Do Jerry and Company Understand the Art of Negotiation?
by
on July 13, 2008,
Anyone else tired of "breaking" Yahoo/Microsoft news? The New York Times is reporting that Yahoo has issued yet another infamous statement rejecting another offer from Steve Ballmer and his new best friend Carl Icahn. As usual, Yahoo held an emergency board meeting, "evaluated" the offer, and issued a statement to the media.
Don't they teach Negotiations 101 in business school anymore?
Even the youngest child knows that when you get an offer you don't like, you offer something else in response. It's called bargaining, and most people manage to do it without using the media to communicate. Yahoo knows they aren't going to see the $33 per share offer that Microsoft offered originally. They've ended up where they are now because they've overestimated their worth every step of the way, and are trashing the stock in the process. The only bumps they've seen in their stock price have been due to repeated rumors that Microsoft was coming back to the table.
There is a back-and-forth art to negotiating that seems lost on these two companies, who see much more fond of talking to the press than they do at actually doing any sort of real business. While there are some predicting that a deal will finally be reached by the end of summer, watching this just looks like two aging fighters locked in the ring. Both are getting so tired they can barely throw punches anymore, yet there's no one stepping in to declare a winner.
If you enjoyed this post, make sure you subscribe to profy RSS feed!
major
raj
CopyrightLawSucks 
kwarren84 
Michael Fidler 
Jaime A. Restrepo 
Yolanda
Yahoo continues to be a success story, they don’t need to be acquired by anyone
whether yahoo is a success story or not, and what Paul, the board or Jerry believe they need is besides the point. Yahoo is not a private company, it does not BELONG TO THEM, although they treat it as such. Their fiduciary duty to the shareholders, is being abused…this has gone beyond the individual issue of microsoft versus yahoo, and become an issue of shareholders rights and the systemic threat of corporate managers “chosing” pride, ego or whatever fancies them, over the actual owners-sharholders. This horse left the barn the day they IPO’d. Had they not done that, they could burn the buildings down and make the applications open source if they wanted!
The arrogance of the management involved have successful boosted the shares of yahoo and within a short period after that successfully plunged the shares of Yahoo to lows. Regardless of what anyone says, the rise in the share of Yahoo is not related to anything done by Yahoo management. The fall in the shares represents the level of confidence Yahoo shareholders have in Yahoo Management. Its time for Yahoo management to go. They are not performing, they are not demonstrating good leadership, and they are making the company worse. Yahoo management can only win this fight if they fix Yahoo and that is far from demonstrated. They seem to be to stupid to recognize that they have already lost. They have stockholders breathing down their neck and they dont have a winning strategy and tactical plan to renew Yahoo. I hope that Ichan and Microsoft take over Yahoo and they spilt the company into so many pieces that everything the current Board of Directors has built is totally destroyed. If they are afforded a next time in business, they will learn (Like Steve Jobs had to learn) what is their role and value proposition. It certainly is not to be stubborn morons.
Microsoft and Yahoo are definitely wearing out their welcome in the news, or at least I say that each time I am forced to mention them. You'd think they'd have sorted it out by now, I mean, look how many times they've appeared here in recent weeks:
http://profy.com/2008/06/24/microhooredux/
http://profy.com/2008/06/18/yahoobleedout/
http://profy.com/2008/05/18/clintonyahoo/
I just can’t understand the logic of some dumb investors buying the stock of yahoo on the expectation that it will be bought by Microsoft for a premium and then trashing the management when the deal is rejected by Yahoo. Did anybody force them to buy Yahoo shares? Do they really believe that Icahn has interests of Yahoo in mind? He bought 5% of yahoo shares based on some insider information and is now trying to force yahoo to sell to make sure that he does not loose money. If this deal goes through there is no stopping rich investors like Icahn from buying the shares of smaller companies and forcing them to sell to bigger companies. The bigger companies can then swallow smaller companies with the help of their investor friends and then we will end up with big monopolies. Isn’t microsoft big enough already?
Yahoo is a better company then Microsoft in the online search and advertising. Microsoft should be willing to pay a premium if it really wants to buy Yahoo when it can’t compete with Yahoo leave alone Google? I thinkg Balmer is the one who is being dumb here. He may save 5-6 billion dollors but he will lose more in terms of lost time and talent. If the deal is delayed by a year due to these fights and most of the Yahoo talent leaves company, Microsoft may be paying 90% of the asked price for 20% of the company talent? And Gopgle gets more time to gear up for the combined company. Is that a good business? Either Steve Balmer should have confidence in Microsoft talent or he should pay a premium and buy Yahoo. Board directors don’t get paid a lot and Yahoo directors don’t care if they are on the board or not. The Yahoo management has lots of shares and irrespective of how the deal is reached they will still make almost the same amount. Even if they are forced out they will walk with a lot of money. So who is going to be a loser? Microsoft shareholders because ultimately there share price will go down. And Yahoo shareholders who bought the shares at $30 plus to make a quick profit or the ones who did not look at the company earnings while buying the shares and thought that they will keep growing at 30% every year.
Agree with Dave.
Yahoo seems to be a bit egotistical and a clear picture of an old dog clinging on to something out of sheer obstinacy.
Rid of the board and watch Yahoo soar again man!