Ballmer: We don't need Yahoo and we aren't raising our bid

Ballmer: We don't need Yahoo and we aren't raising our bid

Summary: As expected, Microsoft launched its Yahoo counterattack on Wednesday as CEO Steve Ballmer said the company isn't raising its bid for the portal and would be just fine without a merger.Whether Ballmer is bluffing or not remains to be seen.


As expected, Microsoft launched its Yahoo counterattack on Wednesday as CEO Steve Ballmer said the company isn't raising its bid for the portal and would be just fine without a merger.

Whether Ballmer is bluffing or not remains to be seen. Yahoo reported solid first quarter earnings on Tuesday, but didn't deliver results good enough to force Microsoft to raise its bid. As things stand today, Microsoft is sticking with its $31 a share offer for Yahoo as a Saturday proxy war deadline approaches.

According to Bloomberg, Ballmer said the following at a Microsoft conference in Milan.

"We are offering a lot of money. If Yahoo's shareholders like it, that's great. We are prepared to go forward without a merger with Yahoo."

As for Ballmer's Saturday proxy war deadline, the CEO added "time is money, we've made that clear."

What should we make of all of this banter? Bluster aside it's not inconceivable that Microsoft could raise its bid if it could seal the deal. Time is money for Microsoft too, which is increasingly getting lapped by Google on search and online advertising.

However, analysts widely agreed that Yahoo's results weren't enough to prod Microsoft to up its bid. Needham analyst Mark May summed up the consensus Wall Street view:

"We believe these results do little to accelerate a resolution to the stalemate with Microsoft. With no change in the original terms, Microsoft’s offer values Yahoo! at ~$30.80/share, or ~8% above current levels. We believe Yahoo!’s board will continue to vigorously oppose a transaction and pursue other alternatives aggressively, and it appears Microsoft is taking a firm stance on valuation."

Merrill Lynch analyst Justin Post noted that Yahoo's search monetization growth of 10 percent missed his 20 percent estimate. On the bright side, Yahoo's traffic is stable indicating that the company could monetize it better via an outsourcing deal with Google. Post reckons that a Microsoft purchase of Yahoo is the most likely outcome and that the portal has some leverage to negotiate a higher price.

But for now the stand off continues.

Topics: Social Enterprise, Banking, Browser, Microsoft

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  • If you Microasoft doesn't need Yahoo go home!

    Steve Ballmer most stupid statement yet. If you don't need Yahoo why make a bid?

    This just proves my point he should be fired as CEO.
    • Not a stupid statement at all

      "Wanting" and "Needing" are two different things.

      A company may [i]want[/i] to purchase another company to save time and money getting to a certain point, but passing over that purchase will not prevent them from reaching that point.
      • My Dad's bigger than your Dad

        That's what all of this is amounting to.

        This is just rubbish for the consumption of money moving idiots.

        Microsoft can't afford any more, they've offered all that they can in their desperation.

        Tick, tock, tick, tock. Seeya Microsoft.
        • Oh well

          it would appear we have here another one who has little idea of business or it's workings.

          I would imagine that your fascination of Penelope and Rupert's daily lives has blinded you to much of what transpires around you.

          The OLPC possiblly dropping Linux, Mac and XP/Vista sales each easilly outpacing Linux adoption, you are right, the clock is ticking.

          tic, toc. tick, toc. tic, toc.

          And for whom the bell might toll, you wonder? I do believe neither Microsoft nor Apple have much to worry about in that respect.

          tic, toc. tick, toc. tic, toc.... ;)
      • Gonna walk, pulling chair from table (oh, durn it the chair cliche)

        Okay. Though I agree with the gp post, let's accept your
        parsing and reason from there. Microsoft may get to its goals
        without acquiring Yahoo. So what's the point of Ballmer's
        statement in the context of what he wants? I guess it's to warn
        Yahoo's shareholders that Microsoft won't wait forever and may
        walk, in which case they better call up Yahoo's board and get
        the deal done.

        The companies share stockholders and one of the linchpins to a
        Yahoo shareholder's decision is if there's more upside potential
        in that share of Yahoo vs. a or another share of Microsoft. Any
        lack of enthusiasm in owning more Microsoft (and I assume
        that their current position in Microsoft is by choice) is offset by
        the joy of more cash. We did hear a few major owners of Yahoo
        (who also have Microsoft shares) say the offer price should be

        Threatening to walk from a deal is one of those ploys that tip
        how important the deal is to the party making the threat. The
        obvious rejoinder is "there's the door, may I get your coat?"
        unless the other party also really wants the deal. It's been
        nearly three months from the original offer and where are the
        signs that the Yahoo board is alienated from its shareholders
        on this issue? I think it comes down to if Microsoft wants it, it
        will cost more, and the "don't need Yahoo" just tipped that
        Ballmer is considering blinking. In the context of this deal, it
        was a stupid thing to say.
      • Then the obvious question is...

        If they didn't need Yahoo, then why this takeover attempt? After all, if Microsoft can do whatever it thinks it wants to do with a takeover of Yahoo without Yahoo, then why on earth make the bid?
        • Because of the first part

          How far do [i]you[/i] go to get what you want?

          I am sure you have set limits for yourself, like purchasing a TV or an iPhone:

          Some people will pay top dollar as they [i]want[/i] it now, while others wait till certain criteria is met.

          It does not mean you wont have the TV or iPhone you [i]want[/i], the fact that you do not [i]need[/i] it precludes the thought or desire to pay more for it at the current time.

          If you [i]need[/i] it immediatelly, you have no choice but to pay the premium.
          • Well...

            If they (Microsoft) don't need Yahoo now, then why the ultimatum to take the deal by this Saturday? I think that's the date mentioned.
          • Good point

            That is a valid question. It could be a bargining tactic, no different then telling a salesperson "I need to know by X date, or I will shop somewhere else.

            If anything this has certainly brought to other search engine companies attention that Microsoft is serious, and if they do not go with Yahoo, they may be interested in their search technology, some of them pretty good, if not better.

            And at a much cheaper price tag.
            John Zern
          • Obviously you haven't tried haggling with a merchant before...

            Try it and you'll get better bargains in your next purchase.
        • They were just being generous?

          Or wanted to help Yahoo out?

          Ole Man
  • RE: Ballmer: We don't need Yahoo and we aren't raising our bid

    Its good to see that Microsoft is maintaining its integrity on this issue. That can't be said for Yahoo. There is absolutely no reason that Microsoft should raise their bid. Yahoo isn't worth that much and Microsoft already made a premium offer. If Yahoo is too ignorant to see what a great deal this would be then they will just fade away. Its going to get to a point where Yahoo's value will be so low that Microsoft will just purchase them way below the asking price.
    Loverock Davidson
    • It is a terrible deal

      Why? Because Microsoft will implode one of the cornerstones of the web into a Microsoft Crapware wasteland. It is terrible for all of us end users.
      • No its not

        Its a great deal! Why? Because both companies will benefit from each other. Microsoft will benefit from the creativity that Yahoo can offer, Yahoo will benefit from the financial funding that Microsoft can offer. Its a win-win deal.
        Loverock Davidson
        • "the creativity that Yahoo can offer"

          Microsoft needs that alright. Desperately. The WOW didn't start now.
        • Two Words -

          Hot Mail
        • You're forgetting...

          The poison pills that Yahoo has earlier and more recently built into their structure. That and there's no clear guidance from Microsoft what they actually want to keep from Yahoo, and what they're going to get rid of from inside Microsoft. Now Ballmer is saying that they don't need to do the deal. If so, then why did they take this path? Stupidity? Messing with the markets? A fast track where as far as the outside world is concerned there is no road map to anywhere with the deal.
        • you never gain anything from ms

          you always end up in the gutter one way or the other .

          and up to now the gutter is bout to by full with prooff
      • Message has been deleted.

    • Message has been deleted.