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Yahoo: Microsoft Bid Has Been a Distraction

On Wednesday in the company’s annual report, Yahoo admitted that its executives have been distracted by Microsoft’s unsolicited acquisition bid, and indicated the possibility that advertisers might cut and run in light of the uncertainty. The unwelcome bid, which was ultimately rejected, might not just cause advertisers to leave, but perhaps even employees.

Microsoft’s $44.6 billion takeover bid which was rejected two weeks ago, has caused the company to shift their focus and may have considerable impact on the company. According to Yahoo, at minimum they’ve spent considerable time and effort evaluating the proposal, and at most advertisers and publishers, as well as key employees, might not stick around to find out the company’s fate.

“Microsoft’s unsolicited acquisition proposal has created a distraction for our management and uncertainty that may adversely affect our business,” said Yahoo in the annual report.

Adding even more distraction is the filing of seven lawsuits against Yahoo in connection with the Microsoft bid rejection. Four suits were filed in Santa Clara County Superior Court, and three more in Delaware Chancery Court. The majority of these lawsuits have alleged that in rejecting Microsoft’s bid, Yahoo failed to look out for shareholders’ interests. Some have also claimed that Yahoo board members failed to negotiate properly in an attempt to get Microsoft to up their bid.

The Microsoft bid was listed amongst the routine risks that the company faces, and although it doesn’t really tell us anything we didn’t already know, it confirms what many investors had already suspected.

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4 thoughts on “Yahoo: Microsoft Bid Has Been a Distraction

  1. It seems Yahoo really needs to get their act together. They are all over the place! With the recent layoffs, lawsuits and now admitting to being distracted over the bid, they are not looking too great right now!

  2. If yahoo would allow the bid of Microsoft, then there would be only 2 major search engines; Google and Yahoo/MSN. The competition between these SE would be stiffer. But it would bring good services and more services for the users.

  3. Yahoo is wallowing, Microsft would inject some new life. Google needs effective competition for us all to benefit, its a simple fact that applies in business. A monopoly does not benefit the internet in any way so I hope it something comes of this or MSN lifts it’s game.

  4. Yahoo Microsoft merger would mean YUI, Yahoo Performance people would leave. They have created wonderful developer friendly libraries. I would hate to see this disappear into Microsoft.

    I can see why Yahoo management considers this as a huge distraction.