Lost in the credit squeeze, market meltdown and basic chaos in Washington and Wall Street over the past few weeks is the sad story of Yahoo (YHOO).
Yahoo shares hit another multiyear low of $13 today. They haven't seen this level since mid-2003. Of course, Yahoo could be trading at $33, or not trading at all and instead be a part of Microsoft. Perhaps a forgotten part of the news this year is that Microsoft made a $44 billion dollar bid for Yahoo, was spurned, raised it, was spurned again, and ultimately walked away.
How sweet that $33/share must look now to Yahoo! shareholders. Remember when Microsoft first made the offer it was a whopping 62% premium over Yahoo's previous closing price. They then added another $2 per share to the price. And there was talk they might actually do the deal in - gasp! - cold, hard cash.
This makes one wonder: where's the Yahoo shareholder anger? Instead of sitting on 60+% return or a ratio of Microsoft shares - which have held up better than most recently - Yahoo shareholders are now sitting on massive losses for the year and a stock at a 5 year low. Something has to give.
There are recent rumored sightings of Yahoo CEO Jerry Yang in New York, with speculation he could be talking deal, perhaps with AOL. That's been rumored for a while, but nothing firm has come out. In fact, its been eerily quiet at Yahoo.
So will Microsoft now come back with a new, lower bid? Earlier this week I asked Microsoft Chief Strategy Officer Craig Mundie if they are interested in making another run at Yahoo and he said it was unlikely.
Still, as Yahoo shares continue to fall there may finally be an incentive for someone to make another run at the company. One thing is clear though: minus a major turnaround, its unlikely Yahoo shareholders will see their stock with a "3 handle" (over $30) anytime soon. They should be furious.
Layoffs Hitting Real Estate, Retail, Bunnies at The Brian Sullivan Blog
[...] 1,000 employees facing pink slips would probably agree that Yahoo should have accepted Microsoft’s buyout bid earlier this [...]
October 20, 2008 at 7:25 am
Gary
In response to Alex
When you are going through hell, don't look back, you might get out before the devil even knows you're there
October 10, 2008 at 10:06 am
Bob
There have been protest on Wall Street but the news media isn't showin it. Media is so bias these days they only show what the higher ups want them to show the sheeple.
October 10, 2008 at 1:18 am
Nathania Johnson
Well, the most likely reason for this past week's drop (besides the larger markets dragging it down) is that Google and Yahoo have postponed implementation of their search advertising partnership to give the DOJ more time. The deal is really Yahoo's only good shot at getting a some cash flow into their company right now.
But Google's earnings call next week will give more insight into whether or not that will even work in terms of the greater economy.
As for Microsoft, I'm not sure why they would want Yahoo at this point. Jerry and the gang have continuously lost market share in terms of searches performed (in the US) over the past year. What they're really after is ad dollars, which is why I've always wondered why they've passed over AOL, whose Platform-A consistently performs as #1 (though due largely to Advertising.com and not so much their other ad properties). AOL has also been slowly but steadily gaining search share, albeit a teensy weensy amount.
A Yahoo-AOL merger attractive for both parties involved. Yahoo still owns a great deal of properties, like their Sports and Finance portals, which attract large amounts of traffic and perform at the top of their respective niches.
There's a lot of room for innovation in the search world. It didn't take long for Google to dominate the market, and quite frankly, I can hardly find what I'm really looking for there half the time. Cody Willard always likes to talk about opportunity in a down market, and this might be prime time for the next innovation in search.
October 10, 2008 at 12:10 am
Alex the Independent
Only Yahoo?
While we're at it, where's the shareholder anger from Bear Stearns, Merrill Lynch, AIG, WaMu, Fannie Mae, Freddie Mac, and every other compant that has gone under in the last six months? Trillions of dollars gone, jobs lost by the tens of thousands, and yet all you hear is the sound of panic as the economic elevator heads toward hell.
How there is no roiting on Wall street is anyone's guess. It's only your money and your life...
October 9, 2008 at 5:12 pm
MIchael
Trust me, there is plenty of anger. I think Jerry Yang should be in prison. He is the single worst CEO ( BTW, other then holding that title, he has absolutely no qualifications to be a CEO, he's a code writer) but I digress. Jerry Yang and his cronies bungled the MSFT merger, they bungled the Alibaba sale ( BTW, that's worth $2.1b less then it was 2 months ago), Jerry Yang was the only one that didn't see Google's half hearted offer at a partnership. Anyone with a brain could have seen that Google was only throwing that lifeline to keep MSFT away. Anyone with a brain could have seen that the second the DOJ started snooping around no way was Google going to risk an anti-trust fight with the Govt. so they are going to hang Yang ( and us shareholders) out to dry. MSFT must be laughing their collective a**es off. Trust me there is PLENTY of anger with the entire management team at Yahoo and for what it's worth if I had my way I'd put them all in prison. They destroyed the company, all because Jerry Yang was to arrogant to sell his precious baby to mean old MSFT.
October 9, 2008 at 4:22 pm
aboutthis blog
Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block.
Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.
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Layoffs Hitting Real Estate, Retail, Bunnies at The Brian Sullivan Blog
[...] 1,000 employees facing pink slips would probably agree that Yahoo should have accepted Microsoft’s buyout bid earlier this [...]
Gary
In response to Alex When you are going through hell, don't look back, you might get out before the devil even knows you're there
Bob
There have been protest on Wall Street but the news media isn't showin it. Media is so bias these days they only show what the higher ups want them to show the sheeple.
Nathania Johnson
Well, the most likely reason for this past week's drop (besides the larger markets dragging it down) is that Google and Yahoo have postponed implementation of their search advertising partnership to give the DOJ more time. The deal is really Yahoo's only good shot at getting a some cash flow into their company right now. But Google's earnings call next week will give more insight into whether or not that will even work in terms of the greater economy. As for Microsoft, I'm not sure why they would want Yahoo at this point. Jerry and the gang have continuously lost market share in terms of searches performed (in the US) over the past year. What they're really after is ad dollars, which is why I've always wondered why they've passed over AOL, whose Platform-A consistently performs as #1 (though due largely to Advertising.com and not so much their other ad properties). AOL has also been slowly but steadily gaining search share, albeit a teensy weensy amount. A Yahoo-AOL merger attractive for both parties involved. Yahoo still owns a great deal of properties, like their Sports and Finance portals, which attract large amounts of traffic and perform at the top of their respective niches. There's a lot of room for innovation in the search world. It didn't take long for Google to dominate the market, and quite frankly, I can hardly find what I'm really looking for there half the time. Cody Willard always likes to talk about opportunity in a down market, and this might be prime time for the next innovation in search.
Alex the Independent
Only Yahoo? While we're at it, where's the shareholder anger from Bear Stearns, Merrill Lynch, AIG, WaMu, Fannie Mae, Freddie Mac, and every other compant that has gone under in the last six months? Trillions of dollars gone, jobs lost by the tens of thousands, and yet all you hear is the sound of panic as the economic elevator heads toward hell. How there is no roiting on Wall street is anyone's guess. It's only your money and your life...
MIchael
Trust me, there is plenty of anger. I think Jerry Yang should be in prison. He is the single worst CEO ( BTW, other then holding that title, he has absolutely no qualifications to be a CEO, he's a code writer) but I digress. Jerry Yang and his cronies bungled the MSFT merger, they bungled the Alibaba sale ( BTW, that's worth $2.1b less then it was 2 months ago), Jerry Yang was the only one that didn't see Google's half hearted offer at a partnership. Anyone with a brain could have seen that Google was only throwing that lifeline to keep MSFT away. Anyone with a brain could have seen that the second the DOJ started snooping around no way was Google going to risk an anti-trust fight with the Govt. so they are going to hang Yang ( and us shareholders) out to dry. MSFT must be laughing their collective a**es off. Trust me there is PLENTY of anger with the entire management team at Yahoo and for what it's worth if I had my way I'd put them all in prison. They destroyed the company, all because Jerry Yang was to arrogant to sell his precious baby to mean old MSFT.