Yahoo formally announced today that it is no longer in discussion with Microsoft for a deal of any sort. Both companies had renewed discussions once again exploring either an all-out acquisition or the sale of Yahoo’s search business. But Microsoft was “not interested in pursuing an acquisition of all of Yahoo!, even at the price range it had previously suggested.” And Yahoo’s board realized that selling its search business would effectively neuter the company in the long run. In a separate statement (also below) Microsoft says it is still willing to talk about that alternative transaction. A search deal with Google now looks more likely.
Here is the text of Yahoo’s press release (Microsoft’s statement is below).
Yahoo! Inc. (Nasdaq:YHOO), a leading global Internet company, today announced that discussions with Microsoft regarding a potential transaction — whether for an acquisition of all of Yahoo! or a partial acquisition — have concluded. The conclusion of discussions follows numerous meetings and conversations with Microsoft regarding a number of transaction alternatives, including a meeting between Yahoo! and Microsoft on June 8th in which Chairman Roy Bostock and other independent Board members from Yahoo! participated. At that meeting, Microsoft representatives stated unequivocally that Microsoft is not interested in pursuing an acquisition of all of Yahoo!, even at the price range it had previously suggested.
With respect to an acquisition of Yahoo!’s search business alone that Microsoft had proposed, Yahoo!’s Board of Directors has determined, after careful evaluation, that such a transaction would not be consistent with the company’s view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo! stockholders.
Yahoo! remains focused on maximizing value for stockholders by continuing to execute on its strategy of being the “starting point” for the most consumers on the Internet and a “must buy” for advertisers. The online advertising industry is projected to grow from $40 billion in 2007 to approximately $75 billion in 2010 and the company believes it has the right assets, strategic plan, Board of Directors and management team to capitalize on this growth opportunity.
And here is Microsoft’s statement:
In the weeks since Microsoft withdrew its offer to acquire Yahoo!, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo! shareholders. This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers.
As stated on May 3rd and reiterated on May 18th Microsoft was not interested in rebidding for all of Yahoo!. Our alternative transaction remains available for discussion.