Microsoft and Yahoo are back at the table, Microsoft says today. In a press statement, the company says:
in light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo! Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo! Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties. There of course can be no assurance that any transaction will result from these discussions.
This is clearly in response to Carl Icahn’s bid to replace the Yahoo board and bring the company back to the table at Yahoo, and continued speculation that Yahoo may jump into bed with Google on a search deal.
For now, the discussions are centered on “a transaction with Yahoo but not an acquisition of all of Yahoo.” That could mean a pooling of search assets to block Google, for example. And of course, once they are at the table a full acquisition could still happen. I enjoy the jab at the end of the statement that suggests Microsoft is willing to negotiate with just about anyone who claims to control Yahoo at this point - “discussions that may take place with Yahoo or discussions with shareholders of Yahoo or Microsoft or with other third parties.”
We’re back in business on this deal, and the recent logo has been shelved for now.
Update: Email from Kevin Johnson to all Microsoft Platform employees:
From: Kevin Johnson
Sent: Sunday, May 18, 2008 1:30 PM
To: Platforms & Services Division; APSP FTE - Adv & Pub Solutions Platform; Employees.all.corp.adf@main.corp; Employees.all.adf@main.corp
Subject: Online Services Strategy Update
We have been executing against the core strategy I first presented at our Financial Analyst Meeting in July 2007 to go after the growing opportunity in online services and advertising. Four pillars have formed the basis of our strategy:
1. Consolidate ad platform and win in display
2. Innovate and disrupt in search
3. Deliver end-to-end user experiences across PC, phone, and web
4. Reinvent portal and social media experiences
We have many options that support acceleration of our strategy. As announced earlier today, we are also considering new alternatives for a transaction with Yahoo! which do not involve a full acquisition. At this time, we have not made a new bid to acquire all of Yahoo!, but we reserve the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo!, shareholders of Yahoo! or Microsoft, or with other third parties.
Regardless of the outcome of any new discussions, it is important that we continue to move forward to strengthen our online services business. The fact is that we are not where we want to be in this business yet and we’ve been in this position longer than we’d all like. To that end, we will be accelerating elements of our core strategy, and breaking ground in new areas.
On Tuesday, Brian McAndrews is hosting advance08, our annual advertising conference here in Redmond. Over 400 leaders from across the media, technology and advertising landscape will be here for two days to engage in dialogue on industry trends and opportunities. These leaders are some of our closest partners in the digital transformation of the advertising industry, and they recognize the increasingly important role Microsoft plays in this transformation. We are very excited to have these customers and partners on campus.
Brian‘s keynote will highlight our unique position in the advertising industry. It’s amazing to see how far we’ve come with the aQuantive acquisition in differentiating our advertising platform. This foundation is paying off, with Q3 advertising revenue growth of nearly 40%, a rate that has accelerated over the past two quarters while growth rates at Google, Yahoo and AOL have slowed.
On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You’ll hear more about our plans Wednesday.
advance08 will underscore our commitment to search and online advertising, and you’ll continue to see announcements demonstrating our progress in this space. Earlier this week, I spoke to leaders across our online services business about our core strategy, the importance of acceleration and a set of actions we are taking, including:
1. Innovate and disrupt in search – We will disclose some elements of our plans with this week’s release of search and sharpen our focus on user experience and business model innovation. The work we have done over the last 4 years on search has established a solid foundation to build upon.
2. Win targeted distribution – With this release of search, we are now ready to throttle up broader distribution initiatives.
3. Reinvent portal and deliver new experiences across PC, phone and web - We are building our new releases of Windows 7, Windows Live wave 3, Windows Mobile 7, Internet Explorer 8, Search and MSN with an eye towards optimizing and unifying experiences and scenarios.
4. Fix our online branding – Our brands are fragmented and confusing today, and we recognize a need to clarify and align our online branding . We are now driving forward to address this opportunity.
5. Win in display advertising - We have an advantage in tools, agency assets/relationships and a team laser-focused on capturing the display ad platform opportunity. As we build from a position of strength, we will increase engineering resources to drive even more innovation.
6. Build on our strengths in Europe – As measured by comScore in March, our online business in Europe is doing well. We have over 3 times the page view volume and nearly 7 times the minutes of usage compared to Yahoo!, and 68% reach to internet users throughout Europe. We will double down on our investments in Europe and expand on this strong position.
7. Expand strategic partnerships – In addition to our organic innovation agenda, we will expand strategic partnerships that increase inventory on our display ad platform, enable new paradigms in search and accelerate growth in key geographies.
8. Pursue small, targeted acquisitions – Looking forward, we will focus on small, targeted acquisitions that support our work in search, complement our value in the ad platform and help us grow scale in key geographies. Recent acquisitions including Rapt and YaData are examples of these types of acquisitions.
The PSD leadership team is actively working on the FY09 budget, including resources and investments to support the actions above. Additional elements of our work will be revealed in the coming weeks, leading to our Financial Analyst Meeting in July where I will share more details on our strategy and business/financial outlook.
As we move forward, I want to remind everyone that we are well positioned to compete. We have some of the industry’s best assets on our side: technical and business talent, global scale, a culture of self-criticism and tenaciousness, a healthy balance sheet and an unparalleled product portfolio. It’s time for us to seize the opportunity.
Thanks again for your continued leadership and focus on our business. If you have any feedback or thoughts, please feel free to send me mail at kevinjo@microsoft.com.
Regards,
Kevin Johnson l President Microsoft Platforms & Services Division l p. 425-705-8081
Executive Assistant l Sandi Baldock l p. 425-705-8082
One Microsoft Way l Redmond l WA l 98052-6399
Source?
Carl and Bill had lunch.
Wow… again?
What’s that mean? Search deal?
Wouldn’t it always be considering and exploring? How the heck is this press release worthy?
MSFT - 2
Yang - 1
I think that Microsoft is playing a game, they are planning to go for a kind of partnership then they will acquire Yahoo.
What do you think
It didn’t work out the first time, so why try again?!?
Jon lets have a lunch too.
>> How the heck is this press release worthy?
I’m sure Microsoft doesn’t desire to issue a press release on this. I don’t see how announcing this helps them in any way.
So why did they issue it?
Unfortunately, the many class-action lawyers out there are always looking for ways to sue a company that “misleads” shareholders about possible transactions. For this reason, it’s probably prudent for MS to issue this release.
They need some big “news” for their Advance 08 conference on Tuesday. This will at least allow them to walk around the conference and issue “no comment” in response to questions.
I don’t see how this release say’s anything at all other than they’re continuing to push forward with or without Yahoo!
Three word summary of the press release :
“Life Goes On”
Ugh…time to start looking for another webhosting service. This would be a disaster for consumers.
It ain’t over till the sweaty Ballmer sings.
The fun starts again, looks like my feed reader will be filling up with Microsoft+Yahoo stuff.
Michael ! Congratulations your dream is going to become true
You guys are always looking to say Microsoft is wrong. Microsoft would probably have strongly preferred not to say anything unless and until a deal is struck. But class action lawyers love to file lawsuits against companies that don’t do “full disclosure” well ahead of time, even if it’s non-news.
I’d hate to be a developer at Yahoo! right now. Not that working for Microsoft would be the end of the world, should it come to that, but motivation must be very low not knowing if you’ll have a job or be working on anything worthwhile in a couple months.
After a buddy went through this at CNet, I feel for ‘em.
Good for Yahoo, any deal with Microsoft is good for Yahoo. Unite your forces, you have to fight the Goliath who is getting bigger and dangerous day by day.
Who’s still interested in these “news”? We don’t need Microsoft and we don’t need Yahoo.
If Steve had made a less threatening approach and more of a conciliatory gesture - civilized talks may have continued….
You sometimes do not get as much when you bombard and threaten another giant
What is interesting in all of this is what will happen to the organic search results of Yahoo and MSN - which will be kept and which will be deleted.
Or will there be an integration of both algos
What will happen to ASK.com in all of this
substance–
posturing++
“the discussions are centered on “a transaction with Yahoo but not an acquisition of all of Yahoo.” That could mean a pooling of search assets to block Google,”
delusional++
um..
Steve Balmer has a huge head, that’s why he was so aggressive. He was salivating way to soon and thus allowed Google to sneak behind his back and ruin the original deal.
“Cheers to big egos!”
To me , It reminds of India-Pakistan peace talks. People from both countries will see the parallels here
I don’t know. I’m sick of it. I want to know the end and that’s it. For everyone’s best, Microhoo is the thumbs up. Get the deal done and let’s have some competition.
@21, He did the same thing with MySpace. He blew that one too.
The only deal he didn’t blow was to distribute SuSE Linux for Novell, and there he stabbed Novell in the back by saying it was a deal exclusive to them then pulling that clause out of the contract right before they signed(he knew they were desperate, just like when they sold DOS to IBM). He went right back to Red Hat and offered them the same deal. They ended up refusing, wisely.
Microsoft will never be the same without a software developer running the company. Ba11mer is an idiot, who doesn’t pretend not to be.
What I don’t get is why Yahoo elects all board members at the same time. And why don’t they have a poison pill? There are so many things they can do to protect themselves and increase their price.
This deal will happen, sooner or later.
I do not understand what part of Yahoo Microsoft would buy.
The only option really would be to either buy everything or nothing. A search deal with Google? and the rest going to Microsoft?
Either way Yang would no longer have Yahoo so there does not seem to be any reason for Yahoo to try to split itself into pieces.
Maybe we should stop worrying about this deal until something is done. Frankly it is not as if our opinion matter to the direction of the negotiations.
Techcrunch should really go back to covering the next big thing (Seesmic, Meebo, Twitter, Coghead, Scribd…….). These news about MSFT and YHOO can be found anywhere on the web. What we cannot find is one of those startups that may be game changing, but we may miss because two giants are playing a ping-pong game and worrying about users who are running away from both of them.
In the end nothing going to happen except the investors in Wallstreet will react to it temporarily and some individual will make money trading the stock of each company on short term.
Nat
http://www.workersinc.com
in addition to price alone, Y! probably had concerns around anti-trust issues, so they probably asked for a large breakup fee. guessing that M$FT didn’t offer one that was big enough.
the new deal will probably be structured to address Y!’s concerns, which may be why it looks like a deal for some subset of the company.
- agent mulder lives
There is a 23.4263% chance that a deal will occur between Microsoft and Yahoo that does not entail Microsoft acquiring all of Yahoo.
Sorry but I forgot to include this in my last prediction, even though I came up with it internally 2 months ago.
Breaking: Cuban to be next Yahoo CEO post Icahn Proxy fight!
that would be interesting.
Yahoo won’t be stupid enough to let MS acquire its revenue making core of Yahoo. If MS wants a marriage, it must take over everything.
@Mark Mahoney - you are incorrect. It is 23.4264 not 23.4263%. Don’t pollute TC with faulty non-facts. :).
Isn’t this deal over yet….:-/
hi guys ,
I am Peter and i need your help
more info at http://www.i-need-five-euros.blogspot.com
thanks
@35,
I am coining a new internet term right here, right now.
“Blog Squeegee” - Chris, Orjii LLC
http://images.google.com/images?q=squeegee
You sir are a blog squeegee.
[ rolls up window and turns the volume up, locks door ]
“We’re back in business on this deal”
I guess that Arrington’s shameless shilling of the stupid and unsolicited Micro$oft acquisition offer isn’t covert any more. Considering MS’s past practice of buying journalists I assume it isn’t surprising that they’ve stooped to purchase the opinion of a hack blogger as well.
Douchebaggery, as usual.
@24: Ballmer may be a big moron who is on the path of destroying Micro$oft with the horrible drawn out shit that is Vista, and by playing third fiddle to Google and Yahoo on every web property possible, yet Arrington loves him. That’s cause he pays him.
The depth of Microsoft’s desperation is breathtaking.
I predicted this. We saw it comming.
Hey Virginia White and other childish Microsoft haters - go over to ZDNet you will love it over there with all the other ignorant, immature and childish anti-Microsoft bloggers and posters!
Microsoft wasn’t just going to walk away from this. They want to make this deal happen. They’re just playing jujitsu.
Stock brokers are making millions from all this nonsense. Keep it on.
Perhaps the portion of Yahoo that won’t be included in the deal is the group of whiny employees. Nobody needs them anyways. They can go beg at the Googleplex’s doorstep once the deal goes through.
Perhaps Schmidt will throw them a bone. He still has the hot one he got from Microsoft when he was at Novell.
We have seen the same game in BEA-Oacle deal. So lets wait and see!!
In this slow economy, nobody has time to spend on these stupid war game.
Looking for a IT job? Visit http://www.leapways.com.
Rich
Icahn knew it, Steve knew it and Jerry Yang was dreaming about jumping in bed with GOOG. What a dream?
I am happy that the deal is back, lets see what happens this time. I hope Jerry doesnt play spoil sport again.
M$ will never get Yahoo!
If I were Yahoo I would sue them for $40B for lost business due to constant harassment.
Win Win for all the players
http://tinyurl.com/4uywpc
It seems that resistance is futile. Too many powerful people want the deal to happen. My vote as a stockholder is to leave Yahoo! independent.