Microhoo Part Deux: Is Jerry Selling Out His Employees? 13 comments
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I had to laugh when I heard rumors concerning the new Microsoft-Yahoo negotiations. Let’s see, Jerry Yang turned down Microsoft’s (MSFT) original offer because (a) it substantially undervalued the long term prospects of the company, and (b) he wanted to keep the unique culture and spirit of Yahoo (YHOO).
In Jerry Yang’s blog to his employees (Ok, so now what?), he apologized for the three month distraction, but assured his employees of a bright future.
Some even questioned whether Microsoft’s unsolicited proposal would distract us from our mission, just as we were beginning to really push the pedal on our strategy.Those people underestimated the determination of Yahoo’s incredible people, spirit and culture….
Has this experience changed us? Of course, it has. We’ve emerged a stronger, more focused company with an even greater sense of purpose. I’m so proud of how this company has come together, put the noise aside, and showed the world that we have the resolve and determination to thrive in challenging times.
Finally, I’d like to thank the many of you who so passionately shared your support for Yahoo. That’s what brings it all home for us.
Translation: I was not going to abandon the people I brought to this company just to make more money for the shareholders in the short term. We are building the future of the Internet. Our people have been dedicated to our mission, and we’re going to see it through for the benefit of our company, our shareholders and our employees.
Carl Icahn threatens a proxy fight, and Roy Bostock responds (response we just issued):
After considering input from its financial advisers the board unanimously concluded that Microsoft’s proposal significantly undervalued Yahoo and was, therefore, not in the best interests of the company or our stockholders.Conversely, we do not believe it is in the best interests of Yahoo stockholders to allow you and your hand-picked nominees to take control of Yahoo for the express purpose of trying to force a sale of Yahoo to a formerly interested buyer who has publicly stated that they have moved on.
Three or four days later, we find out that Jerry and the Board are now negotiating with Microsoft to (a) sell its search business to Microsoft, (b) sell its Asian assets to Alibaba and (c) let Microsoft take a minority interest in the “leftover” Yahoo.
It’s a good thing that Icahn doesn’t get control of Yahoo’s Board, because he would destroy the business by doing what? Oh yeah, I forgot, trying to force a sale of Yahoo to Microsoft by, yes, you’ve got it: (a) selling its search business to Microsoft, (b) selling its Asian assets to Alibaba and (c) letting Microsoft take a minority interest in the “leftover” Yahoo.
So you won’t sell the whole company to Microsoft for $33 a share, but you will sell your two biggest engines for growth and let a competitor take a minority interest in Yahoo. Can’t wait to see how much the shareholders can anticipate getting from this deal.
Why am I getting the feeling that the shareholders will be getting a dividend payout of about $15 a share, and they will be left with stock in Yahoo with earnings of about $.45 - $.50 a share. With a P/E of about 25, and that may be high given the company’s stated goal of 12% growth in the display ad business, the “leftover” shares will be worth about $12.50 a share.
That adds up to about $27.50 a share. Now hey, that would be brilliant negotiating!
Oh and what happens to all the employees. Here is my prediction of Jerry’s updated blog:
To: All Hands – Ok So Now What? [UPDATE]You remember all those things I said – oh, well ah, “never mind”.
But I’d like to thank the many of you who so passionately shared your support for Yahoo. That’s what brings it (the cash) all home for us (David and I).
You are people with incredible spirit and culture.
Now use some of it to update your resume.
Where is Mark Cuban when you need him? He may be crazy but at least he looks out for his team.
Disclosure: None
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This article has 13 comments:
why is dying in the arms of goog better than dying in mr softie's arms?
simply escapes me
Because the pieces might live on, in some form. Yahoo is thinking about their CUSTOMERS. MSFT has no track record at all with regards to managing technology. They couldn't even maintain HoTMail.
How sweet! I guess, that's why Yang and his bod demanded $37 instead of the $33 offered. It was their customers , stupid! That's what they were caring for - all the time.
Sure.
How sweet! I guess, that's why Yang and his bod demanded $37 instead of the $33 offered"
Every man has a price. ;)
some customers are priceless, though ;-)
A common failing. But if Jerry fails to SET a price-- even a possibly unrealistic price, wacko shareholders will sue. They already ARE. At least with a price tag, one can claim one is willing to deal.
Oh wait, after the announced partnership with GOOG, MSFT will go away.
Chatrooms saved! ... but supported by GOOG ads.
Wouldn't want them to lose those huge dividends or have to pay the huge taxes on those nice capital gains on the sale.