Monday, May 12, 2008


@K K
1) Ballmer shoots in foot with withdrawn bid. Look at the stocks - MSFT is down significantly from Jan 30th price, before bid was announced and YHOO is up about 30+% . Who is the loser here, as per Mr. Market?

2) Only the greedy shareholders are angry, and not enough of them at that, to nominate a rival slate of directors. Others have made good money riding from ~$19 to ~$28 in YHOO stock. Yang is waiting for the deadline to nominate alternate directors (may 15th) to expire and then he'll sign a deal with GOOG.

3) Agree 100% with you here. That's the reason for my point (1) above.

4) MSFT == incredible online technology.... (HAHAHA, you surely must be joking here - look at their mounting online losses) It would put a govt-subsized third-world public sector organization to shame.

5) Exactly opposite is true. If YHOO had not spent a dime on its second-rate search technology (panama technology included) and used GOOG all along, they would have grown stronger and GOOG perhaps would have remained a niche player providing backend technology to YHOO. YHOO would have ended up in a better financial condition than it is in now.

6) I don't think MSFT believes that it can get half of GOOG share with YHOO. Otherwise they would be willing to pony up a few more bucks for YHOO. You can't breed two mediocre horses and hope that the combination would be a superstar racehorse. I do agree that MSFT-YHOO combination could squeeze GOOG margins, but only if MSFT plays the unfair game of subsidizing its online business with monopoly profits from desktop products.

7) That equation would be true for any big-cap growth company. The issue is sustainability of growth and inflation during this period.

8) Ballmer indulges in wait and watch. The May 15th deadline expires without any significant event. Next week either MSFT buys YHOO for $35+ adversely affecting its own price or YHOO signs a long-term deal with GOOG, forever pouring cold water on MSFT's search ambitions.

No comments: