The market has decided pretty seriously on this one. Microsoft has lost over $20 billion in market cap on an up day in the market, since offering $46 billion for Yahoo this morning.
Yahoo is getting a smoking deal.
This Steve Ballmer is a train out of control. Wealth destroyer. He must have picture of Bill Gates doing some crazy shit at Comdex.
He should have been fired about $100 billion ago.
I have looked really hard at Yahoo as it kept going down but they had no catalyst. A bet on a buyout from a putz like Ballmer is not a catalyst. He must have stood over at yahoo HQ just barking, snorting and sweating on people till they succumbed. Truly, he should have offered $16 and offered to help spin shit off. There is no way other bidders could have been frothing this up.
What do I know though? I am just writing about it wishing I had a bazillion February $20 calls on Yahoo. Somebody did, and they sure kept it quiet based on the stock price of late. Kudo’s to recent Yahoo buyers. You were rewarded for a bad bet in a bad market.
Now that I am on the line with my take, let’s see how wrong I am :) .
Yahoo is the AOL of this decade.
It could easily weigh down on MSFT much like AOL did on Time Warner. All that cash on hand and this is how MSFT uses it ?
Investors aren’t impressed or excited. Can’t blame them …
Brand names don’t matter as much on the internet as they do in the store aisles, IMO.
People don’t care if they’re buying from ABC.com or XYZ.com as long as they’re getting the best service and product at the lowest price.
msft doesn’t have as much net cash as aapl. aapl wouldn’t buy yhoo with counterfeit money. this yhoo move will be a real test. how many years for vista? how about xbox which finally started to break even just in time for the wii and psp3 to start shooting at them. corporate culture differences?
desperate people do desperate things.
this deal gets worse by the minute. I am nauseated for all of us on the internet.
Todd – you are so right about brands.
the only thing that matters is how instiutions reacted to the deal with microsoft stock. they were pissed. Microsoft had a bit of momentum and ballmer shit all over it again.
i dunno, it looks like a positive BARGAIN compared to MisterSoftee pissing $240mm away on 1.6% of Facebook…
Perhaps I’m in the minority, but I think it’s a great move by MSFT (I have no opinion on the purchase price). I hope MSFT is smart enough to fully develop this potential.
This consolidation could change the selling landscape. E-commerce doesn’t get much respect compared to monetizing search or social sites, but it’s still huge and could get even bigger if developed properly.
There’s only 3 major sites where I can sell (unless I have my own site and bring my own traffic), which are Ebay, Amazon and Yahoo. MSFT has now purchased one of them and has the ability to mount major competition to Ebay and Amazon, and frankly, the competition is needed. Ebay falters too often as they try to update selling methods. Amazon limits what and how I can sell through them. In contrast, Yahoo Stores is an excellent, seamless e-commerce setup that does everything Ebay Stores should do. You’ve probably bought from a Yahoo store without knowing it. I could rant like this for quite a while, it would be quite boring, sorry about that.
MSFT is the only one showing initiative right now besides AMZN. With one move MSFT makes a major entry to both search-related advertising and to e-commerce. MSFT has the smarts to carry out what Yahoo couldn’t pull off. For online sellers this is the best thing that’s happened in the last several years.
No current position in these 3 stocks, but thinking about getting back into MSFT.
“There’s only 3 major sites where I can sell …”
Forgetting craigslist ?
No, I only use craigslist to sell items to big to ship easily (like furniture), and I am referring to items that I ship nationally or internationally. My specialties (books, jewelry, antique pottery/porcelain and art glass, collectible gifts itmes) are small and easy to ship , and they need a national market for the best returns.
Here’s an example off the top of my head of a Yahoo store. Nice merchandise, great price points, I can only imagine how much they gladly pay Yahoo every month. http://www.bestwishes.net/index.html
Todd, where are you in FL?
Sarasota
suggested reading is the ny times, 2/2/08 front page saturday business section even if you don’t like their politics. looking for the msft-yhoo deal to become a winner is a longshot at best. i prefer the ny giants and i don’t have to suffer forever to find out if i made the right move.
this ny times msft link may work
http://www.nytimes.com/2008/02/02/technology/02nocera.html?ref=technology
First, the Patriots are going to kill the Giants on Sunday. Second, Microsoft is going to make a comeback that will be the stuff taught at business schools for decades to come. Third, to compare this Yahoo! deal to the AOL-Time Warner deal is just ignorant. Those expecting slow market-share erosion from this deal are wrong and short-sighted.
Howard, do you actually think this was Ballmer’s call? This guys are running a company not a hedge fund. They don’t give a shit about short-term gains.
I don’t pretend to know it all, but Ballmer himself told analysts in July 2006 that buying Yahoo wouldn’t help Microsoft improve its search business, because only Google has a better quality product than Microsoft. So this about other strategies beyond search and ads and I’m sure we will know it in time.
These guys in Redmond are not stupid–they are mean motherfuckers who are finally getting pissed at Google. It should be fun to see what happens. This is not the first time they play catch up–remember what happened to Netscape?
Oh, I love how Google is getting hammered by the market lately.
maximo – agreed on pats, but would never bet it.
microsoft does nt need a comeback. they are gigantic.
I am talking about the stock. and i do think its ballmer. he’s in charge.
this changes nothing and it wont be fun despite them being smart and mean which i agree
I forgot to reply to this funny comment:
“Brand names don’t matter as much on the internet as they do in the store aisles, IMO.”
It’s all about brand name!!! Why do you think Google holds such a big lead in search? Brand name! Both Yahoo! and Microsoft have improved and even matched Google’s search technology, but consumers don’t give a shit or don’t care to check. To the public Google is a better brand and perception is what counts in the end. For Microsoft and Yahoo! it’s been an image problem, so don’t tell me brand is not an issue online.
howard,
after reading the maximo post regarding the giants, i almost went to see a disney movie. now i have big doubts sbout his analysis of msft being better than sliced bread. my earlier post says it all.
Eli Manning with that amazing throw killed the Pats. I still dislike the Giants, but they played an amazing game.
According to Paul Kedrosky google is going to weigh in against microsoft on the yahoo deal. So I guess Ballmer is not the nly fool willing to pay for Yahoo.
Ok, last entry. Tiki Barber must feel like an idiot now.
Would love to hear your take regarding Marc Cuban post on MSFT and Yahoo
http://www.blogmaverick.com/2008/02/03/why-yahoo-should-say-yes-to-microsoft/
cuban is right. no brainer. you take that 61 percent premium which they would NEVER see again. they are not web native and ither than some fantastic traffic and brands, are just a holding company.