General discussion

Why does Yahoo HAVE to be aquired by anyone?

Ok, I'm seriously confused. Why is Yahoo having talks with everyone all of a sudden. Microsoft made an offer, they refused.

I'm confused as to why Yahoo is talking to News Corp. and other companies. Has Yahoo been looking to be acquired prior to the Microsoft offer? It don't make much sense that Yahoo feels like they have to sell just because there was an offer on the table. Are they not a big enough player in the online market place to exist on their own?

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Their fate is kinda sealed.

To the best of my knowledge, Yahoo now really has no choice in the matter. The public offer from Microsoft is more a formality than anything, trying to push their hand. Microsoft if determined to get the company, so, even if Yahoo executives do not want the company purchased, Microsoft can go after individual shareholders, and perform a hostile takeover. What Yahoo is trying to do is now maximize its profits, and try yo slow the acquisition, by searching for other, higher bids. If shareholders think they might get a higher payoff if Yahoo shops around, the executives may be able to prevent the sale of the company for quite some time.
If Microsoft wants the company, can pay for it, and the regulators don't stop it, Yahoo doesn't have a whole lot of choice in the matter.

This is my grasp of the topic, hope it answers your question.

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So a hostile take-over is the means in which a company woos the shareholders to eventually out-vote the company?

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Hostile Takeover

A Hostile takeover is slogging it out the old fashioned way and buying the stock without the cooperation of the companies board of directors.

Get the support and you can make a tender offer making much easier to take over the company. This is what Gateway did with Acer.

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it doesn't have to be, but shareholders and users...

it doesn't have to be, but a vocal community of shareholders and users would like it to kinda regain some vibrance that competes well against Google and other competitors - being acquired or getting a big new business partner would be a way to do that.


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They don't.

Nobody has to take over Yahoo. Publicly traded companies though are subject to people buying their stock on the open market and taking them over one share at a time.

Tender offers are a method to save time and money in doing that.

Why companies buy others varies. In the case of MicroSoft it's quite simply because they lack the skill, knowledge, and creatvitity to grow on their own. Apparently others do things that MS would like to do, and do them better and first. Leaving MS to bring money to the table as the only thing they can really offer.

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Where did the money come from?

So, if Microsoft "lack the skill, knowledge, and creatvitity [sic] to grow on their own," where did they get all that money to bring to the table?

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By doing well in other areas?

Just because MS has made money selling certain types of software, it doesn't mean that they are any good in various aspects of online service, search, or advertising. Microsoft has always been a growth-by-acquisition company: They are good at this type of business strategy. If they were really good at search, advertising, etc., they would not need to purchase anything. They could continue growing what they already have, and create what they don't have. MS generally doesn't operate that way. They buy something and change it or incorporate it into one of their existing offerings.

You will have to remember, also, that MS has lagged behind in network/internet connectivity products, as Bill Gates had thought the internet a "fad". Now MS wants the revenue from online advertising, and it is just easier to buy that capability than to grow it themselves, eliminating one competitor at the same time. Good business practice, right?

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Microsoft wants to stop Google

Microsoft is willing to pay a whole lot for Yahoo because it hopes to use Yahoo to stop the growth of Google. Google has shown increasing success with online applications that threaten Microsoft's core business - operating systems and office suites. Who needs Vista if all the OS does is run a browser? Expect to see the Yahoo toolbar installed in Internet Explorer by default, all searches will be directed to Yahoo by default, and it will be a pain to change the default search to Google.

Microsoft got so big in the opinion of most computer junkies who witnessed its growth in the '80s is that it rode the coat-tails of IBM until it didn't need IBM any more. "PC-DOS" was distributed on all IBM microcomputers, and then Microsoft worked out deals to distribute MS-DOS preinstalled on all new PC clones. It was good business, but MS-DOS was not better than the competitors. Later, IBM thought it was collaborating with Microsoft to develop OS2, but actually Microsoft was developing an independent Windows strategy. Eventually, Microsoft ended the "collaboration" when it had sufficient market share that it did not need IBM. The official Microsoft word was there was a clash of cultures, but this didn't seem to be a problem for the many years that IBM supported Microsoft's growth.

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Cash Cow

Now they are a classic Cash Cow.

Back then they put the time and effort into creating their own product (Dos then Windows) and built on that success with their software.

Now, they buy market share and other peoples work.

That's not to say they haven't had some success. I think (but could be wrong) the Zune and 360 are built on their own efforts.

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You're both correct.

Microsoft is definitely "The Man" or "Cash Cow". It is the second biggest company in America. They have enough money to buy and sell any company in the US except for Mobil.

But they have been very innovative and creative with all marketing aspects. They went from a simple OS to applications, browsers, applications, video games and even "Office" bundles.
I'd say that shows quite a bit of creativity and that they bring a heck of a lot to the table.

Yes, they're a big, greedy machine and their products could use much improvement on their first release. But that's everything in today's market. Many of Sony's PS3's store models burnt out even before people could see what the machine could do, but they still sold out. The XBOX 360 had a few glitches and is still selling strongly.

MS just released Vista. Now the bugs are getting worked out and it's becoming a viable OS. It seems like using the public as ginnea pigs is crappy ethics, but it's apparently great bussiness.

It only makes sense that they should buy out one of the big search engines. That way they can showcase their own products first, as if they were 'more relevent' or the 'best match'. That should keep people looking at their stuff before getting to MAC or Norton applications. Therefore, increasing profits.

Those who are in power to create the rules will always benefit from them. That's what a capitolist society does and the Yahoo! buyout is just another step.

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