piggy-back on Google's superiority in order to boost its own profits and persuade shareholders not to sell to Microsoft. Yahoo! ran a limited trial in which it allowed Google to place text advertisements on Yahoo!'s search pages in America. Rumours circulate still that it wants to extend this arrangement. Moreover, other rumours suggest that Yahoo! has been discussing a merger with Time Warner's internet arm, AOL.

As Yahoo! threw up its defences, Microsoft also became the subject of rumours. One suggested that Microsoft might team up with News Corporation, an old-media heavyweight controlled by Rupert Murdoch, a wily new-media operator too. The pair were said to be considering a joint bid for Yahoo!. Yet previously Mr Murdoch had been mooted as a “white knight” to save Yahoo! from Microsoft's clutches. He, probably wisely, decided to avoid involvement in a bidding war against an opponent with deep-pockets.

In the end Steve Ballmer, Microsoft's chief executive, said that Yahoo!'s determination to pursue closer ties with Google, even as takeover talks progressed, were reason enough to drop the takeover offer. For its part Yahoo! reckoned that the prospects of closer advertising ties with Google justified a much higher price than Microsoft was prepared to pay. Mr Ballmer said Microsoft was reluctant to launch a hostile bid as the firm was unwilling to get involved in a protracted fight for the support of Yahoo!'s shareholders. There was also concern that that Yahoo! might make matters more difficult in the meantime: it has already introduced some “poison pills” including an expensive buyout for any worker sacked by a buyer.

Microsoft has lost out and may now look elsewhere to take the fight to Google. Yet there are few obvious targets that would give it the boost that Yahoo! offers, although AOL is a possibility. Yahoo!'s shareholders also stand to lose heavily. Shareholders may not take kindly to a boss who has turned down a fair offer for the company—although Microsoft may yet return to the fray and bid for Yahoo! at a later date. Amid all the dissatisfaction that the fight did not reach a conclusion one winner stands out. Google still has no worthy competitor to challenge for its title as heavyweight champion of the internet.

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    Yahoo/Microsoft: a timeline

    Every week since the $45bn offer, there has been another twist and turn to the takeover drama. Here's a timeline, just for posterity: February 1 2008: Microsoft launches unsolicited bid for Yahoo Tipping off Yahoo head Jerry Yang on the phone the night before,Microsoft chief executive Steve Ballmer goes public with a $44.6bntakeover offer for Yahoo.

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    Microsoft, Yahoo face many hurdles to successful merger

    Launching sporadic strikes at starship Google got Microsoft and Yahoo nowhere. So on Friday, Microsoft let loose a quantum blast across Google's bow - an unsolicited $44.6 billion bid to acquire Yahoo.The proposed merger brims with potential. Yahoo would bring legions of loyal users of its Internet...

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    Microsoft Bids For Yahoo - Complete Coverage Of Possible Merger

    Microsoft Bids For Yahoo - Complete Coverage Of Possible Merger

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    Microsoft gives Yahoo a deadline, threatens hostile takeover

    Originally published April 5, 2008 at 12:00 AM | Page modified April 6, 2008 at 12:29 AM Microsoft Chief Executive Steve Ballmer issued an ultimatum to Yahoo's board of directors on Saturday morning: Agree to our "generous" acquisition proposal within three weeks or we're launching a hostile takeover.

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    Yahoo Builds Defense Against Possible Hostile Takeover byMicrosoft

    Sunnyvale (CA) - Yahoo has published some numbers which the company claims provide some insight why it rejected Microsoft's acquisition offer. The firm unveiled a presentation to investors with financial expectations until 2010, which the company believes provides enough evidence for the claim that Microsoft's $44.6 billion offer undervalues the company.

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    Yahoo has poison pill defense at disposal

    Poison pills are defense mechanisms companies put in place to fend off unwanted takeovers, typically working by giving shareholders the ability to buy stock at a bargain price in the event a predator buys a stake above a certain level.

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    Timeline: Microsoft, Yahoo's road to partnership

    Originally published Tuesday, August 24, 2010 at 10:01 PM Comments (0) E-mail article Print Share A chronology of key events leading to Microsoft's deal with rival Yahoo. KEVIN P. CASEY / AP MARTIN SUNDBERG / AP The Microsoft-Yahoo search partnership was years in the making. 2008 Jan.

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    Microsoft Abandons Yahoo Acquisition

    Microsoft has dropped its nearly three-month-long pursuit of Yahoo, ending a historic acquisition attempt whose failure takes Microsoft back to square one in its quest to boost its online business to better compete against Google. "We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo and the market as a whole.

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    Microsoft Makes Grab for Yahoo

    (See Corrections & Amplifications item below.) The battle for supremacy in the Internet era is entering a tumultuous new phase. Microsoft Corp. placed a bold $44.6 billion bet that buying Yahoo Inc. can transform both companies' flagging efforts...

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    Yahoo's Bizarre Defense: We Didn't Know Microsoft Had Offered $33

    What to make of this bizarre tidbit in today's WSJ? Some folks close to Yahoo (YHOO) appear to be claiming that Yahoo only learned about Microsoft's willingness to pay $33 when they read it in Steve Ballmer's sayonara letter on Saturday: Yahoo learned that Microsoft was willing to make a specific offer of $33 a share only in Mr. Ballmer's letter to Mr. Yang Saturday, these people said.

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    How Microsoft dodged the Yahoo bullet

    Summary: It was five years ago this month that Microsoft officially dropped its plan to acquire Yahoo for $47.5 billion. In hindsight, losing that battle was the best thing that could have happened to Microsoft. All the talk this morning is about what Yahoo did this weekend, spending more than a billion dollars to buy a domain full of animated cat GIFs and naughty pictures.

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    History of Yahoo! - Wikipedia, the free encyclopedia

    Yahoo! grew rapidly throughout the 1990s and diversified into a web portal, followed by numerous high-profile acquisitions. The company's stock price skyrocketed during the dot-com bubble and closed at an all-time high of US$118.75 in 2000; however, after the dot-com bubble burst, it reached an all-time low of US$8.11 in 2001.

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    Yahoo Defense May Fail to Repel Hostile Microsoft Bid (Update3)

    Feb. 12 (Bloomberg) -- Yahoo! Inc., the Internet company that rejected a $44.6 billion bid from Microsoft Corp., may find that a so-called poison pill in its bylaws isn't enough to defend against a hostile takeover. The provision is designed to increase the number of shares outstanding in the event of an unwanted offer, making a takeover costly.

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    Yahoo Gives In to Microsoft, Gives Up on Search

    Ever since Microsoft (MSFT) made its $45 billion bid for Yahoo (YHOO) in early 2008, it was clear the software giant was serious about taking on arch-rival Google (GOOG) in the lucrative Internet search business. And now, after years of talks with Yahoo, it seems Microsoft has achieved its goal.

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    Remember When Microsoft Almost Bought Yahoo For $50 Billion?

    Yesterday, Microsoft announced their Q4 2012 earnings, wrapping up another fiscal year. While most of the numbers on the surface looked pretty good (beneath the surface, we'll see), the entire quarter was dyed red by one element: the... | MG Siegler | Writer. Investor. Thinker. Drinker.

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    Mergers in the Air? Microsoft/Yahoo and Delta/Northwest

    The ongoing takeover battle between Microsoft and Yahoo has taken several surprising turns over the past few weeks. After rejecting Microsoft's unsolicited $44.6 billion offer in late February, Yahoo has announced a two-week ad testing program with its main search rival, Google, and has reportedly entertained a possible merger with Time Warner's AOL.

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    deal falls through...lower bid? proxy contest?

    SHELLY PALMER analyzes Amazon's latest move in the techno-rebellion against the retail industry. Read on to see how 3G phones, white-space devices and future wireless technologies may impact retail stores. MICROSOFT increased its pressure on Yahoo, threatening to begin a hostile takeover if a deal isn't reached within three weeks.

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    Yahoo Directors Re-elected by Wide Margin

    TechnologyYahoo Directors Re-elected by Wide MarginYahoo Directors Re-elected by Wide MarginThe Associated PressYahoo's board emerged largely unscathed from the Internet company's annual meeting Friday as a subdued crowd of shareholders raised few questions about the directors' rejection of Microsoft's $47.5 billion takeover bid. (Aug. 1)Yahoo's shareholders re-elected the company's entire board at the company's annual meeting.

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    Takeover defenses

    a look at takeover defenses

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