02/15/2008, 6:05pm, EST
Friday, February 15thYahoo board torn over proposed MS takeover
Yahoo's board of directors is torn between those seeking profit and others who would make an emotional decision to reject Microsoft's buyout attempt, according to sources cited by a report from the New York Post online. Yahoo chief Jerry Yang and several followers are allegedly seeking an alternative to Microsoft's takeover bid of $44.6 million, and could act out of emotion rather than their fiduciary duty to the company's shareholders. "The emotional part of Yang would rather do anything but sell to Microsoft, but he doesn't have the cards to come up with a value-creating, competitive alternative for shareholders," said one source.
"While Yahoo's board has a fiduciary duty to maximize shareholder returns, running the risk of derailing a deal is dangerous to Yahoo shareholders," explained Jefferies analyst Youssef Squali. "We believe Yahoo would have to show substantial re-acceleration in revenue growth and margin expansion for the stock to be back substantially above $30 - something that requires a leap of faith today - if it were to stay independent."
The report cites another source who says Yahoo board members Eric Hippeau of Softbank and Activision chief Robert Kotick are aligned with Yang.
"They're just as emotional as Jerry and as biased against selling to Microsoft as he is," the source said, referring to Hippeau and Kotick.
Yang issued a letter to shareholders on Wednesday this week, claiming that Microsoft's bid significantly undervalues Yahoo.
Filed under: industry
Other story tags: Microsoft, Yahoo, business, Jerry Yang, shareholders
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What's ridiculous is your apparently complete grasp of the public corporation market.
MS's bid has already added value to the company ($10 a share, more or less).
And what else are stockholders and the board in the business for if not to maximize their profit? Do you actually think investors put money in a company because they believe it inspires greatness and they want to see the company flourish for 200 years? No, seriously, do you?
BTW, it is amazing that there's so much concern over a corporate entity that has allied itself so much with China to basically turn over dissedents to the gov't for enslavement, torture, and who knows what else, all because the company want to do business there.
At least MS has never done that.
As I said, no major Yahoo shareholders or board members can possibly believe Microsoft can help Yahoo to grow.
WHAT? Did Microsoft come back and chop off $44.5 Billion on the value of Yahoo! as they might think they could get away with undervaluing the company that much?
Are you all just stupid or what?
Oh, as an MS shareholder, I think it is a terrible waste of time and money. They would be better off using the $40B and hiring all of the software engineers in the US and putting out a better product.
They already have a tremendous amount more of talent then they need including some of the smartest people in the world and they still can't get it to work. They have the resources - human and otherwise - the problem is their management and architectural decisions. People don't seem to be able to grasp that a non-profit group outdoing the largest software corporation in the world means that Microsoft really does a shoddy job, is a complete failure, and if they sold a product in any other industry with the quality of their software, they would be recalled.