Feb 2, 2008

Microsoft bids $44.6 billion for Yahoo

update Microsoft went public Friday with a $44.6 billion cash-and-stock bid to acquire Yahoo.

In its response, Yahoo called the Microsoft bid "unsolicited" but did not reject it.

Microsoft's offer, which was contained in the letter to Yahoo's board, amounts to $31 a share and represents a 62 percent premium over Yahoo's closing price on Thursday. Microsoft said it will offer shareholders the option of cash or stock.



"We have great respect for Yahoo, and together, we can offer an increasingly exciting set of solutions for consumers, publishers, and advertisers while becoming better positioned to compete in the online-services market," Microsoft CEO Steve Ballmer said in a statement.

Yahoo said in a responding statement that its board "will evaluate this proposal carefully and promptly, in the context of Yahoo's strategic plans, and pursue the best course of action to maximize long-term value for shareholders."

The deal comes as Microsoft and Yahoo have both struggled to compete against Google.

Microsoft didn't mention Google by name in its announcement, but it did indicate that its acquisition bid was aimed squarely at its rival.

"Today, the market is increasingly dominated by one player, who is consolidating its dominance through acquisition," Microsoft said. "Together, Microsoft and Yahoo can offer a credible alternative."

In a conference call Friday morning, Ballmer said that Microsoft and Yahoo "really do share a vision for the potential of online services."

Microsoft said in its statement that it believes that it can get all of the needed regulatory approvals and that the deal, if ultimately approved by Yahoo shareholders, could be completed in the second half of the year.

Michael Gartenberg, an analyst at Jupiter Research, said it's "clear that there is increased pressure on Microsoft from Google, and they recognize that. Way back when, Yahoo wasn't that interested in a Microsoft deal. What a difference two years make. Microsoft has a pile of money, and Yahoo has experienced problems of its own. Ballmer, in the past, has historically not loved these types of deals. It is indicative of how different the world is now.

Gartenberg added that the deal "absolutely" makes sense. "But there is a lot to be done in the details. Getting this deal done might be the easiest part. The real challenge is what happens when they finish the deal. This is not a panacea--the details will be what matters," he said.

Rumors that Microsoft was interested in Yahoo have bubbled up from time to time, including the past two springs, on the eve of Microsoft advertising conferences.

The move would be by far the largest acquisition ever for Microsoft. Its largest prior deal, also in the online-advertising space, was last year's $6 billion deal to acquire Aquantive.

Asked on the conference call why Microsoft still needs Yahoo after buying Aquantive, Ballmer pointed to Yahoo's reach with consumers.

"Certainly from a consumer perspective, there's no better way to increase scale and capacity than this acquisition," Ballmer said.

Microsoft also pointed to the intense investments needed in data centers and technology needed to compete with Google.

"Scale matters," said Kevin Johnson, president of the Microsoft division that houses Windows and online advertising. "Some of the scale economics can kick in rather rapidly."

Ultimately, Ballmer said, the deal should help Microsoft become profitable in online advertising.

"We've been losing money," Ballmer said. "Our plan would be to not lose money in the future."

In a letter sent to Yahoo's board late Thursday, Microsoft confirmed that it has had talks with Yahoo since 2006 but that its suggestions of an acquisition had been rebuffed.

"In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together," Microsoft said. "These discussions were based on a vision that the online businesses of Microsoft and Yahoo should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected."

The letter goes on to say that an offer in February 2007 was also rejected. Although at one time, Microsoft was open to other kinds of partnerships with Yahoo, the company says now it just wants to own Yahoo outright.

"While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo that we are proposing," Microsoft said in the letter.

In the conference call, Ballmer said that when Microsoft first talked to Yahoo more than a year ago, it believed that a merger would have benefits to both companies.

"We believe now in those benefits more than ever," Ballmer said.

The public offer follows Yahoo's disappointing earnings report on Tuesday, which sent the company's shares down. Yahoo CEO Jerry Yang said Tuesday that the company is facing "headwinds." He also announced 1,000 layoffs.

Terry Semel, Yahoo's former CEO, who left that position last summer but remained as nonexecutive chairman of the board, left the company altogether on Thursday.

Microsoft's move validates Yahoo's value and could bring out other prospective buyers, said Danny Sullivan, editor of Search Engine Land. However, Microsoft doesn't have enough of a plan as to how it would integrate Yahoo into the company, he said.

Unlike with Microsoft's Aquantive and Tellme acquisitions, Microsoft and its Live brands have a lot of overlap with Yahoo, including e-mail, portal, advertising, and search.

"Microsoft suffers in that they are conflicted over two different brands, and now they're going to have to be conflicted over three," Sullivan said. "If Microsoft wants to be a leader in search, this is a way for them to climb up and be No. 2 against Google. And it validates that Yahoo isn't a loser. It's a company that's worth a lot of money."

A merger might give Google some extra competition, but it wouldn't unseat it as the top search provider, and it would take some time to convince advertisers that they would do better on a Microsoft-Yahoo platform over Google's highly successful ad business, said Mark Mahaney of Citigroup.

"If Yahoo wants to remain independent, it will need to show investors that it is willing to take radical, value-creating steps," and outsourcing search to Google is one of its few options, Mahaney wrote in a research note.

Imran Khan of J.P. Morgan Securities thinks that regulators will approve the deal.

"Yahoo is better off inside a larger company with (a) strong balance sheet and technology," Khan wrote in a research note. A merger of Microsoft and Yahoo could give them the scale, in terms of search traffic, that they need to compete against Google and provide a boost on the ad side, he added.

"A combination of Yahoo's relationships (with DSL providers), and Microsoft's applications and devices, could create a very well positioned potential competitor," Khan wrote.

Microsoft's financial advisers are Morgan Stanley and The Blackstone Group.
CNET News.com's Mike Ricciuti contributed to this report.

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Intel Core 2 Duo E8400 3.0GHz - Wolfdale Arrives

ntel's 45nm Dual-Cores have finally arrived, so it's only fitting that we take one for a spin. Our test subject is the 3.0GHz E8400, offering 6MB cache, SSE4 and more. Overclocking is impressive, with 3.8GHz stable being possible without even raising the voltage! This chip definitely proves itself a winner.



In the summer of 2006, Intel released their 65nm Conroe-based processors, and to say they won the hearts of many would be an understatement. It was one product-launch that Intel didn't want to hit lightly, especially since AMD were actively taking from their customer base - on the enthusiast side, most notably. When said and done, Intel did accomplish what they planned to do. They put the industry through a blender and showed us how to be excited about processors again.

Although frequencies with Conroe were not as high as what we were used to seeing from Intel, the folks in Santa Clara proved that a high frequency didn't mean much if the processor itself was inefficient. Indeed, a 2.4GHz Conroe Dual-Core proved just how much better an efficient processor could be, and it quickly became the most common processor choice for the enthusiast.

The following summer, follow-up processors were released, including the E6750 Dual-Core which we evaluated at the time. Besides speed bumps, those processors didn't bring much to the table in way of new features, except for native 1333FSB support. Instead, the processor we are taking a look at today is one of the few new models that effectively replace the Conroe-based chips that we came to love so dearly in summer of '06.

I won't delve deep into how 45nm improves on 65nm, as I explained all of that in our QX9650 review, but I will touch on things briefly. One large benefit that comes with all die shrinks is better power efficiency and lower temperatures. Chips have the capability to run just as fast, if not faster, than their predecessors, all while running cooler and drawing less power. It's a win/win situation.

But with 45nm, Intel introduced more than just a die shrink. The biggest feature that most people will be interested in is the SSE4 instruction set. It affects media-buffs only - those who encode videos - but the performance gains are so evident, that developers of such applications are bound to begin supporting it sooner than later. The speed increases could be as large as 2x, even though it's difficult to believe.

Other improvements include increased L2 cache, half-multipliers (eg, 9.5x), a faster front-side-bus, improved Super Shuffle Engine, Smart Cache (to improve how split loads are accessed and stored) and so many transistors on a single die, it can give people headaches to think about it!


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No More Netscape !!!

BBC news are reporting that the once famous Netscape Navigator web browser is to be retired. AOL (who own netscape) plan to end support for the product on 1st Feb 2008.



"Netscape was developed by Marc Andreessen, co-author of Mosaic, the first popular web browser. Mosaic was written while Mr Andreessen was a student at the National Center for Supercomputing Applications at the University of Illinois in 1992. After graduation he set up Netscape Communications Corporation and began development of the Navigator browser. The first version was released in 1994. It was quickly a success and dominated the browser market in the mid-1990s."

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If Microsoft Buys Yahoo: What We'd Love--and Hate

Put together two giants like these and there are bound to be some good results and some nasty ones. Here are 11 of our dreams and nightmares.

It's the year 2010. Microsoft owns Yahoo and has just changed the name of Flickr to Microsoft Flickr Live Photo-Sharing Service for Digital Camera Enthusiasts. The service is still free, but Windows Vista users will have to validate their copy of Vista as "genuine" first to use it. What has Microsoft wrought?



That's just one of the nightmares we can foresee from a Microsoft-Yahoo merger. But some good things could ensue for computer users too. Here's what we'd love - and hate - to see happen.
Love: Sending a Wake-Up Call to Google

Google has been untouchable in many aspects when it comes to search, Web innovations, and free cool services such as Google Maps. But perhaps Google has grown too complacent. While we are waiting to see what becomes of Google's mobile strategy, we're less enthralled by services such as Knol. We want to see the combined force of Microsoft and Yahoo give Google an honest run for its money when it comes to innovative online services.
Hate: Goodbye, Beloved Services

The shuttering of Yahoo or MSN services is something we'd hate to see (actually, we wouldn't shed any tears over Windows Live), but it's inevitable some will get the axe, given the overlapping services owned by Microsoft and Yahoo. The merged company would simply create too many redundant services and the odds are some of our beloved services would be killed. Branded services such as Yahoo Mail and Hotmail would survive, but there is a good chance they'd share one development team. Over time the services would become virtually identical, sharing features, functions, bugs, and limitations. Microsoft's instant messaging system sneezes, for example, and Yahoo Messenger catches a cold.
Love: Yahoo Boosts Microsoft Live

We think both behemoths could learn a lot from the other especially when it comes to the look, feel, and usability of Web pages and services. We'd like to see Windows Live integrated into simpler interfaces. Right now there is Windows Live and Microsoft Office Live Small Business. Both are not tied to directly either to the Windows OS or Microsoft Office. Both Microsoft Live sites seem so disconnected.

Yahoo was best in the early days at keeping the interface simple on services such as Yahoo Travel. Today's Yahoo can't match the minimalism of many Google offerings, but it still has designs that are simpler and easier to use than many counterparts at Microsoft.
Hate: Microsoft Yahoo Chaos

Combining the two giants will create confusion. Could you use your MSN Messenger ID to login to Yahoo Mail? Will your Passport be accepted at Yahoo's border?

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