2008 Woodie Awards
Microsoft attempts to take over Yahoo
Max Edmands
Issue date: 2/18/08 Section: News
On February 2, 2008, the chief executive of Yahoo, Jerry Yang, received a telephone call from Steven Ballmer, CEO of Microsoft. Ballmer's message was curt and unfriendly: Microsoft was about to make public a hostile takeover bid for $44 billion to buy Yahoo. Yahoo recently rejected the bid, stating that the offer was too low.
This takeover bid is seen by many as Microsoft's attempt to compete with Google, whose online search and advertising presence has overshadowed both Microsoft and Yahoo in recent years. For all three companies, online advertising seems to be the future of competing. Jon Miller, the chief executive of AOL, said in a New York Times interview, "No one can compete with Google on their own anymore. There has to be consolidation among major players. It has been a long time coming, and now it is here."
When the offer was made, however, Yahoo stock was at $19.18. As of Saturday, Yahoo stock rose to $29.66. Before the dot-com bubble crashed, Yahoo's stock reached $118.75. Yahoo and Microsoft met several times in the past few years, discussing a possible merger. However, in every case Yahoo's CEO was adamantly against selling his company.
Yahoo is not just an online search engine with advertising. Its extensive online empire includes email, group services, games, videos, job searches, and news. In fact, in recent years, Yahoo has been spending billions of dollars to create new online content in an attempt to revamp its stock price. Yahoo has also spent billions of dollars to purchase other, smaller dot-com ventures that are very popular among many web surfers, like Flickr, a site where users can upload and view photographs, and Delicious, a collaborative bookmarking service.
Last week, Yahoo announced that it would cut 1,000 employees and prune many of its extraneous services in an attempt to cauterize its losses and start growing again. According to Dan Finnigan, last year's vice president of Yahoo's HotJobs site, "businesses like travel, shopping, music, and even HotJobs were all great products, but none were going to make a huge difference in the fight with Google unless we used them to drive the main search business."
Microsoft has also been attempting to carve a niche in the online content business, with its MSN and "Live Search" technologies. Regardless, Microsoft and Yahoo have been distant runner-ups in the online market. Microsoft executives hoped that the merger would provide it with more engineering talent and technology infrastructure, as well as allowing it to become a leading seller of internet advertising on web sites all across the internet.
This takeover bid is seen by many as Microsoft's attempt to compete with Google, whose online search and advertising presence has overshadowed both Microsoft and Yahoo in recent years. For all three companies, online advertising seems to be the future of competing. Jon Miller, the chief executive of AOL, said in a New York Times interview, "No one can compete with Google on their own anymore. There has to be consolidation among major players. It has been a long time coming, and now it is here."
When the offer was made, however, Yahoo stock was at $19.18. As of Saturday, Yahoo stock rose to $29.66. Before the dot-com bubble crashed, Yahoo's stock reached $118.75. Yahoo and Microsoft met several times in the past few years, discussing a possible merger. However, in every case Yahoo's CEO was adamantly against selling his company.
Yahoo is not just an online search engine with advertising. Its extensive online empire includes email, group services, games, videos, job searches, and news. In fact, in recent years, Yahoo has been spending billions of dollars to create new online content in an attempt to revamp its stock price. Yahoo has also spent billions of dollars to purchase other, smaller dot-com ventures that are very popular among many web surfers, like Flickr, a site where users can upload and view photographs, and Delicious, a collaborative bookmarking service.
Last week, Yahoo announced that it would cut 1,000 employees and prune many of its extraneous services in an attempt to cauterize its losses and start growing again. According to Dan Finnigan, last year's vice president of Yahoo's HotJobs site, "businesses like travel, shopping, music, and even HotJobs were all great products, but none were going to make a huge difference in the fight with Google unless we used them to drive the main search business."
Microsoft has also been attempting to carve a niche in the online content business, with its MSN and "Live Search" technologies. Regardless, Microsoft and Yahoo have been distant runner-ups in the online market. Microsoft executives hoped that the merger would provide it with more engineering talent and technology infrastructure, as well as allowing it to become a leading seller of internet advertising on web sites all across the internet.
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Fasting
posted 2/22/08 @ 5:28 AM EST
MSN wants Yahoo to try to compete with Google but even the combined power of both will not be enough. Whereas Yahoo has decided that they can become much bigger by creating their own niche. (Continued…)
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