Thanks to Metroknow for this link to a study about online activity including kids. Symantec, maker of Norton Security, did the study and here are some highlights from the study of kids activity:
Online Activity Study
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YaFoxHoo? Now that makes some sense…
The rumors of a potential offer from News Corp for Yahoo are interesting and CNBC claims they’ll have some new news from news corp in a few minutes, though I’ll be surprised if this is more than rehasing the rumors swirling around that appear more as linkbait for blogs than substantial information.
CNBC is referencing Jessica Vascellaro’s story at WSJ:
The deal would allow Yahoo to remain independent while giving News Corp. substantial control over a huge array of Internet properties and advertising opportunities.
News Corp, already a key internet player because they own Myspace and many Fox properties that have huge online visitation, could leverage the Yahoo aquisition to some advantage, perhaps through monetization optimizing, cross promotion, and such. However I would not want to try to make the case to Murdoch that Yahoo is worth *more* than MS already generous offer. As employees run for the door and the board is more interested in fighting than switching, I’m not clear Yahoo should be playing hard to get right now with anybody.
Disclosure: Long on Yahoo
The Price of Danger: $500,000,000
Microsoft just picked up Danger, inventor of the Sidekick mobile device and overall very clever mobile company founded by Andy Rubin who is now working for Google on Android and Open Handset Alliance stuff.
Om Malik is quoting the price as 500MM after what his reasearch showed was 225MM in past injections of capital.
Although at first glance everybody thinks these deals make huge money for everybody associated with them, this is not the case. As we’ve noted before average VC deals *lose money*, and more importantly you always need to factor time into these equations to make sense of the profitability of a deal.
In this Danger sale people made out well, but depending on when the big money was invested it’s not clear anybody had a spectacular return here unless the big money came in very recently (I don’t know if it did or not).
Why would MS want this company? As with the Yahoo aquistion and as MS has done for so long, they are trying to gain a huge foothold in key markets by buying up a key company in the space. I’m expecting some competition for the Google/Dell phone to be announced soon.
Yahoo Executives – kudos for true believing, but sell the place anyway!
A lot of folks have been very hard on the Yahoo board and Jerry Yang in particular for fighting the Microsoft takeover bid, but it should be noted that almost more than anybody these folks are playing with their own money, and the stakes are huge.
As Fortune reports Jerry Yang’s got more than a few Yahoo shares, and this he’s effectively “gambling” with his own money as he powerfully resists the fat Microsoft offer. If Yahoo stock tanks – as it certainly will if Microsoft backs out – I won’t be all that much worse for the wear but Jerry would be taking something like a *half billion* hit to his net worth. That’s real money, and you’ve got to admire Jerry and the board for believing so strongly in their “new” vision for the company that they are willing to bet they can regain their former glory.
Of course, maybe they *can* regain their former glory, but that’s a bird in the wild and wooly internet bush and Microsoft’s offer is *billions of birds* in the greedy little hands of investors. This is not a tech issue – billions of Microsoft birds in hands are better than a few Yahoo birds in the bushes.
Disclosure: I have some YHOO, though fewer than Jerry Yang.
Yahoo + Microsoft? Heck yes says Legg Mason, with 6% of Yahoo
Larry Dignan is reporting that major Yahoo Shareholder Legg Mason is insisting that Yahoo make a Microsoft deal, though they hope and may expect MS to up the offer past 31 and up to 40, which Fund manager Miller stated appears to have been MS’s highest previous offer over the past year of flirting with Yahoo about a merger.
Miller says about Legg Mason’s position:
We think this deal is a strategic imperative for MSFT, and that YHOO is in a tough spot if it wishes to remain independent.
Strategic imperative or not, Yahoo can’t expect investors to sit back and wait for something to happen when this much money is on the table. In fact I think investors are already upset that Yahoo is basically suggesting this is their course of action – waiting for prosperity to fall upon them but not in the form of Microsoft.
I should say that given the market’s horrible reaction to the aquisition I’m not at all clear this is good for *Microsoft*. If they screw up managing Yahoo and/or Yahoo can’t revived it’s sagging profitability fast this could go down as a Time Warner AOL fiasco kind of move for Microsoft. However, if they want Yahoo I think Microsoft’s strategy from this point on can be very simple:
1. Offer $34 per share publicly and loudly.
2. Call Legg Mason and other big holders, and tell them this is *OFF* if Yahoo keeps waffling.
3. Bring in fat lady to sing …. it’s over.
Disclosed: Long on Yahoo.
Hostilities erupt between Yahoo and Microsoft
Hey, looks like now it’s an official *hostile takeover* attempt from Microsoft in the battle for the internet giant Yahoo.
Yahoo declined Microsoft’s offer of last week and in this press release Microsoft basically declares their intention to duke it out. I’m surprised they have not upped the ante yet, but perhaps they are waiting for more drama and information before making a “final” offer to the Yahoo board before taking this directly to Yahoo shareholders. Although I think most shareholders would take the MS offer it’s clear the *big* shareholders like Jerry Yang don’t want to, so perhaps Yahoo can win a proxy battle for the company. I have a hunch however that the institutional investors, and the legions of small time folks like me, would jump at a 34+ offer and probably even take the current one unless Yahoo shows a lot more signs of life than screaming out the current rallying cry “We are fighting Microsoft!”
Microsoft PE=16, forward PE=13!
Wow. As Yahoo rebuffs them and Microsoft shares continue to take a beating from what appears to be Yahoo aquisition unhappiness, the PE of this mega company is looking nothing short of spectacular. Some would argue that Microsoft is slowly dying due to the massive changes in the way people and businesses use software, but it’s foolish to think Microsoft’s prospects are dim under the current conditions. In my view they are simply making too much money, and remain a key player in a key industry, to deserve this low market valuation.
If the Yahoo merger happens the PE at MSFT will take a hit, but it would clearly remain well under 20, a very modest PE for a company that still has significant growth potential.
But, I guess like other investors I’m a herd animal and fearful, so I won’t be buying MSFT….quite yet.
Disclosure: Long on Yahoo, no Microsoft position.
YaAOLhoo? Are you kidding?
The Times of London is, I think, exaggerating a rumor that Yahoo and AOL might merge in an effort to find off the Microsoft takeover of Yahoo. I don’t even think this is necessarily a bad idea if you made sure the management of both companies had the necessary shakeups to turn *both* companies around from what seem like desparate corporate positions. However it just doesn’t ring likely to me at all, and begs the question of how the Yahoo board could make all this work *and* avoid the wrath of the market which probably will view the Microsoft offer as far more favorable than a pie in the sky possible AOL deal. That said, I’m open to this possibility. The main thing I’m *against* is more of the same from Yahoo. Profits and share price matter more than any anti-Microsoft sensibilities, and the board should keep that top of mind at all times.
Disclosure: Long on Yahoo
Wal-Mart for Nobel Peace Prize!
Wow, this clever article by John Tierny in New York Times Op-Ed (what a great news source now that the paywall is down!) suggests maybe the Nobel Peace Prize should go to Wal-Mart for lifting more people out of poverty than pretty much any other organization on earth. He notes a notion that the best route out of poverty for the developing world is to make stuff for Wal-Mart to sell to … those of us who live in the developed world.
This is a provocative piece but it cleverly *should* get people to realize the complexity of economics, and the fallacy of ideas that prosperity in the developed world comes from exploitation in the developing world. This last notion is one of my pet peeves because it is a very naive and inaccurate view of the way international economics works. Systems that avoid capitalism and avoid interacting with capitalism don’t thrive. In fact they perform abysmally as indicated by the experiences of early communism, and present conditions in North Korean and Cuba. Prosperity comes from becoming part of the developing world through economic interactions. This is not the whole solution to poverty, but it is an important part of that solution. If well intentioned people would work to understand the importance of getting poor folks *involved* with the globalized economic experience it would be easier to bring the billion+ in extreme poverty to a higher standard of living. It does NOT end there of course. I’m happy to see organizations try to force corporations to greater levels of worker responsibilities. But that needs to happen *after* workers and countries show that they want to play the big game.
As Tierney suggests, making stuff for Wal-Mart is probably one of the fastest ways an Indian or Chinese guy can feed their family. What’s wrong with that? (I’m serious – there are some problems with that approach, but I’ve gone on long enough here for now ….)
Microsoft v. Yahoo. They can’t seem to make an offer Yahoo can’t refuse.
The big tech story remains the Microsoft offer to buy Yahoo, and on Wednesday a meeting at the Yahoo’s HQ in Sunnyvale, CA may seal the deal, though it’s more likely that negotiations will continue for some time after that meeting.
Microsoft may be wondering about the wisdom of the aquisition given how hard the market appears to have punished them for the offer. Although other tech stocks were down last week, Microsoft’s 13% drop amounted to a loss in capitalization equal to almost the entire value of the Yahoo deal. ie you could argue that even if Yahoo sold themselves to Microsoft for $1 on Wednesday, the boost in the merged company value would not make the two any more valuable than *Microsoft along* was worth before all this began. That’s a lot of financial simplification but Microsoft must have at least somewhat more skepticism about all this than they did as they made this offer.
So, what are the likely strategies here? It is clear Yahoo will reject the current Microsoft Offer which amounts to about $30 per share, and they are strongly rumored to be asking Microsoft for $40 per share. I’ll eat my keyboard if Microsoft agrees to $40, but I do think they may immediately counter offer at about $34 per share. Of course unless the inclinations of the Yahoo board change they’ll reject this as well. I’m growing somewhat suspicous that the unreasonable $40 amount is not really an attempt to boost the sales price – it may be the best way for the Yahoo board to send negative signals, try to wait things out, and give Microsoft more chances to back out. If Microsoft gets cold feet from the share price drops or Yahoo’s chilly reception of the merger idea, and then backs out of the deal, shareholder lawsuits against the Yahoo board are less likely and weaker. The Yahoo board will simply say the $40 was a negotiating tactic that went wrong rather than a tactic to kill a good deal.
However I don’t think Microsoft is going to go softly into the night on this, and that will make all this very interesting. They’ll offer more, and at even $34 per share Yahoo would be getting an amount approaching a 100% premium over their recent 52 week low of about $18 per share. This is the price YHOO traded at following the bad guidance from the recent earnings call.
It strains the credulity of this shareholder to see how the Yahoo board can argue that Yahoo has a realistic shot at being “twice as valuable” as they were last week in a reasonable time frame. In short, we all know they can’t. This may be a defect of market forces or employee attrition or lazy management or low morale or Google defections or whatever, but left to her own devices Yahoo is pretty much going nowhere fast. I’ve been bullish on Yahoo for several years now and remain convinced that the company can eventually turn things around. However I think this aquisition may be 1) part of that turnaround process and 2) presents an offer far too good to refuse without risking a share price meltdown.
So, looks to me that on Wednesday the Yahoo board will turn down the current offer, Microsoft will up the offer to about $34, and Yahoo board will turn that down too (probably the following week). This will lead to nothing short of a Yahoo shareholder revolt as anxious investors watch a company throw away tens of billions of birds in the hand arguing they are seeking a few more birds in the internet bush.
Ha – even Mini Microsoft hates the deal. An interesting salary debate over there along with the normal absurd whining from developers over their already very large salaries.
Disclosure: Long on Yahoo (but not for long!?)
Joe Duck 