The Microsoft-Yahoo Antitrust Argument

[esnagel]

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A Microsoft-Yahoo merger would dominate e-mail and instant messaging, and that could create obstacles with regulators.
Funny, I use gmail for my email, and Trillian, which encompasses AOL IM, ICQ, MSN, Y!Chat and Gtalk all in one. So if the Microsoft-Yahoo merger would “dominate” e-mail and IM, why am I not affected?
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The Microsoft-Yahoo Antitrust Argument (http://www.netnagel.com/2008/02/the-microsoft-yahoo-antitrust-argument.html)

[popowich]

Everyone has plenty of options for e-mail at home and/or at work.

-Raymond

[Kaos]

Google just loves to pick fight with Microsoft LOL! Bottom line to me is the search engine combination of Microsoft and Yahoo market share is still not close to Google's therefore it shouldn't be a monopoly type issue. Time will tell though I guess. I think this will drag out forever

[popowich]

Yahoo rejected the offer.

-Raymond



Posted by Heidi Moore

In "Casablanca," Humphrey Bogart bemoaned, "Of all the gin joints in
all the towns in all the world, she had to walk into mine."
At least five big mutual funds who hold big chunks of both Microsoft
Corp. (MSFT) and Yahoo Inc. (YHOO) stock have to be thinking the same
thing about the conundrum that is for them Microsoft's $31-a-share bid
for Yahoo. Among their top 10 shareholders, Microsoft and Yahoo share
five influential ones: Capital Research & Management, Barclays Global
Investors, State Street Corp. (STT), Vanguard and Goldman Sachs Group Inc.
(GS).
Together, that group holds a lot of financial influence, a combined
288.7 million shares of Yahoo and 1.5 billion shares of Microsoft. (By
comparison, Microsoft CEO Steve Ballmer and founder Bill Gates together
hold about 1.26 billion Microsoft shares.
Capital Research & Management is the most important because of the
sheer span of its stake: it held a little more than 11% of Yahoo and
around 6% of Microsoft at the last reported date of Sept. 30. But they all
are deal arbitrageurs of sorts now.
Even the most acquisitive hedge funds and arb investors who have
jumped into Yahoo stock in recent weeks - and helped turn over nearly half
of Yahoo's shares - probably couldn't topple the dominance of those big
mutual funds. Microsoft has acknowledged their power by courting some,
including Capital Research & Management, according to a New York Post
story.
That is where the deal calculus gets tricky. What might be good for
Yahoo in this proposed deal could be bad for Microsoft, and vice versa.
Yahoo's shares may rise dizzily on speculation that the search and
Internet advertising company can get a higher bid. Meantime, Microsoft's
shareholders already have had their patience tried, as stock price has
languished near 52-week lows and the software giant confronts criticism
that it paid too rich a price for such strategic deals as the
acquisition of aQuantive and a stake in Facebook.
Microsoft faces two other potentially troubling prospects if the deal
goes through: an integration of this size will take a long time, and
Microsoft would deplete much of the cash on its balance sheet and have
raise more than $20 billion from the sale of debt to finance the
acquisition.
And there is another shareholder Microsoft might have to watch for:
Legg Mason Capital Management's Bill Miller, who is the largest
institutional holder in Yahoo and has been an outspoken fan of search and ad
rival Google Inc. (GOOG). Miller holds 4.73 million Google shares and
once said of the Internet search wars, "Once it's settled down, Google's
got it locked up, no matter what Microsoft or Yahoo do."
Right now, Yahoo's board plans to reject Microsoft's $44.6 billion
offer as not high enough, according to the Wall Street Journal. But with
Yahoo seeming to set a minimum price for any takeover of $40 a share,
it looks as if the company may be willing to play ball.
Look for a lot of conflicting economic loyalties among those
investors who own both Microsoft and Yahoo-and their archnemesis, Google.
Unlike the romantic problems of Bogey, Ingrid Bergman, and Paul Henreid,
this corporate trio's problems will amount to a very big hill of beans for
these shareholders.

[esnagel]

yeah, I don't get it. And the stock went up again. So the stock goes up when Microsoft makes an offer, and the stock goes up when they reject it. Look out bottom, here we come!

[popowich]

Marcelo Carvalho, an IT manager in San Francisco, writes:

I do not know if anybody, including Marat Glazer, the Los Angeles
software developer who wrote the "Microsoft's Yahoo Bid Genius" Talk Back
letter, has understood the layer beneath a Microsoft Corp. (MSFT)-Yahoo
Inc. (YHOO) deal.
The potential deal is not the same as two petroleum companies merging
by just putting together their respective 6% and 22% market shares,
changing the plastic banners at the gas stations, and at most, deciding
from whom to continue buying drill bits.
It is an entirely different beast.
Microsoft runs on the Windows platform and it has proved inadequate
to run big Internet companies. There is not one big Internet company -
and I mean "BIG" like Google Inc. (GOOG), Yahoo, Amazon.com Inc. (AMZN),
eBay Inc. (EBAY) and such - that runs on Windows besides Microsoft.
Its software platform has been a disaster supporting its search engine,
email and other free services.
On that front, Microsoft is being beaten by Google and Yahoo, both
running on open source software, which has shown to be much more
efficient than Windows servers. Of the top 500 supercomputers about 80% now run
on Linux, including the top two, which run on the SuSE Linux
Enterprise Server.
Now here comes the big issue!
Will Microsoft move Yahoo to Windows?
If so, Microsoft will go broke because this is just what hasn't
worked well.
If the company does not, it will be signing the Windows platform
obituary because when people realize that Microsoft itself can run on Linux
and does not need Windows, they will follow through.
To my knowledge the simple fact of Microsoft bidding to buy Yahoo
means that Microsoft has thrown in the towel on its operating system, and
that the Windows platform is a thing of the past.