Microsoft News Tracker

Yahoo today provided a measured response to Steve Ballmer’s Saturday ultimatum. Leaving aside the rebuttal of some of Ballmer’s assertions in his letter to Yahoo’s board of directors, here’s the gist:

Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.
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In conclusion, please allow us to restate our position, so there can be no confusion. We are open to all alternatives that maximize stockholder value. To be clear, this includes a transaction with Microsoft if it represents a price that fully recognizes the value of Yahoo! on a standalone basis and to Microsoft, is superior to our other alternatives, and provides certainty of value and certainty of closing. Lastly, we are steadfast in our commitment to choosing a path that maximizes stockholder value and we will not allow you or anyone else to acquire the company for anything less than its full value.

This response very neatly and cleanly invokes the ultimate defense of “maximizing shareholder value” without self-serving fluff or reckless promises. However, it is nonetheless weakened by Yahoo’s recent poor performance.

One interesting point in the full text is a reference to Microsoft’s not having satisfied Yahoo’s concern over regulatory issues which is the basis for the “uncertainty of closing” remarks above. It hasn’t been revealed exactly what issues these are, but for companies with the reach of Yahoo and Microsoft, I bet I could find a market in a country somewhere in the world where an acquisition could be considered a restraint of trade. That sort of problem could quickly be fixed by a spinoff, but perhaps Yahoo has a deeper concern in mind.

Frankly, I’ve mostly been ignoring the Microsoft-Yahoo acquisition soap opera since the daily doings have been at best tedious, repetitive, and inconclusive. Today, however, Microsoft finally took the velvet glove off the steel fist with a letter to the Yahoo board from Steve Ballmer. The net is that unless the Yahoo board starts to seriously negotiate the details of the acquisition and an agreement is concluded within three weeks, Microsoft will cut the amount of the financial offer and wage a proxy fight to replace the board and carry out the acquisition. I still think the deal is a really bad idea, but the lack of any apparent alternative for Yahoo means there is no stopping it.

Joanne Bradford who is Microsoft’s current MSN honcho and former Microsoft Web ad czar (”We love ad salesmen“) is leaving Microsoft for startup Spot Runner which is nominally an “Internet-based ad agency that makes it easy and affordable for local businesses to advertise on TV.” The trick apparently is to have canned creative content that can be easily modified for a local business. Bradford reportedly will be executive vice president of National Marketing Services, focused on national advertisers” which sounds like a good fit for her and apparently also fits somewhere in Spot Runner’s business model.

As for MSN, former Bradford direct report Greg Nelson, who is the general manager of MSN.com International, will be running things on an interim basis. I would chalk this up as yet more turmoil in Microsoft’s online business  - the departure of Bradford’s boss Steve Berkowitz was announced in February. Of course, we’ll really see turmoil if the Yahoo deal goes through and Bradford may well have been dodging exactly that.

Microsoft today made an omnibus executive rearrangement announcement covering a variety of Corporate and Senior Vice Presidents. Here are the novel aspects from my perspective:

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Microsoft today announced a new site that will be showing Microsoft Content Ads - the Wall Street Journal Digital Network:

The Wall Street Journal Digital Network today announced an agreement in which Microsoft Corp. becomes the exclusive third-party provider of contextual and paid search advertising for its network of sites, including The Wall Street Journal Online, Barrons.com, MarketWatch.com, AllThingsD.com and others.

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The addition of these sites brings an additional 20 million unique visitors per month to the extended Microsoft network, enabling advertisers to reach out to an increasingly deep and attractive audience in the financial services vertical. The Wall Street Journal Digital Network is expected to begin providing Microsoft contextual advertising in February.

It is a two year deal with unspecified financial terms and Microsoft displaced Pulse 360 and business.com. Google’s erstwhile acquisition DoubleClick will continue to provide banner advertising.

The good news here is that this isn’t another instance of Microsoft vending old fashioned banner ads placed by their crew of banner ad salesman, but modern content targeted ads available to all advertisers through MSN adCenter:

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