Personal Finance QuickTake:Yahoo + AOL - Microsoft Fight Round III

According to a report from AP today, Yahoo has found another delaying tactic to keep Microsoft at bay. By delaying their Annual Shareholders Meeting, Microsoft no longer has until March 14th to nominate a new board of directors for shareholder vote.

Yahoo continues to use this time to try and either find a white knight, someone they prefer to swing in, to buy them, or find another business merger partner in order to go it alone.

On the White Knight side, Yahoo is apparently still negotiating with NewsCorp's myspace for an online hookup. This would fill-in each others needs nicely as myspace and other sites are becoming a key way to share and search for information. NewsCorp has made it clear that online is a major on-going concern for the company.

On the merger side apparently Yahoo is talking with TimeWarners AOL. Speculation that a bought Yahoo would drive up the value of an AOL and allow TimeWarner to finally dump this anchor (my words...but maybe their's too) has been running rampant. Outside shareholders have begged TimeWarner to do something with AOL, as they have moved away from their subscription based model. This really seems like the worst of both world's to me. I would think they both need stronger partners not grab on to weaker ones.

Regardless, Round III is on, it will be interesting to see Microsoft's next move, as well as how this all shakes out. regardless of what happens, it is going to be well different a year from now!

Personal Finance QuickTake: Yahoo talks to NewsCorp

According to a Yahoo news report (and they would hopefully know...), Yahoo is in talks with NewsCorp in attempts to stave off Microsoft's Hostile Bid.

Yahoo rebuffed Microsoft's advances on Monday, but given how the "No thanks" was worded it seemed as if Yahoo wasn't saying no, period, Just No at this price.

Microsoft seemed to initially have the field to itself with this high of an offer, but Yahoo being smart is trying to find the best deal possible. NewsCorp has been emphasizing its web portion of the business more and more culminating in a buyout of mySpace last year.

This is either a strong attempt out of Yahoo to raise the bid to the mid-40s or above, or they are so desperate not to be assimilated that they are running to whoever will off shelter.

Microsoft will see what comes out of this, but they don't have all the time in the world. To launch a proxy fight and dump Yahoo's board they would need to be prepared to fight by mid March.

It is gonna get interesting!

Personal Finance QuickTake: Yahoo say "No Thanks!"

"Thanks, but No thanks!"

Basically that is the message that Yahoo is sending back to Microsoft. They are couching this as "You are way under-estimating the value of the company." But really this comes down to fit. Yahoo sees Microsoft as, if I can steal from Star Trek, The Borg and they don't want to be assimilated!

The only issue is they might not have a choice. Microsoft has put out an offer to the level that Yahoo can't just say no to and walk away. Shareholders are going to want to understand how they are going to deliver that value to them then.



Here are their options:

• Sell to someone else - Unfortunately the other potential suitors don't want to pay this sort of premium, and Google can't buy them. The FTC would never allow it due to competition issues. No White Knights around.
• Go Private - A LBO, or Leveraged BuyOut. Fine a year ago, not the credit markets are dried up, especially at the leverage this deal would take!
• Piece off the Company - They could try to sell of chunks of the company to pay off the shareholders. Unfortunately it just weakens them further!
• Get the Government to kill the deal - My guess on how they will go. They will get Google's help here as well. This is the "Evil Empire" Defense. Given Microsoft's background as a strong armer it is probably their best chance to keep an independent Yahoo!

This is like a very large version of when Oracle was going to buy PeopleSoft. They were hated competitors and tried to fight it off. But eventually the economics made too much sense. Same deal here, they can fight it, but it is the shareholders that they have to convince. And if you have a chance to sell at 60% over the recent low what are you gonna do...

I am not a professional advisor at all, but unless something whacky happens...this is gonna happen.

Personal Finance QuickTake: AOL

While the Microsoft Battle rages on it seems like thinks are a bit quite on the AOL front. Give no doubt that Microsoft and Google will go tit for tat if needed.

My guess is that if it looks like Microsoft will get Yahoo, my gut is that someone makes a play on AOL. AOL has been a drain on TimeWarner's stock since the merger. They keep trying new business plan but don't have the traction.

However, they do have traffic. AOL is still the #45 web site in terms of reach according to alexa.com. But more importantly it has two thing Google wants; a great content brand name and a very popular email source. Imaging the Gmail/AOL market share...Nice!

If Google does go for it, perhaps NewsCorp will. They have done a wonderful job monetizing mySpace (regardless of what you feel about the looks). AOL would be a great content pick up and Murdoch doesn't want to be left out either.

So my guess is if TimeWarner was ever gonna sell this off, now is the time. Microsoft put a very high valuation out there for Yahoo, and if AOL can get 2/3 of that multiple they would be in great shape!

For all of our personal finance we might just get another shake up that often lead to more innovation and lower prices, which is great for all of us!

Personal Finance QuickTake: Facebook

60 Minutes just ran a really interesting piece on Mark Zuckerberg, the founder and Head of Facebook. What I really liked about the piece is how someone at 23 is changing an Internet model thought cast in stone a year ago.

Over 2 million people sign-up each week, and the main selling point for me is the ability to really custimize your pages with widgets that you can even develop and sell. Sure Beacon was a PR nightmare, but they seem to have a better handle on there clients want compared to mySpace.

I like seeing stories of companies that are just taking off as well. I remember reading about this small search company that was fighting an uphill battle against the jugernaught of Yahoo... you now know it as Google.

I lie business biographies and the "Pirates of Silicon Valley" is a favorite. It would have been great to see more of the early Microsoft and Apple days. Great lessons to be learned from all of these founders:

• Follow your dream
• Don't take no for an answer
• Work harder than all the others

Is Facebook really worth $15 Billion, I don't think so, but rest assured someone is going to buy them, and they will have to pay a King's Ransom.