Yahoo CEO Tells Employees Company Will Fight Microsoft Takeover

Yahoo CEO and co-founder Jerry Yang emailed the company's 14,000 employees yesterday and assured them that Yahoo's executive staff was doing everything it could to avoid a takeover by Microsoft. Less than a week ago, Microsoft made a $44.6 billion hostile takeover bid for Yahoo, which has been struggling in recent years against Internet giant Google.

"Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape," Yang's email reads. "What's become clear in the past few days is how much people care about this company. I've heard from many of you, and from other friends and colleagues from around Silicon Valley and across the globe, that we need to do what's best for Yahoo and our shareholders."

Industry reaction to the proposed purchase has been mixed, though most feel it would be healthy for Google to have at least a single healthy competitor. Currently, the company dominates online in the most important markets, search and advertising. Google, somewhat transparently, is attempting to scuttle the deal or at least delay it.

Spurning the Microsoft offer might not be easy. The Microsoft bid represents a huge premium over Yahoo's stock price, one that most shareholders will be eager to accept. Yahoo will thus have to find another partner with the financial wherewithal to offer a superior deal. And there are precious few companies like that. The only obvious one, Google, would face even more intense antitrust scrutiny than will Microsoft, because Google is already dominant in this market. Such a deal would almost certainly never be approved by regulators.

Yang's email was largely a cheerleading session aimed at bolstering the spirits of employees, which the company calls "yahoos." "We have a lot to be excited about and there's more good news to come," he wrote. "I want to make sure you all realize how essential you are to Yahoo's success." Well maybe not all of them: Yahoo announced it would lay off 1000 employees a week ago.

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THe employees are chearing, yet 1 of every 14 of them will see their job gone soon. Google will go against anything Microsoft does. It's CEO, Eric Schmidt, was head of Sun and Novell (separately of course) and ended up on the losing side (if you can call it that) in legal skirmishes with Microsoft. Google needs healthy competition. Microsoft or Yahoo alone can't stop them.

ebraiter@videotron.ca February 07, 2008 (Article Rating:

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Mr Yang, as Don Corleone said "it's just business". More that one company has been crippled and even killed because of sentimental rather than sound business decisions. Microsoft and Yahoo combined might just be the synergy needed to spur on further competition in the Web World. Otherwise, bye bye Yahoo!

rkann February 07, 2008 (Article Rating:

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I don't understand the egos here. One would think the Yahoo founders would welcome an opportunity to cash out... Plus MSFT is a very progressive employer. It is one of the nicest places I've seen and they treat their people amazingly well compared to almost every other firm (including Yahoo). Plus they do one very important thing Yahoo can't... They print money.

Microsoft might be a huge corporation, but they really act like a group of smaller companies. Every division has tremendous autonomy to do what they want, senior staff may push a direction (depending on the importance of the division in the overall strategic plan), but that's usually the extent of their involvement. Yahoo should welcome this and not feel threatened. They would still get to be Yahoo, and have Microsoft's financial resources at their disposal to expand.

I have a feeling the Yahoo faithful are going to lose out. Individual shareholders and institutional investors are cheering for this deal.

Christopher February 07, 2008 (Article Rating:

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"One would think the Yahoo founders would welcome an opportunity to cash out"

That's rational thinking, but when you get to be at the top of a company as big as Yahoo or some of the others, it's not really about money anymore, cash is just thought of as a 'score' more or less.

Companies as big as Yahoo don't get eaten up every day, so the people at the top feel a bit like losers for letting it happen on their watch.

will84 February 07, 2008 (Article Rating:

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"Microsoft and Yahoo combined might just be the synergy needed to spur on further competition in the Web World."

I think I just threw up in my mouth a little when I read that.

lotsamystuff February 08, 2008 (Article Rating:

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rkann - You will have to forgive "lotsamystuff". He is one of the village idiots around here. His goal in life is to convert the masses to non-MS technology. To be fair...his nemisis, Waethorn, is here to defend MS to the death. It is an epic battle that has continued through the ages and has entertained and angered thousands (OK, maybe more like 8 or 10 of us). You will laugh...you will cry...but mostly, you will laugh. In the past many have joined the battle on both sides. The battle rages on. Stay tuned daily, same Paul Channel; same Paul Time.

--tayme

tayme February 08, 2008 (Article Rating:

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"His goal in life is to convert the masses to non-MS technology.

That might be funny if it were true (which it's not...I'm not only a "MS technology" user, but in many cases, a fan). I'm just anti-stupidity, which makes Waethorn (and his peanut gallery) sound like nails on a chalkboard.

lotsamystuff February 08, 2008 (Article Rating:

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@lotsa:

"anti-stupidity"??!?

lol

c'mon Mr. Diction, is that the best you can do???

XP

Waethorn February 08, 2008 (Article Rating:

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