No. Yahoo played that situation smartly. They knew they were worth more than the $45B Microsoft offered due to their stake in Alibaba.
This thread dives into how Microsoft lowballed Yahoo: https://news.ycombinator.com/item?id=31029289
This thread dives into how Microsoft lowballed Yahoo: https://news.ycombinator.com/item?id=31029289
Yahoo got lucky with the Alibaba stake. That wasn’t what Microsoft was after. Microsoft was desperate to be relevant in Internet consumer services and compete with Google.
Yang and the board believed they could fix Yahoo. None of their predictions came true.
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“In an email to Yahoo employees after the board's rejection of the Microsoft offer was made public, Chief Executive Jerry Yang maintained that the company is well-positioned to grow, citing the Internet powerhouse's efforts to improve its standing in online advertising and build an alliance with newspapers.
"We have accomplished a great deal in a very short time," Yang said. "Yahoo is a faster-moving, better-organized, more nimble company well on its way to transforming the experiences of its users, advertisers, publishers and developers."
He said the company aims to "grow visits to key Yahoo starting points and properties by approximately 15% per year over the next several years."
https://www.marketwatch.com/amp/story/yahoo-rejects-bid-micr...
However I don’t think that applies here. if the board truly believed it, they would have sold the “pure Yahoo” piece to Microsoft for far more than $4.5B and spun out the Alibaba stake. They didn’t and ended up losing billions in shareholder value.
Occam’s razor would suggest that Microsoft and Yahoo’s exec teams both talking about the value of the Yahoo Internet services as the rationale for the deal probably is the truth. And Microsoft would have paid much more than 10% of the $45B to get it.
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Microsoft sees Yahoo as a way to compete with arch-rival Google Inc GOOG.O in the Internet search and advertising arena, but it has limits to what it is willing to pay to get a deal done.
“We’re prepared to move forward without a merger with Yahoo,” Ballmer said. “We think the best way to move forward quickly (and gain critical mass against Google) is to come together with Yahoo.”
This was the era of Vista and IE and windows live/hotmail. My maybe-controversial(?) opinion is they just would have MSNd Yahoo in some directionless brand “synergy” at a time where Microsoft still seemed to be figuring out what its own future identity/company vision would be.
I think Yahoo knew that. And while Yahoo had many of the same challenges internally at the time (which it eventually succumbed too, whereas there was no clear consensus that Microsoft would successfully reinvent itself), at least it was in control of its own destiny
That is separate from saying that Yahoo shareholders would have benefited from selling to Microsoft.
... I don't actually have an argument. I just wanted to keep the 'No' chain going. Sorry.
This is one of the hottest tech takes I've read in the past 10 years.
Getting lucky due to an investment in something that is _not_ their core business does not count as "smart" to me.