The software giant said the deal would create a "more efficient" company with total annual synergies of $1 billion, driven by audience critical mass, increased value for advertisers and operational efficiencies. Microsoft said it's already developed a plan to involve both companies' employees in the integration and would offer significant retention packages to Yahoo engineers* and key leaders. Microsoft said it expects the deal to regulatory approval and to be completed in the second half of 2008.
During the conference call, Ray Ozzie discussed the respect MSFT has for YHOO's engineering team.
The deal would provide a $62 premium on YHOO shares vs. close on Thursday.
Yahoo! Inc., today said that it has received an unsolicited proposal from Microsoft to acquire the Company. The Company said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.
So, it's very likely that this deal will not be accepted or rejected anytime soon. In other words, don't plan for an answer today.
The Past
Microsoft and Yahoo talked merger over a year ago (see this TechCrunch post from May, 2007) but, as we know, it did not happen.
A Letter and News Release
Microsoft's Ballmer said in the letter today that Yahoo had told the world's biggest software company a year ago that the Yahoo board felt it was not the right time to enter into discussions regarding a deal.
"According to that letter, the principal reason for this view was the Yahoo board's confidence in the "potential upside" if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment."
"A year has gone by, and the competitive situation has not improved," Ballmer added.
Issues That are Being Discussed:::
1) Can the MSFT and YHOO Cultures Come Together. Employee attrition. Duplication of jobs, products, etc.
2) Yahoo and MSFT Have Been in Talks Before. In fact, Former Yahoo CEO, Terry Semel said that it was not the right time. Yesterday, Semel resigned from the Yahoo Board.
3) Government Regulatory Issues not only in the U.S. but in many other countries where both Yahoo and MSFT have a presence. The EU and MSFT is one example.
+++ See Also: DOJ 'Interested' in Microsoft-Yahoo Deal
Questions for the SEARCHER/USER/Advertiser
A) Whose Search Index Would/Will BE USED?
B) Whose Platform Would/Will Be USED?
C) What would happen (if anything) to the many demos and betas both companies are offering in the search related space?
D) Whose platforms would be used where both companies offer services (Finance, Email, etc.)?
E) How Will the Facebook/Microsoft investment come into play?
F) Will MS Live, Live On?
G) Which Ad Platform Will Be Used?
H) Synergies (via Conference Call):
++ Right People in the Right Jobs.
++ Scale Economics that can kick in rapidly.
++ Expanding R&D, For example...Make Core Search Better
++ Focus on Emerging Technologies.
++ Power of Internet Across Devices
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