Yahoo! Responds No, Remember PeopleSoft

February 11th, 2008

In the ongoing Microsoft semi-hostile bid for Yahoo!, word is that Yahoo!’s board has decided to reject Microsoft’s offer of $31 per share, believing that Yahoo! is worth no less than $40 a share. The “no” was rumored this past Saturday and a rejection letter was officially released today. Read Yahoo!s rejection letter at TechCrunch.

But even with this rejection, Microsoft can get as agressive as they want to. A good historical model might be the Oracle / Peoplesoft takeover from a few years ago. After threats of lawsuits, antitrust investigations, and the firing of its CEO - Oracle eventually prevailed with a higher bid, and Peoplesoft wasted a heck of a lot of time defending itself. This timeline of how Peoplesoft went down is a very interesting read as to what might be in store for Yahoo!.

Basically, this could get ugly fast. There are many shareholders now hoping Yahoo! will sell and would actually welcome Microsoft “going hostile” and even coming up with another board. Joe Duck predicts any delay of a Microsoft takeover could even lead to a shareholder class action lawsuit.

Although I still hope Google will come up with solution - I sadly believe Yahoo! will eventually cave to Microsoft. Now it’s just a matter of how painful it will be for Yahoo! employees.

Additional Reading: Fortune, Mathew Ingram, Google Watch

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  • As much as I hate to see this, I mean Yahoo was the first "search engine thingy" I used way back "in the day," I believe this is Yahoo's own doings.

    What happened to them? They use to have innovative products and services. In the last few years, it seems they've been content to just "follow the leader". Even MSN has come up with some cool stuff. The best Yahoo can do is buy other peoples stuff and make it worse!

    I think it will be good for the Internet for Yahoo to stay around. But they're going to have to get those creative juices flowing like they use too!
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