With Microsoft's top executives fanned out around the globe Monday, reporters and investors tracked their every word on the company's bid...
With Microsoft’s top executives fanned out around the globe Monday, reporters and investors tracked their every word on the company’s bid for Yahoo — now more than a month old.
Early in the day, Chief Executive Steve Ballmer told reporters the deal is still a good one. Presumably, that refers to the half-cash, half-stock offer now worth $40.8 billion, down from $44.6 billion when it was made public Feb. 1 because Microsoft’s shares have slid since then.
The stock fell 21 cents Monday to $26.99.
“The deal makes sense with the price and structure we announced,” Ballmer said at a news conference in Hanover, Germany, site of one of the world’s biggest technology conferences.
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“We hope it becomes reality,” he said. “There is a lot of merit for Microsoft and Yahoo, for Yahoo shareholders and for Microsoft shareholders, for advertisers and for consumers.”
Yahoo’s board of directors formally rejected Microsoft’s offer Feb. 11, saying it “substantially undervalues” the company.
Since then, action on the deal has occurred behind the scenes as Yahoo has sought alternative suitors and Microsoft has worked on ways to pressure the company to accept its bid.
Ballmer, according to Reuters, also said, “There’s been a range of dialogue and there’s a range of alternatives being considered. I think it’s best for me not to get into the detail.”
A company spokeswoman said Ballmer was referring to internal dialogue and alternatives, not conversations with Yahoo.
In Seattle, Microsoft Chairman Bill Gates spoke at a conference highlighting SharePoint, the company’s fast-growing software for, among other things, business collaboration and search.
The big news was Microsoft’s offer of SharePoint as a service, meaning the software would be run in Microsoft’s data centers and accessed by its customers via the Internet on a subscription basis.
It’s the latest example of a broad shift in the software industry and Microsoft’s business models.
Gates was asked whether acquiring Yahoo would affect SharePoint.
“Well I don’t think whether or not we end up doing the Yahoo merger or not has any real direct impact on SharePoint,” he said.
“Obviously, it represents the idea that we’re very serious about competing in consumer search. We think that’s a very important area.”
Gates was also asked how Microsoft would face competition, particularly from Google, as more software functions become online services.
He dismissed Google as a competitor for large businesses, saying, “they really don’t understand the special needs of business.” But he noted it has done extremely well in consumer search, an area in which Microsoft is trying to catch up by buying Yahoo.
“Today, [Google's] economic model is based on consumer search and having done an incredible job there,” Gates said. “And, obviously, we’re investing in challenging them in that space, making sure that even as it grows, it gets to be more competitive than it is today.”
Not everyone was mining every opportunity for Yahoo details, however.
Chief Financial Officer Chris Liddell spoke at a Morgan Stanley technology conference in Dana Point, Calif. Morgan Stanley is advising Microsoft on that deal.
Liddell mentioned Yahoo in passing a few times, noting that acquiring Yahoo would be one aspect of how software as a service becomes a bigger part of Microsoft’s business.
The analyst hosting the conference gave Liddell an opportunity to close by covering anything missed in his presentation.
“Well, no one asked me about Yahoo, which is interesting,” he said. “But I’m sure everyone is vaguely interested in it. You know, their — “
The analyst, sarcastically, interjected, “What was that?”
“Yeah,” Liddell continued. “The small company that we’re looking to acquire.”
He said Microsoft looks at its options — something he is “incredibly systematic about” — every week “on the basis of what’s happening in the external market: what the opportunities for us are both in our customer businesses and through acquisitions.”
That will continue, he said, “but there’s no news, per se, on Yahoo.”
Benjamin J. Romano: 206-464-2149 or email@example.com