Yahoo's response to Microsoft's threat

The battle between Microsoft and Yahoo is getting hotter by the day. Here is a copy of the letter that Yahoo sent to Microsoft recently.

Dear Steve:
Our Board has reviewed your most recent letter with regard to the unsolicited proposal you made to acquire Yahoo! on January 31, 2008.

Our Board carefully considered your unsolicited proposal, unanimously concluded that it was not in the best interests of Yahoo! and our stockholders, and rejected it publicly on February 11, 2008. Our Board cited Yahoo!’s global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision.
At the same time, we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.

Since disclosing our Board’s position with respect to your proposal, we have presented our three-year financial and strategic plan to our stockholders, which supports our Board’s determination that your unsolicited proposal substantially undervalues Yahoo!. Those meetings with our stockholders have also provided us an opportunity to hear their views.
We have continued to launch new products and to take actions which leverage our scale, technology, people and platforms as we execute on the strategy we publicly articulated. Today, in fact, we are announcing AMP! from Yahoo!, a new advertising management platform designed to dramatically simplify the process of buying and selling ads online.

Finally, our Board has been actively and expeditiously exploring our strategic alternatives to maximize stockholder value, a process which is ongoing. All of these actions have been driven by our overarching commitment to maximize stockholder value.
Our Board’s view of your proposal has not changed. We continue to believe that your proposal is not in the best interests of Yahoo! and our stockholders. Contrary to statements in your letter, stockholders representing a significant portion of our outstanding shares have indicated to us that your proposal substantially undervalues Yahoo!. Furthermore, as a result of the decrease in your own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal.

In contrast to your assertions about the effect of general economic conditions on our business, Yahoo!’s business forecasts are consistent with what we outlined in our last earnings call. As you know, we recently reaffirmed our Q1 and full year guidance, which is a testament to our ability to perform in line with our expectations despite the current economic environment. In addition, our three-year financial and strategic plan which we have made public demonstrates significant potential upside not previously communicated to the financial markets. This plan has received positive feedback from our stockholders, further strengthening the view that Yahoo! is worth well more as a standalone company than the value offered in your proposal, and would be even more valuable to Microsoft. Your own statements have made clear the strategic importance of Yahoo!’s substantial assets and capabilities to Microsoft.

We regret to say that your letter mischaracterizes the nature of our discussions with you. We have had constructive conversations together regarding a variety of topics, including integration and regulatory issues. Your comment that we have refused to enter into negotiations to conclude an agreement are particularly curious given we have already rejected your initial proposal, nominally $31 per share at the time, for substantially undervaluing Yahoo! and your suggestions in your letter and the media that you are considering lowering the value of your proposal.

Moreover, Steve, you personally attended two of these meetings and could have advanced discussions in any way you saw fit. As to antitrust, we have discussed with you our concerns. Any transaction between us would result in a thorough regulatory review in multiple jurisdictions. As a follow up to a recent meeting among our respective legal advisors we had on this topic, and at your request, we provided to you on March 28 a list of additional information we would need to further our understanding of the regulatory issues associated with any transaction. To date, you have still not provided any of the requested information.
We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction. We are confident that our stockholders understand that our independent Board is best positioned to objectively and knowledgeably evaluate our Company’s alternatives and to maximize value.

In conclusion, please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value.
Source : Yahoo.

Microsoft bids for Yahoo at $44.6 Billion

Techworld has reported that Microsoft has offered to buy the search engine company Yahoo for $44.6 billion (£22.4 bn) in cash and shares.

Here is the excerpt:

The offer is 62 percent above Yahoo's closing share price on Thursday.

"We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," said Steve Ballmer, chief executive officer of Microsoft.

"Our lives, our businesses, and even our society have been progressively transformed by the web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure," said Ray Ozzie, chief software architect at Microsoft.

The bid comes hours after Yahoo announced that Terry Semel was stepping down as non-executive chairman, six months after handing over his CEO title to Jerry Yang. Semel is leaving the board effective immediately, Yahoo announced yesterday. He will be replaced as non-executive chairman by another board member, Roy Bostock, the company said.

Semel was chairman and CEO of Yahoo for six years until he was replaced in a management shuffle last June. Yang, one of Yahoo's co-founders, was made CEO, and Semel was demoted to non-executive chairman.

As CEO, Semel helped to build Yahoo's audience from 170 million to more than 500 million users. But he was also blamed for missteps that allowed Google to build a commanding lead in online search and advertising, prompting last year's reorganisation.

"With the Company moving forward under new leadership, I believe this is an appropriate time for me to step down from the board," Semel said in the statement.
He approached the board several months ago about leaving once a replacement could be found, Yahoo said.

Bostock has a long history in the advertising industry, "an area that is more important than ever to Yahoo's business and our long term success," the company said.

UTV acquires ITNation - Techtree.com, CXOToday.com, Channeltimes.com & Enterpriser.in

UTV, LSE and ISE listed, media major has apparently acquired ITNation which owns Technology major online portals Techtree.com , CXOToday.com, Channeltimes.com & Enterpriser.in .

I see this as one of the 2008's major Media acquisitions further bolstering the 2008 predictions worldwide, of focus moving away from traditional media. And this move clearly shows, how traditional media Big-Wigs are convinced of new media, social media, online portals taking over or atleast fuelling the growth of businesses.

With this acquisition, sooner or later this year, we are bound to see some more similar acquisitions and it's a clear indication that worldwide businesses will have to get geared up to match the competition in 2008.

I do see, how, UTV gets an access to a huge database of highly qualified audience, a large online fan following, a clean carrier to reach athem all and keep their brand leadership and provide more and more relevant content and entertainment through new channels.

A positive move for digital marketeers.