Victor Cook

Will Microsoft's Proxy Threat Force Yahoo!'s Hand?

Make that Yahoo's Audacious Option! at customersandcapital.co...

Will Microsoft's Proxy Threat Force Yahoo!'s Hand?

Maybe there's another alternative. See "Yahoo's Aduacious Option!" at customersandcapital.co...

Did Microsoft 'Massively Undervalue' Yahoo?

Ted,

Thanks for your comment. I agree Yahoo! appears to have limited options, most of which are unattractive.

Tomorrow evening I'll post an article, "Yahoo's Audacious Option!," which proposes taking the company on a different path to its future. I’d like to get your comments on that story before I post it. If you’re interested please send an email address to me. Thanks

~V

Did Microsoft 'Massively Undervalue' Yahoo?

User 127562,

Those required multiples will depend in large part on how investors perceived the future value of Yahoo! cashflows given on the strategic direction management took to achieve optimal earnings. Will they not?

~V

Microsoft Panics, Overpays For Yahoo

Michael,

And they don't need to shell out nearly $45 billion to fix a Selling & Marketing over-spend problem lives in Redmond's backyard. See my "Microsoft-Yahoo Deal: A Question of S&M Synergy" at seekingalpha.com/artic...

Microsoft + Yahoo = No Longer a Recipe for Success

Dana,

Not a good recipe for success and besides, Microsoft doesn't need to spend $45 billion to fix their problem, because the source of that problem is in Redmond's back yard. See my post on "Microsoft-Yahoo Deal: A Question of S&M Synergy" at seekingalpha.com/artic...

M&A Implications of Microsoft's Yahoo Bid

Markos,

There may be syngeries from a Yahoo! acquisition but Selling & Marketing are not among them. See "Microsoft-Yahoo! Deal: A Question of S&M Synergy." at seekingalpha.com/artic...

Microsoft Takeover Bid for Yahoo!

The underlying problem with this merger is the lion’s share of the redundancies Mr. Ballmer refers to are in his own backyard.

In 2006 it cost Microsoft 18.8¢ more to generate a dollar in sales than it cost Google. Multiply that 18.8¢ times its sales revenues and you find that Microsoft had an $8.3 billion dollar problem. That's how much the company was over-spending on enterprise marketing in 2006 compared with Google. And it cost Yahoo 15.1¢ more to generate a dollar in sales than it cost Google. Yahoo had a $1 billion dollar problem. Combined there were almost $10 billion in redundancies at the companies.

The combined R&D spending ($7.4 billion) and Selling, General & Administrative ($16.3 billion) expenses of MSFT and YHOO totaled $23.7 billion in 2006. So their redundancies relative to Google amounted to over 42% of total spending. And over 85% of those same redundancies belong to Microsoft. These could be reduced without shelling out $45 billion for Yahoo. For the details see my April 16, 2007 article “Microsoft’s $8 Billion Problem” at www.customersandcapita...

Microsoft/Yahoo Deal Should Go Through

And that's the $45 billiion question of the day, Thomas. The underlying problem with this merger is the lion’s share of the redundancies Mr. Ballmer refers to are in his own backyard.

In 2006 it cost Microsoft 18.8¢ more to generate a dollar in sales than it cost Google. Multiply that 18.8¢ times its sales revenues and you find that Microsoft had an $8.3 billion dollar problem. That's how much the company was over-spending on enterprise marketing in 2006 compared with Google. And it cost Yahoo 15.1¢ more to generate a dollar in sales than it cost Google. Yahoo had a $1 billion dollar problem. Combined there were almost $10 billion in redundancies at the companies.

The combined R&D spending ($7.4 billion) and Selling, General & Administrative ($16.3 billion) expenses of MSFT and YHOO totaled $23.7 billion in 2006. So their redundancies relative to Google amounted to over 42% of total spending. And over 85% of those same redundancies belong to Microsoft. These could be reduced without shelling out $45 billion for Yahoo. For the details see my April 16, 2007 article “Microsoft’s $8 Billion Problem” at www.customersandcapita...

What Would a Combined Microsoft-Yahoo Look Like?

The underlying problem with this merger is the lion’s share of the redundancies Mr. Ballmer refers to are in his own backyard.

In 2006 it cost Microsoft 18.8¢ more to generate a dollar in sales than it cost Google. Multiply that 18.8¢ times its sales revenues and you find that Microsoft had an $8.3 billion dollar problem. That's how much the company was over-spending on enterprise marketing in 2006 compared with Google. And it cost Yahoo 15.1¢ more to generate a dollar in sales than it cost Google. Yahoo had a $1 billion dollar problem. Combined there were almost $10 billion in redundancies at the companies.

The combined R&D spending ($7.4 billion) and Selling, General & Administrative ($16.3 billion) expenses of MSFT and YHOO totaled $23.7 billion in 2006. So their redundancies relative to Google amounted to over 42% of total spending. And over 85% of those same redundancies belong to Microsoft. These could be reduced without shelling out $45 billion for Yahoo.

For the details see my April 16, 2007 article “Microsoft’s $8 Billion Problem” at www.customersandcapita...

Microsoft's $154 Billion Question: Accounting For the Unaccountable

Thanks for the clarification. I understand. But the point remains that the present value of its cash flows are driven not by tangible assets, but by those many other sources of value that are intangible. Pinning down the sources of that value is the purpose of my analysis of optimal SG&A spending ... what I call "enterprise marketing expenses." For the details see my audio slide show at breeze.tulane.edu/chap.../

Wharton Prof Debunks Market Share Myth

Carl and Paddy,

There's a simple solution to this old problem: target that market share that optimizes enterprise marketing expenses. The result is maximum earnings. See any of my posts on SA or just click on this link to my blog customersandcapital.co...

Microsoft's $154 Billion Question: Accounting For the Unaccountable

Thomas,

No, I have no idea how much cash MSFT has in sub-prime paper.

~V

Sorry for the delayed reply to your question, I just now discovered the list of comments on my posts.

It May Be Time To Give Microsoft A Well-Deserved Break

Here's a fresh take on Google and Microsoft in their competition for capital and customers two quarters out:
"Google vs. Microsoft: Blue Ocean vs. Red Ocean Stock Pricing" at www.customersandcapita...

It May Be Time To Give Microsoft A Well-Deserved Break

Here's a fresh take on Google and Microsoft in their competition for capital and customers two quarters out:
"Google vs. Microsoft: Blue Ocean vs. Red Ocean Stock Pricing" at www.customersandcapita...