Accroding to a report in cnet.com today Microsoft officially pulled its offer for Yahoo on Saturday
In a letter to Yahoo CEO Jerry Yang, Microsoft chief Steve Ballmer confirmed that Microsoft was willing to offer $33 a share, but that Yahoo wanted at least $37 a share.
Ballmer also says he is ruling out a hostile offer aimed directly to Yahoo’s shareholders.
“This approach would necessarily involve a protracted proxy contest and eventually an exchange offer,” Ballmer said. “Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft.”
Ballmer specifically pointed to Yahoo’s plan to outsource its paid search to Google. “We regard with particular concern your apparent planning to respond to a ‘hostile’ bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo today,” Ballmer said.
Such a move, Ballmer wrote, would undermine Yahoo’s strategy and long-term viability, hurt its ability to retain engineers, and pose regulatory and legal problems.
Ballmer said in a statement that Microsoft would pursue its own strategy.
“After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” he said. “We have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners. While Yahoo would have accelerated our strategy, I am confident that we can continue to move forward toward our goals.”
In the letter to Yang, Ballmer again made the case that Microsoft’s offer was the best option for Yahoo shareholders.
“I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares,” Ballmer said. “By failing to reach an agreement with us, you and your stockholders have left significant value on the table. But clearly a deal is not to be.”
Whoo-hoo.
Great news for us all; and congrats to everyone at Yahoo.
Steve
Very bad news for us all.
Now it seems Yahoo will try to form a partnership with Google, following the 2 week test it recently completed leaving domainers and advertisers with only one option.
This is the next big fight for the ICA.
One that will effect every domainer
If that were to happen, I see what you mean.
I believe, however, that the US govt will not allow any meaningful size expansion of this “test relationship” between the two…and Microsoft will no doubt be banging the Feds doors down on such a move as well.
I can tell you from a publisher standpoint…and buying PPC ads to monetize (arbitrage), a Yahoo, MSN merger on just the PPC piece (Yahoo SM + AdCenter) would have been great. Panama is clunky and so is AdCenter, but it is much easier to work with one piece of clunk rather than 2. That said, we make higher margins due to differences between the 2, but limit overall exposure due to clunkiness of rolling out on both platforms.
As a company that buys over $125k each month in PPC ads (Gooogle, Yahoo and MSN) I am disappointed the merger did not happen, but think MSFT was wise in pulling out.
Good News for Yahoo for sure is that the End – time will tell