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Thursday, February 14th, 2008

Yahoo’s Road to War – The Bumps and Scrapes in Sequence

 

Over the past week I have been keeping the StepForth SEO Blog updated on the events focused on Microsoft’s attempted acquisition of Yahoo and the fall out since. This is becoming quite a debacle so I thought a little chronological update on how all this went down might be useful.

From 2006 to Now

  1. 2006: Rumors abounded that Yahoo and Microsoft were in talks about working together and that an acquisition was possible. However, nothing substantial was revealed at the time but we later learned that Yahoo refused to work with Microsoft.
  2. May 4th, 2007: The rumor mill was working overtime that Microsoft was quietly trying to acquire Yahoo for $50 billion. I was elated :-)
  3. Jan 22, 2008: The New York Times reports that Yahoo is expected to layoff hundreds of staff in order to boost profitability and share prices. The quarterly earnings report is eagerly anticipated on Jan 29th.
  4. Jan 29, 2008: Yahoo’s quarterly earnings fall short of shareholders expectations.
  5. Jan 29, 2008: The New York Times relays news from Yahoo that the search giant has confirmed it will layoff 1000 employees by mid-February.
  6. Jan 31, 2008: Microsoft officially offers to acquire Yahoo while the iron is hot for $44 billion which is roughly equivalent to $31 per share.
  7. Feb 1, 2008: Yahoo announces its Board of Directors will evaluate the unsolicited offer from Microsoft.
  8. Feb 3, 2008: Google’s David Drummond weighs in on the hostile bid by Microsoft citing concerns that a potential purchase of Yahoo by Microsoft “raises troubling questions”. He goes on to ask “Could the acquisition of Yahoo! allow Microsoft — despite its legacy of serious legal and regulatory offenses — to extend unfair practices from browsers and operating systems to the Internet?” Check out this hilarious interpretation of Mr. Drummond’s blog posting by Kara Swisher.
  9. Feb 11, 2008: Yahoo’s Board of Directors deny Microsoft’s offer on the grounds that the proposal “substantially undervalues Yahoo!” Here is a link to the common questions and answers page that Yahoo created for the media.
  10. Feb 11, 2008: Microsoft promptly responds to Yahoo’s rebuff with a ‘gloves are off’ tone. In the letter Microsoft says it will “ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.”
  11. Feb 12, 2008: The first lawsuit was filed against Yahoo by shareholders unhappy the company didn’t agree to the Microsoft buyout.
  12. Feb 12, 2008: The first of the 1000 Yahoo layoffs begin.
  13. Feb 12, 2008: Yahoo exec Bradley Horowitz leaves Yahoo and moves to Google. Bradley was head of Yahoo’s Advanced Technology Division and his departure is only the beginning of a long list of talent that is likely to leave Yahoo over the coming months. See Bradley’s bio and you will see why this respected man’s departure will hurt. To his credit, however, Bradley insists his departure was not directly due to recent events.
  14. Feb 13, 2008: Yahoo writes a letter to shareholders trying to drum up excitement in companies future without Microsoft.
  15. Feb 13, 2008: Yahoo announces an acquisition of online video company Maven Networks. Why? “Video is projected to be the fastest growing segment of the online ad market, and Maven will significantly help advance Yahoo’s strategy, expanding the video opportunity for publishers and increasing the efficiency and effectiveness for advertisers.”Sniff… sniff… I smell desperation! This is yet another rallying cry from Jerry Yang to help keep Yahoo from the slobbering jaws of Microsoft… unless of course Microsoft offers $35 or $36 a share at which point OKAY.

So What Now?
First of all, forget about Google saving the day. I would put money on Google being out of the picture for any possible partnership with Yahoo; Google is just not interested in the certain SEC ramifications of such a partnership.

With that potential path closed Yahoo has had to look elsewhere. As a result there are rumours that News Corp and Yahoo are talking in an attempt to forge a deal that could counter Microsoft’s.

Meanwhile Yahoo is facing pressure from all sides to make a move that appeases the company’s particularly distressed shareholders and they had better do something soon. Otherwise, (this is hard to believe) matters could actually get uglier.

by Ross Dunn, CEO, StepForth Web Marketing Inc.

Feel free to republish this article under the following conditions: the posting must credit the author (Ross Dunn) before it begins and it should include a permalink back to this original posting (without a nofollow). Thank you.

3 Responses to “Yahoo’s Road to War – The Bumps and Scrapes in Sequence”

  1. Anonymous

    I think that yahoo has been sucking it’s customers dry for a very long time! Crappy service without a fair return for advertisers.GREED! Add in the FACT that it’s search directory has been giving out lousy results for years! It’s no wonder and about time this company goes belly up! I just hope that Google and Microsoft MSN learns from this and make a major effort to restore and push honest search engine results for both the millions of company’s and searchers that depend on them! for their livelihoods!

  2. Anonymous

    I’m not a “yahoo” lover ether but I dislike microsoft even more. See, my auto spell checker tried to get me to capitalize microsoft and I refuse. Anyone but microsoft. Wait, do you secretly work for them?

  3. Ross Dunn

    LOL, no I do not secretly work for Microsoft although I am sure the pay would be worthwhile ;-) Nope, I am afraid I just want both Yahoo and Microsoft to combine so they screw up and make some room for newcomers. Pretty simple, pretty cold, and totally self serving – new entities mean an injection of excitement into the search sphere.

    I have nothing against either company at least not with any sincerity.

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