MSN Bid Fails – Look out For Yahoo Plan B

February 29th, 2008 by Click Consult

Last Monday Yahoo officially rejected Microsoft's bid at $31 per share. Sources claim the bid undervalued the company and it's assets and that a bid of at least $40 per share would be a more realistic offer but not necessarily accepted. Even though the current market value is way below this.

There is some credibility to Yahoo’s claims to this value. As one of the originators of today's internet, the Yahoo brand is huge. Aside from Google, Yahoo is the best known brand on the internet, but this will take some careful re-direction to monetize this again.

The online properties that Yahoo have access to and own rival those that make Google so powerful. Flikr, the online photo sharing site was courted by Microsoft before Yahoo’s acquisition, and is said to be a key feature in the takeover plans of any potential suitors.

Yahoo Mail is the most popular web mail system and access to all that user data would be a significant incentive to buy out. With Microsoft adcenter demographic targeting options this could become a powerful marketing tool.

By holding out and rejecting the Microsoft bid, the Yahoo execs could be making any number of statements. They could be waiting for a better offer. Interest has been shown from News Corp, Time-Warner-AOL and other sources.

They could be making a stand on their own independence, looking to get back what Google has taken from them.

What ever the plan, the yahoo board may have to act faster to ensure this is still their decision. The offer has resulted in some mixed responses from many areas, but the most important opinions will be the shareholders. If Microsoft or anyone else wanted to push this, the option to approach shareholders may be viable.

In a blog entitled “Yahoo! shareholders in favour of selling”, Eric Jackson, president of Ironfire investments is asking more bidders to enter the race, openly stating that $31 is the starting bid and all bids above this will be considered. Mr Jackson is also asking other shareholders to join with him to prevent Yahoo continuing independently, seeing this as “a recipe for a $17 stock price”. If this group of disgruntled shareholders, by the name of “Yahoo Plan B”, can gather enough momentum, they could force Yahoo’s hand into a quicker decision than expected.

This entry was posted on Friday, February 29th, 2008 at 5:01 pm . You can follow any responses to this entry through the RSS feed.

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