Media critic Jeff Jarvis pleads Google Inc.'s (GOOG) case after the U.S. Department of Justice hired an outside attorney to examine the search company's advertising alliance with Yahoo! Inc. (YHOO]. Google's no monopoly, he says. So to what does Jarvis attribute the feds looking into the ad deal? Americans hate success. "It's the yin-yang of American business: we love success stories but we hate too much success," he says.
This is false on many levels. First, and apologies in advance for belaboring the obvious, but investigating big mergers and, in this case, contracts for their potential effect on competition is what antitrust enforcers do.
Or at least they're supposed to. The Justice department that Jarvis implicitly chides for presuming to scrutinize the Google-Yahoo! deal is one of the laxest antitrust regimes in recent history. The last time this DOJ challenged a commercial arrangement like this one on competition grounds was, well, never (That's right, they haven't opposed a single one.) And it's hardly any more aggressive in policing mergers. Under Assistant Attorney General for Antitrust Thomas Barnett, the agency has yet to challenge a merger, although it did retroactively move to block a small newspaper deal in West Virginia. Even the DOJ's antitrust brethren at the Federal Trade Commission are getting exasperated, firing off a statement on Tuesday attacking Justice for weakening antitrust law.
Sheldon suggested the other day that Microsoft Corp. (NASDAQ: MSFT) should split off its web search and services arm so that it could fit better with a possible Yahoo, Inc. (NASDAQ: YHOO) combination. Instead of entertaining that notion, Microsoft still has some cash to spend to ensure, for now at least, it still has a growing presence in the web search and e-commerce arena.
To that end, the company announced this morning that it will spend $486 million to purchaseGreenfield Online, Inc. (NASDAQ: SRVY) as it swiped an earlier takeover offer from the Quadrangle Group with its $15.50 per share offer. Microsoft's offer of $17.50 per share is a 10% premium over Greenfield's closing price this past Monday, when the offer was received without Greenfield knowing the origin. That is, until today.
Microsoft wants control of www.ciao.com, one of Europe's leading price comparison shopping search engines. Does Microsoft really think owning a leading consumer review and price shopping search engine will bolster its Microsoft Live platform? Since it couldn't compete in the U.S. against Google, Inc. (NASDAQ: GOOG), perhaps Microsoft is turning to international purchases as a second competitive act. Greenfield also has an "internet survey solutions" division that Microsoft will sell to an undisclosed buyer.
Yahoo! Inc. shares are steadily falling to around their 52-week low. And with the U.S. economy wobbling, the company's woes are unlikely to end anytime soon. Meanwhile, while the company's shrinking market value makes it more vulnerable to an acquisition, it's hard to come up with a buyer that would be interested. Microsoft Corp. has shown no inclination to revisit its bid for Yahoo!, though it has the luxury of time on its side.
The latest search data from comScore Inc. shows Yahoo! losing ground to Google Inc. Yahoo! had a 20.5% share of the market in July, versus 20.9% in June, while Google's share increased to 61.9%, from 61.5%. Microsoft is a distant third with an 8.9% share, down from 9.2% in June.
But not all the news is bad. Technology research firm IDC on Thursday said that, despite the faltering economy, online advertising spending rose by 20.1% in the second quarter to roughly $7 billion, from $5.84 billion in the second quarter of 2007. Online advertising will grow 22% in the third quarter, to $7.7 billion, IDC further predicts.
Yahoo! Inc. (NASDAQ: YHOO) is poised to announce the final two candidates for its board of directors by Friday, filling out its 11-member board with two people from investor Carl Icahn's slate of candidates. But in this day and age when we know virtually everything that's going to happen before it actually happens, The Wall Street Journal is reporting that Frank Biondi and John Chapple will be named to the board.
Kara Swisher of All Things Digital (part of the Journal's digital network), however, offers up Biondi and Edward Meyer as most likely to be named to the board, though she did also mention Chapple as a possibility. They would join Icahn, who received a seat as part of the settlement of his proxy fight with the company last month.
Regardless of who gets named, it remains to be seen how effective the new members will be and whether they will be able to bring Microsoft Corp. (NASDAQ: MSFT) back to the table for another go-round. Icahn could also look to force out Yahoo! CEO Jerry Yang or board chairman Roy Bostock if the company is unsuccessful in turning things around in the next few quarters.
It probably didn't put too much of a dent in his bank account, but billionaire investor T. Boone Pickens sold his 10 million share stake in Yahoo! Inc. (NASDAQ: YHOO) at a loss after the company was unable to come to terms with Microsoft Corp. (NASDAQ: MSFT) on an acquisition.
Pickens ripped Yahoo! during a meeting with the San Francisco Chronicle's editorial board, calling the company's management "pathetic."
Though we also believe Yahoo! did a disservice to its shareholders throughout the process with Microsoft, we have a hard time feeling sorry for Pickens in this one. He admits to blindly following activist investor Carl Icahn's lead on the investment and apparently felt it was a way to make a quick buck on what he believed to be an imminent acquisition. We can only wish we had his problems.
The potential for fireworks has been all but snuffed out of Yahoo! Inc.'s (NASDAQ: YHOO) shareholder meeting now that the company and Carl Icahn have declared at least a temporary truce. But that doesn't mean Friday's meeting will be a two-minute affair. The New York Post is reporting that the company's largest shareholder, Capital Research and Management, is considering withholding votes for both Yahoo! CEO Jerry Yang and chairman Roy Bostock (the Post also is reporting that Tom Hanks has a gun-toting security guard on his property in Idaho and also has this cool picture of "Malcolm in the Middle"'s Frankie Muniz).
As the paper rightly points out, the move would be largely symbolic since shareholders won't actually be allowed to vote out any of the company-nominated candidates. It also wouldn't even be sending much of a message of investor dissatisfaction to Yang and Bostock since we're fairly sure shareholders already have been quite clear about their unhappiness with management and its handling of the Microsoft Corp. (NASDAQ: MSFT) debacle.
One thing that hasn't been determined yet is which of Icahn's nominees will get seats on Yahoo!'s board of directors. As part of his settlement with Yahoo!, Icahn was given three seats on the board. Icahn gets one of those seats, and it is widely expected that former AOL exec Jonathan Miller will get another since his name was added to Icahn's slate at the time of the settlement. All Things Digital's Kara Swisher goes through the list and choosesJohn Chapple, a former exec at Nextel Partners, as perhaps the best fit since he would bring his experiences in the mobile sector to Yahoo!
Just months after closing a $19.6 million Series E round led by Hillman Co., joined by Adams Capital Management, Focus Ventures, Venrock Associates, Intel Capital, Jafco Ventures and Palomar Ventures, data warehousing appliance startup DATAllegro Inc. announced today that it will sell out to Microsoft Corp. (NASDAQ: MSFT) for an undisclosed amount.
DATAllegro had raised a total of more than $63 million since its formation in 2003 to develop a product that combines low-cost storage technology with proprietary software for clustered computing power to help companies boost business analytics capabilities.
Microsoft will integrate DATAllegro's products with its Microsoft SQL Server 2008 product for business intelligence and data warehousing, and the addition of the company will enhance SQL Server's position in the highest end of the market. DATAllegro's appliances are aimed at large-volume data warehouses containing hundreds of terabytes built on commodity hardware, which will make it easy to integrate with SQL Server, according to the company. Microsoft expacts to retain most of DATAllegro's team at its headquarters in Aliso Viejo, Calif. Continue reading at TechConfidential.com.
Because Microsoft Corp. (NASDAQ: MSFT) and Yahoo! Inc. (NASDAQ: YHOO) apparently prefer to do much of their heavy squabbling over the weekend, there's little noise emanating from Silicon Valley or Redmond, Wash., Tuesday morning, though an activist investor in New York may still be seething after his attempts to broker some kind of deal between the two companies went up in smoke.
Citigroup Inc. analyst Mark Mahaney (pictured) is weighing in on the fallout from the latest developments, astutely concluding Microsoft may not want to focus just on Yahoo!'s search business assets, but also its display advertising business, and acquire the entire company. Though he is skeptical of Yahoo!'s argument that a search-only deal would undermine the synergies between its search and display businesses, he points out that the online display advertising market, which was a $7.2 billion business in 2007, is set to grow 15% in 2008, and Yahoo! has a 27% share of it.
After running the numbers from Microsoft's latest proposal to acquire Yahoo!'s search business, Mahaney argues the cash flows to Yahoo! "don't seem overwhelming," especially when considering the strategic value of the business to Microsoft in its quest to better compete with Google Inc. (NASDAQ: GOOG).
Yahoo! Inc. (NASDAQ: YHOO) was quick to shoot down unsubstantiated rumors that CEO Jerry Yang was stepping down on Wednesday. It wasn't the first time such reports have cropped up, and it probably won't be the last.
While we'll take Yahoo!'s word, for now, that Yang has no intention of resigning, it's certainly not out of the realm of possibility that the company's co-founder could choose to abandon his post. Within the next couple of weeks, Yahoo! should have a pretty good idea how it's doing in its proxy fight with activist investor Carl Icahn. If the internet company is in real jeopardy of losing, Yang could decide to fall on his browser in hopes of allaying shareholder anger at the company over the derailed deal talks with Microsoft Corp. (NASDAQ: MSFT) and taking some of the sting out of Icahn's campaign. Also, taking Yang out the equation would send a message that Yahoo! is serious about at least entertaining a deal, since he's been perceived as a major obstacle to a transaction.
To that end, All Things Digital's Kara Swisher is reporting that Icahn is trying to enlist former AOL head Jon Miller or Fox Interactive Media executive Ross Levinsohn, both partners at venture firm Velocity Interactive Group, to take the CEO post at Yahoo!
August 1 is still weeks away, but Yahoo! Inc. (NASDAQ: YHOO) is kicking off a full-court press as it faces off with Carl Icahn (and sidekick Microsoft Corp. (NASDAQ: MSFT) over control of the internet company's board of directors.
Yahoo! CEO Jerry Yang toldThe Wall Street Journal he believes Microsoft is trying to destabilize his company, but has no real desire to acquire the company. Yang's belief is certainly a plausible explanation for why Microsoft earlier this week said it would be willing to discuss an acquisition of Yahoo!'s search business or, alternatively, the whole company, but only if a new board of directors was elected. While some who have watched the saga believe Microsoft may have crossed a line and is now out to destroy and humiliate Yahoo!, can Microsoft really be blamed for its actions when Yahoo! did everything it could short of a scorched earth policy to avoid making a deal? And now we're supposed to believe Yahoo! has "prostrated themselves" before Microsoft to get a merger done? Please.
Elsewhere, Legg Mason Capital Management''s Bill Miller told Reuters that Icahn would have more support in his proxy fight if he pledged not to sell the company for less than $33 a share, or $47.5 billion, Microsoft's last offer. Legg Mason owns slightly more than 5% of Yahoo! Continue reading at TechConfidential.com.
In an open letter to his fellow long-suffering Yahoo shareholders, billionaire Carl Icahn disclosed that he has spoken "frequently" with Microsoft CEO Steve Ballmer; "frequently" over the past week about Yahoo. Ballmer indicated to Icahn that the world's largest software company would still be interested in doing a deal ... with one catch.
"Steve made it abundantly clear that, due to his experiences with Yahoo! during the past several months, he cannot negotiate any transaction with the current board," Icahn said. "If a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company. He stated that Microsoft would be willing to enter into discussion immediately if the new board that has been nominated were elected."
In a separate press release, Microsoft underscored Icahn's statement, adding that despite speaking with Yahoo!'s board since last year, the company decided that it cannot reach an agreement with the current board. Can you say trial balloon?
Microsoft Corp. (NASDAQ: MSFT) may try to buy Yahoo! Inc. (NASDAQ: YHOO) again, but it does not want the whole company. It finds the search business useful as part of its battle with Google (NASDAQ: GOOG). The content portal business does not have much attraction, and Redmond wants a company like Time Warner (NYSE: TWX) to pick up that piece. According toThe Wall Street Journal, Microsoft "approached other media companies in recent days about joining it in a deal that would effectively lead to Yahoo's breakup."
The new deal just might work. Yahoo! dropped below $20 yesterday, putting its stock back where it traded before the first buy-out offer. The No. 2 search company's shares reached as high as $33. Investors, especially Carl Icahn, are steamed that Yahoo! did not grab all of that extra money.
Even if Microsoft cannot find a partner to take the Yahoo! content business, it may move ahead. It only has 10% of the US search business. Yahoo! has about 20% and Google around 60%.
Microsoft still needs Yahoo!, and with its stock down by a third, Yahoo! needs a buyer.
Douglas A. McIntyre is an editor at 247wallst.com.
Yahoo! Inc. (NASDAQ: YHOO) shares fell below the $20 mark in early trading on Tuesday and are approaching the stock's closing price of $19.18 reached on Jan. 31. That's the session before Microsoft Corp. (NASDAQ: MSFT) publicly came out with its $31 a share, $44.6 billion offer to acquire Yahoo! in a saga that is now in its sixth month.
The $20 threshold is significant, if mostly psychologically. Many analysts expected Yahoo! shares to find support ahead of that level on speculation that such a price makes the company vulnerable to another acquisition offer from a strategic or financial buyer. Yahoo! was in an "anyone-but-Microsoft" mode after the original offer and reportedly had talks with the likes of News Corp. (NYSE: NWS) and Time-Warner Inc. (NYSE: TWX), whcih could be interested in some kind of deal now that Yahoo! is cheaper. Indeed, there's talk Yahoo! may already be looking to revive talks with Time Warner-owned AOL L about combining the operations.
It didn't have to be this way. Had Yahoo! negotiated with Microsoft rather than fighting a deal at all costs, shareholders wouldn't be looking at a stock that is now 40% below Microsoft's reported last offer of $33 a share.
Yahoo! Inc. (NASDAQ: YHOO) shares were roughly flat in early trading on Wednesday after gaining 3% on Tuesday on word that the company was again talking deal with Microsoft Corp. (NASDAQ: MSFT). Though shares spiked on reports that talks were in progress, they settled down quickly because of conflicting reports as to the extent of the talks. While technology blog TechCrunch reported the two sides were in discussions on an outright acquisition of Yahoo!, other reports indicated the two had revived discussions of an acquisition of Yahoo!'s search business.
A source close to Yahoo! late Tuesday said the TechCrunch report was "miles off," but could not confirm the two companies were again talking about a deal for the search business. The source did note that when Yahoo! announced it would be outsourcing a portion of its search advertising business to rival Google Inc. (NASDAQ: GOOG), the terms did not preclude Yahoo! from selling all or part of its business.
Put this in your "death by 1,000 cuts" file. Reports resurfaced today that Yahoo! Inc. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) have resumed talks over a possible deal. It's worth noting that the chatter is coming from a Yahoo! investor, who obviously may have a vested interest in the companies eventually clinching a transaction. But the rumors had enough teeth to drive Yahoo! shares up as high as $23.71, with the stock up 2.2%, to $21.92 in late afternoon trading.
Since the companies formally ended acquisition talks earlier this month, Microsoft has said repeatedly that it's no longer interested in acquiring all of Yahoo!. But with Yahoo! shares sagging, the software giant may think it can get the Internet portal on the cheap or at least for less than its last bid of $33 a share, or $47.5 billion offer. Other reports indicate the two sides could be reviving talks in which Microsoft would acquire Yahoo!'s search business for more than the $9 billion it was reportedly willing to pay previously.
Yahoo!'s situation has eroded since the talks ended. An announced deal to outsource some of its search advertising business to rival Google Inc. (NASDAQ: GOOG) provided only a modest lift to its shares. The company also has seen a number of high-profile executives leave over the past few weeks, and concerns are mounting about its second-quarter numbers. Oh, and Carl Icahn is still around, though he hasn't had much to say about his proxy fight for control of the company's board of directors of late.
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Media critic Jeff Jarvis pleads Google Inc.'s (GOOG) case after the U.S. Department of Justice hired an outside attorney to examine the search company's advertising alliance with Yahoo! Inc. (YHOO]. Google's no monopoly, he says. So to what does Jarvis attribute the feds looking into the ad deal? Americans hate success. "It's the yin-yang of American business: we love success stories but we hate too much success," he says.
The 
