Yahoo and Microsoft start to talk
Posted
Mar 14 2008, 03:23 PM
by
Kim Peterson
Yahoo seems to be dropping its anyone-but-Microsoft merger attitude. Senior executives from both companies met on Monday to discuss Microsoft's cash-and-stock acquisition offer, although "discuss" might be too strong a word, since the Yahoos "mostly listened," according to the WSJ.
Yahoo had a duty to shareholders to at least hear Microsoft out, now that its list of possible alternatives is down to pretty much zero. AOL is busy with its $850 million acquisition of social networking site Bebo. Rupert Murdoch says News Corp. is staying out. Google lost its initial enthusiasm about thwarting the bid.
It's unclear how serious the meeting was. No bankers attended and no negotiation took place. We don't even know if the CEOs were there. But the official silence has been broken. Yahoo shares fell nearly 3% today to $26.71 on the news, and Microsoft shares are down nearly 2.3% to $27.96.
Some things have changed since the Jan. 31 acquisition bid. Microsoft shares have dropped some 14%, causing the total value of its offer to fall to about $28.79 a share from $31 a share. Microsoft is also seeing a minor exodus among its top advertising execs, with the departures of Steve Berkowitz and Joanne Bradford, creating a void that Yahoo's team could fill nicely.
The San Francisco Chronicle has an interesting article about Yahoo CEO Jerry Yang, at one time an avid poker player (and a guy who likes $1,000 bottles of wine). Yang's a pretty decent negotiator, according to the article:
"People who have seen Yang, 39, at the negotiating table say he's passionate, a master of details and someone who has built personal relationships across the technology industry that help him close a deal. Although affable and self-deprecating in public, he's tenacious, competitive and unafraid to challenge managers he disagrees with, those who have seen him in action say."
Microsoft CEO Steve Ballmer is known as an intense negotiator as well. When these two get in a room, sparks will fly.
Here's what others are saying about the news:
Silicon Alley Insider: "More likely, however, the meeting represents a thawing of the Yahoo-Microsoft ice. For the sake of both companies, we hope it soon leads to more formal negotiations."
Blogging Stocks: "From my perspective, any deal that ties MSN and Yahoo together will add some value to the web combination, but it is not certain that Yahoo under the wing of Microsoft will not lose some valuable freedom and much of its charm."
News.com: "And while it's not unusual for executives to chat informally about 'what if' merger scenarios without bankers and lawyers hovering about, it was a particularly smart move on Microsoft's part, said one former banker."
(Disclosure: I don't own shares of any companies mentioned in this post. And while Microsoft owns this blog, Microsoft does not control, censor or otherwise have any editorial influence over what I write.)
