Yahoo takes it easy as IT world is jolted by Microsoft buyout bid

Yahoo takes it easy as IT world is jolted by Microsoft buyout bid

Melvin G. Calimag - Manila Bulletin

Shocked and stunned by a $ 44.6-billion buyout offer from software titan Microsoft, Internet giant Yahoo tried to compose itself the morning after the earth-shaking announcement by issuing a brief statement that didn’t reveal any hint of action it may take.


Microsoft, through chief executive officer Steven Ballmer, sent a letter dated January 31 (Friday in Manila) to the Yahoo board of directors indicating the company’s intention to acquire the Internet icon.

In a press statement released on February 1, Sunnyvale, California – based Yahoo acknowledged it has received the "unsolicited proposal" from the Redmond, Washington-based software firm.

Addressing the offer, it said: "The Company said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders."

The Microsoft offer was made after the departure of former Yahoo chair and CEO Terrry Semel, who previously led Yahoo in rejecting a similar takeover attempt in February last year.

In that rebuff, Semel told Ballmer that the Yahoo board was betting on the "potential upside" of a reformulated strategy that the company was about to implement at that time.

Ballmer, in his letter, retorted that the plan obviously didn’t work. "A year has gone by, and the competitive situation has not improved," he said.

This time, Microsoft said it is determined to finally close out the deal, even posing a veiled threat of a hostile takeover in case the Yahoo board would again turn down the offer.

"Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal," Ballmer said.

Immediately after the buyout offer was announced, major news organizations such as the New York Times played up the significance of the buyout bid, making it the banner story in its online edition and devoting a special section for it.

The Times said Microsoft’s $ 44.6-billion offer for Yahoo is easily the largest takeover bid in the software giant’s history. It could also be the world’s largest technology deal ever, it added.

America Online’s deal for Time Warner, announced in early 2000, had a much larger price tag of about $ 112 billion. But some data-keepers, including Dealogic, classify that transaction a media deal, the influential newspaper noted.