July 03, 2008 | Comments: (0)
Yahoo's struggle for independence
On this 4th of July weekend, let us celebrate the independence of Yahoo -- for however long it lasts. Because just when you thought Microsoft's bid for the Yahooligans was really truly deeply ultimately finally over, it really isn't. At least, according to the Wall Street Journal, which published a report on Wednesday titled Microsoft Seeks Partners for a New Run at Yahoo.
What's most interesting about that story isn't that Microsoft is yet again thrusting at Yahoo's windmills, with either Time Warner or News Corp. as Sancho Panza; it's the almost surreal descriptions of the negotiations that have taken place so far. Like this, for example:
With both companies concerned about leaks, Microsoft took pains to ensure that the meeting remained a secret. It instructed Mr. Yang and his coterie of advisers to drive to the back of the building, where a woman holding a closed red umbrella would be waiting for them at the loading dock.
Or this:
The two sides met at the airport, in a conference room overlooking the runway. The Yahoo camp was encouraged that Mr. Ballmer had donned a polo shirt in purple, Yahoo's color. For several hours, the men discussed Microsoft's proposal to acquire Yahoo's search assets.
Secret meetings at airports and golf courses. Codes sent via a red umbrella and a purple polo shirt. Who knew the Microsoft-Yahoo soap opera was really a dime-store spy novel in disguise?
The underlying theme of the story: Despite all public appearances to the contrary, Yahoo very much wanted to be acquired by Microsoft, even dropping its asking price to $33 a share -- and that it was Ballmer who spurned them, not the other way around.
Such a painstakingly detailed report could only come from someone very high up the food chain in one of the two companies, and it almost certainly has to be Microsoft.
Why? Because the Wall Street Journal is Microsoft's designated leak recipient of choice. Nearly every major story involving Microsoft over the last few years has been broken by the Journal. And that's how MSFT wants it. They get to control the spin.
Reason 2: Yahoo's Jerry Yang and Roy Bostock come off looking like oafish amateurs, at first ignoring Microsoft's advances and then desperately hiking up their skirts for Redmond.
Once the meeting had broken up, [Yahoo director] Burkle told Messrs. Bostock and Yang that they had done everything they could to woo Mr. Ballmer. "We took all of our clothes off," he joked.
Hmm, in whose interests would it be to spin that story, with Yahoo's annual shareholder meeting coming up and Carl Icahn breathing down their necks? I see the fingerprints of Ballmer, the master of FUD, all over this one.
Stay tuned, as they say, for further developments.
Got hot tips or more dirt on Steve "the spy who shoved me" Ballmer? Post them below or e-mail me here - cringe (at) infoworld (dot) com. And have a happy 4th.
Posted by Robert X. Cringely on July 3, 2008 09:08 AM
June 13, 2008 | Comments: (0)
It's over, finito, kaput. The fat lady hasn't merely stopped singing, she's taken off her girdle and waddled home. There are now so many forks stuck into the Microsoft Yahoo deal that it looks like a cutlery display.
This time its really really really really really really really really over. Really.
Or maybe not.
I understand Carl Icahn was so upset at the news that he locked himself in his bedroom and pistol-whipped his Jerry Yang doll. ("You've been a very very naughty CEO and now you must resign your board seat.")
But as one disgruntled suitor walks out, in comes a new one looking spiffy in a bow tie and carrying a bouquet of pansies. Moving from a forced marriage to Microsoft to a 'friends with benefits' non-exclusive deal with Google is like going from shacking up with some hulking brute to dating your gay cousin. You may look stylish when you're out shopping together, but this marriage isn't going anywhere hot.
The grammatically challenged Michael Arrington of TechCrunch was also chewing on his pillow and sobbing about the horrible injustice done to him by Yang et al. To hear him tell it, Yahoo's decision has destroyed the company and the Internet itself:
Yahoo’s hatred of Microsoft runs so deep that they were actually, in the end, willing to destroy the future of their company just to keep it independent for a short while longer. They’ve ignored the wishes of their shareholders, employees and many now former key employees in killing that deal. And apart from Google, CEO Jerry Yang, President Sue Decker and possibly Tim O’Reilly, I don’t believe there is anyone in the world that is happy with what has happened.
Given that in Arrington's world everyone is a VC, that might seem true. But in the world where the rest of us live, most folks really didn't want Microsoft swallowing Yahoo and then coughing up the fur and bones, like an owl digesting a mouse. And once Microsoft gets their teeth into something, you know they won't stop chewing til it's gone.
What's the matter Michael, did you short Google's stock or something?
Problem is, this story really isn't over over. Yahoo still needs to elect a new board, so there's a proxy battle yet to fight. Microsoft is still third in Net search ads and slipping further behind, and Steve Ballmer would rather floss with barbed wire than lose at anything.
There's really only one way to settle this. Jerry Yang and Steve Ballmer wearing sumo wrestler suits, battling mano-a-mano. Last man standing gets to breathe Google's fumes as it rockets into space, leaving them all behind.
Is it really over? And is a Yahoogle better for consumers than a Microhoo? Post your thoughts below or email me direct: cringe (at) infoworld (dot) com. You can also take the BuzzDash poll here. I'll report on the results in a future blog post.
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Posted by Robert X. Cringely on June 13, 2008 07:37 AM
May 16, 2008 | Comments: (0)
Geek Week: CNET gets swallowed, Yahoo proxy fight to follow
I think, therefore Icahn. Just when you thought the Yahoo-Microsoft deal was kaput, in steps everyone's least favorite uncle Carl Icahn to muck things up. In a letter to the Yahoo board, the curmudgeon billionaire scolded board members, then announced his intentions to buy $2.5 billion of Yahoo stock and wage a proxy battle to unseat all 10 members. So after after he forces Yahoo to succumb to the advances of Microsoft, then what? Icahn cashes out, and we're left with this forced marriage from Hell. Nice. Advice to Jerry Yang: Just lay back and think of the stockholders.
And now a word from our sponsors. Tottering media giant swallows up one-time tech upstart whose best days are past. No, I'm not having an acid flashback to the Time Warner -- AOL disaster. I'm talking about CBS scarfing up CNET for $1.8 billion. Admittedly a much smaller deal, but there's the same unmistakable aroma of desperation about it. Yet I can kinda see the logic. The mainstream TV networks suck at covering technology, the average age of a CBS viewer is just shy of three figures, and CNET is a brand name on the Web with a sizable audience of relatively young geeks. So there's "synergy" of a sort. And it looks like genius compared to Comcast buying Plaxo. I think the folks on Comcast's board have been huffing furniture polish again. Paging Carl Icahn, Carl Icahn to a white courtesy phone.
Update yours. Windows Automatic Update has been accused of many evil things, and now we can add one more crime to the list: killing rodents. Apparently, automatic updates are causing havoc for users of Word 2007, including crippling the mouse driver. As described by Christina Wood in her Geek Girlfriends blog, the problem happens whenever Word is open and Update decides to reboot your computer for you. The fix involves editing your Windows registry. As usual, Microsoft needs no help screwing things up, but it's unable to automatically fix them. (Are you listening, Carl?)
Got hot tips or sage advice for Yahoo's board? Post it below or email me here: cringe (at) infoworld (dot) com. Top tipsters qualify for cool swag.
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Posted by Robert X. Cringely on May 16, 2008 06:29 AM
May 05, 2008 | Comments: (0)
OK, I was wrong. It turns out little Frodo and the other hobbits were able to muster enough elves, dwarves, and humans to make the Eye of Ballmeron blink and repel the evil Microsoft from Middle Internet.
In a letter sent on Saturday, Steve Ballmer threw in the towel on the fight to acquire Yahoo, saying a hostile takeover attempt would lead to Yahoo taking "steps that would make Yahoo undesirable as an acquisition target for Microsoft." (I understand Yahoo planned to shave its head, get a nose ring, and go on an all-Twinkie diet.)
The letter, addressed to Jerry Yang but clearly intended for a larger audience, goes into a surprising amount of detail over the differences between what Microsoft was willing to offer and what Yang was willing to accept. Ballmer had upped his offer from $31 to $33, Yang wanted $37, and both of them were too stubborn to split the difference.
As Time's Anita Hamilton asks, what's next for Yahoo? All those folks who snapped up YHOO stock hoping to cash in on the Microsoft deal will sell, and Yahoo's stock will plunge, at least temporarily. Microsoft could then swoop in again, getting a much better deal for a much weaker Yahoo. (Remember, this was not Microsoft's first attempt to win over Yahoo. I'd be surprised if this were truly its last.) Yahoo's stock was trading around $18 per share when Microsoft announced its intentions, and then zoomed up to around $30. If it dips significantly below where it was before Microsoft started getting all hubba-hubba, that $33 offer is going to look awfully sweet. Of course, Microsoft won't offer nearly that much the next time round, if there is one.
The alternative isn't much better. Yahoo's ad deals with Google the Grey could effectively turn it into a functional subsidiary of the search giant -- a massive portal that no longer controls its primary source of revenue. That won't be much fun either.
The third route: Yahoo pulls out of all this and reinvents itself with some truly game changing technology it's got squirreled away, becomes a market leader again instead of a follower. Anybody out there believe that scenario will come to pass?
Personally, I'd rather have Yahoo warts and all than some freakish mash-up with Microsoft or Google. More choice is almost always better than less. Especially when the road to "less" leads to Redmond.
How do you feel about the end of the Microsoft-Yahoo saga? Good news or bad? Post your thoughts below or email them to me: cringe (at) infoworld (dot) com. Swell swag awaits the tops in tips.
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Posted by Robert X. Cringely on May 5, 2008 12:00 AM
February 11, 2008 | Comments: (0)
Yahoo + Microsoft: What's love got to do with it?
First a visit with the late great George Bernard Shaw:
He: If I gave you a million dollars, would you sleep with me?
She: Yes.
He: How about for a dollar?
She (outraged): What do you think I am?
He: We've already established that, madam; now we're haggling over the price.
After a week of hiding in the bathroom with the door locked, pondering its virginity, it appears Yahoo is about to reject Microsoft's offer to buy the company for $45 billion. Not because Yahoo is determined to remain chaste and in charge of its own future, but because the bid was too low.
In other words, we've established what Yahoo is; now we're just haggling over the price.
Investors made Microsoft's job harder by boosting Yahoo's share price to just under what MSFT originally offered -- so much for that "generous 62 percent premium" -- while trimming Microsoft's own share price by 14 percent. So the cash-and-stock deal that started out at $44.6 billion is worth slightly less than $42 billion today.
That may be one reason why Steve Ballmer decided to stop baring his fangs and dish out some sweet talk. "We've got tremendous respect for what Yahoo has accomplished," said Big Bad Ballmer in an interview with the Wall Street Journal. At the same time, he's rumored to be asking Yahoo's rich uncles -- its heavyweight investors -- to urge the reluctant maiden to put out.
Still, flowers, chocolates, and arm twisting only go so far. Microsoft will have to lay down more green -- possibly $40 per share, upping the total package to around $55 billion.
And at that price Yahoo will have to say yes. After all, it isn't getting any younger or prettier. But I can't expect Jerry Yang or the rest of the Yahoo gang to lay back and enjoy it.
To quote Hunter S. Thompson: Old whores don't do much giggling.
UPDATE: In a rumor so ridiculous I couldn't resist reporting it here, Yahoo may be considering buying AOL as a way to fend off Microsoft. (Or so claims the Times of London.) Isn't that a bit like trying to avoid a train wreck by setting fire to your caboose?
Are you fascinated by the whole Microsoft-Yahoo thing, or do you wish it would just go away? Post your thoughts below or e-mail me at Cringe Central. Top tipsters are in line for frosty cool swag.
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Posted by Robert X. Cringely on February 11, 2008 05:52 AM
February 01, 2008 | Comments: (0)
MicroYahoo: A marriage made in heck
We interrupt our regularly scheduled Geek News roundup to bring you this bulletin filled with conjecture and unsubstantiated opinions.
In what has to be both the biggest tech news story of the last year and the least surprising, Microsoft has made a direct offer to put Yahoo investors out of their misery by swallowing up the company -- lock, stock, and two chokin' barrels.
Timing is everything. Yahoo's share price is swirling down the toilet, even though it posted numbers ($205 million profit in Q4) that many companies would kill for. Even at $44.6 billion ($31 a share), Microsoft's "generous" offer isn't outrageous. Look at it this way: They're buying 500 million Yahooligans for around $90 apiece. That is dirt cheap. And they're leapfrogging into a solid No. 2 in search behind Google instead of a pathetic third, just by signing a few dozen documents.
Which is why I predict that Microsoft will not be the only suitor, and some major media company (CBS, News Corp.) or broadband provider (AT&T, Comcast) will dive in with a competitive offer. You know Larry Ellison is kicking himself for not doing it first, because he can't stand to be one-upped by You Know Who.
And after that, well, who knows?
If Microsoft wins the bidding (and I think they will, because they need it more than anybody else), I predict an unholy mess for a good long while, along the lines of the Time Warner/AOL mishegas -- only with even bigger egos to manage.
Yahoo employees will leave in droves, and Google will happily snatch up the good ones. Redmond will slough off the redundancies between it and Yahoo, and it will mostly make the wrong choices -- choosing to keep the stuff it's developed in-house (like Hotmail) instead of the superior products (Yahoo Mail). The revenue bump from online ads will be nice, but merging the two brands will be like a python trying to digest the engine block of an Oldsmobile Cutlass Supreme.
And while Microsoft execs cut a groove in the ozone commuting between Sunnyvale and Redmond, trying to manage two bureaucratic morasses at the same time, the Google machine will chug merrily along, introducing new mobile platforms to carry its ads and kicking Microsoft where it hurts most: in the operating system.
Maybe 2008 will turn out to be a good year after all. Or at least an interesting one.
Is Microsoftization of Yahoo a brilliant strategy or a final desperate ploy from a company that has never truly gotten its head around the Internet? Share your thoughts below or e-mail me here. Prognosticators are standing by...
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Posted by Robert X. Cringely on February 1, 2008 08:59 AM
