OMEN
05-07-2008, 06:35 PM
Yahoo CEO says Microsoft was unwilling to complete the deal
Facing shareholder ire and a plunging stock price, Yahoo Inc. CEO Jerry Yang said Yahoo board members would still sell the company to Microsoft Corp. or another suitor if the price is right.
According to Bloomberg, Yang said late yesterday that Yahoo would be open to a sale as long as the company is not "undervalued" by any potential bidders.
"We've always felt the Yahoo platform has been undervalued or underappreciated by the marketplace,'' he said in an interview with Bloomberg. "Our most important goal is to make sure we have a long-term competitive position."
According to a separate report in the Financial Times, Yang said it was Microsoft, not Yahoo, that was unwilling to complete the deal; his company wanted to continue negotiations on a price.
"We did not say it was a take-it-or-leave-it number in the sense that we would never negotiate any more," he told the Financial Times. "We were totally willing to do a transaction, and they walked away."
On Saturday, Microsoft withdrew its bid to acquire Yahoo after failing to agree to a price even after Microsoft raised its bid from about $31 per share, or about $44.6 billion, to $33 a share, which was about $5 billion more than the original offer.
Yang's comments indicate he is backtracking on the position he held during Microsoft's three-month attempt to purchase Yahoo, and they come as the Internet company faces pressure from shareholders who think the company was foolish to pass on the offer.
Yang was reportedly against the deal from the start, and Yahoo made various moves during the three months to avoid an acquisition, such as mulling a partnership with AOL LLC and striking a deal with Google Inc. to test Google's AdSense for Search service as one of the Web publishers that carry pay-per-click text ads from Google.
Yahoo also attempted to buy time when Microsoft threatened to mount a proxy battle for the company. For example, on March 5, Yahoo lifted the following week's deadline for nominating directors to its board in an attempt to discourage Microsoft from trying to replace the current board with members willing to approve its Yahoo acquisition bid.
The company also unveiled a flurry of product and strategy announcements in the months following Microsoft's bid, pointing out that each initiative proved it could continue to go it alone as an independent company.
Now that the deal is no longer on the table, Yahoo must convince investors that it can turn around and deliver on promises that it can grow its revenue at a pace that pleases Wall Street and allows Yahoo to compete successfully against Google in online advertising.
Shareholders are already getting restless. Two public pension funds from the city of Detroit already said they plan to expand a complaint, originally filed as two lawsuits on March 5, against Yang and other members of Yahoo's board of directors, saying it failed to act in the best interest of shareholders in rejecting Microsoft's bid to buy Yahoo. Yahoo will likely face a barrage of similar class-action suits in the coming months.
Yahoo's shares closed down 15% at $24.37 on Monday, the first trading day after Microsoft backed out of the deal. Yahoo's stock price was up slightly when the markets opened Monday, trading at $25.55, and closed at $25.72, up 5.5% from yesterday.
In the meantime, Microsoft is distancing itself from the Yahoo deal and is focusing on internal plans to grow its Internet business, according to comments made by a company manager at the Merrill Lynch Technology Conference.
"Certainly, Yahoo would have been an accelerator, but we've withdrawn the offer, moved on, and now we're focused on how to grow as fast as possible organically," said Brian Hall, general manager of the Windows Live Business Group, during a conference presentation made available via webcast.
Juan Carlos Perez of the IDG New Service in Miami contributed to this article.
IDG
Facing shareholder ire and a plunging stock price, Yahoo Inc. CEO Jerry Yang said Yahoo board members would still sell the company to Microsoft Corp. or another suitor if the price is right.
According to Bloomberg, Yang said late yesterday that Yahoo would be open to a sale as long as the company is not "undervalued" by any potential bidders.
"We've always felt the Yahoo platform has been undervalued or underappreciated by the marketplace,'' he said in an interview with Bloomberg. "Our most important goal is to make sure we have a long-term competitive position."
According to a separate report in the Financial Times, Yang said it was Microsoft, not Yahoo, that was unwilling to complete the deal; his company wanted to continue negotiations on a price.
"We did not say it was a take-it-or-leave-it number in the sense that we would never negotiate any more," he told the Financial Times. "We were totally willing to do a transaction, and they walked away."
On Saturday, Microsoft withdrew its bid to acquire Yahoo after failing to agree to a price even after Microsoft raised its bid from about $31 per share, or about $44.6 billion, to $33 a share, which was about $5 billion more than the original offer.
Yang's comments indicate he is backtracking on the position he held during Microsoft's three-month attempt to purchase Yahoo, and they come as the Internet company faces pressure from shareholders who think the company was foolish to pass on the offer.
Yang was reportedly against the deal from the start, and Yahoo made various moves during the three months to avoid an acquisition, such as mulling a partnership with AOL LLC and striking a deal with Google Inc. to test Google's AdSense for Search service as one of the Web publishers that carry pay-per-click text ads from Google.
Yahoo also attempted to buy time when Microsoft threatened to mount a proxy battle for the company. For example, on March 5, Yahoo lifted the following week's deadline for nominating directors to its board in an attempt to discourage Microsoft from trying to replace the current board with members willing to approve its Yahoo acquisition bid.
The company also unveiled a flurry of product and strategy announcements in the months following Microsoft's bid, pointing out that each initiative proved it could continue to go it alone as an independent company.
Now that the deal is no longer on the table, Yahoo must convince investors that it can turn around and deliver on promises that it can grow its revenue at a pace that pleases Wall Street and allows Yahoo to compete successfully against Google in online advertising.
Shareholders are already getting restless. Two public pension funds from the city of Detroit already said they plan to expand a complaint, originally filed as two lawsuits on March 5, against Yang and other members of Yahoo's board of directors, saying it failed to act in the best interest of shareholders in rejecting Microsoft's bid to buy Yahoo. Yahoo will likely face a barrage of similar class-action suits in the coming months.
Yahoo's shares closed down 15% at $24.37 on Monday, the first trading day after Microsoft backed out of the deal. Yahoo's stock price was up slightly when the markets opened Monday, trading at $25.55, and closed at $25.72, up 5.5% from yesterday.
In the meantime, Microsoft is distancing itself from the Yahoo deal and is focusing on internal plans to grow its Internet business, according to comments made by a company manager at the Merrill Lynch Technology Conference.
"Certainly, Yahoo would have been an accelerator, but we've withdrawn the offer, moved on, and now we're focused on how to grow as fast as possible organically," said Brian Hall, general manager of the Windows Live Business Group, during a conference presentation made available via webcast.
Juan Carlos Perez of the IDG New Service in Miami contributed to this article.
IDG