I've worked at Fortune 500 companies, and been involved in many takeover deals in my time. I don't claim to be an expert at it, but I certainly understand the fundamentals.
I've been watching Microsoft's unsolicited bid for Yahoo! very closely, both because the business of it interests me, and the outcome of it could affect WebGUI.
From the business side, I often watch or listen to podcasts of CEO's giving their annual address to shareholders, or doing interviews in prominent magazines. Watching CEO's of other companies for me is a little like watching your favorite player if you're a sports fanatic.
But there's one CEO that makes me absolutely sick. His name is Steve Balmer. He may be the head honcho at the most powerful company on earth, but there's nothing I admire about him. While I didn't always agree with Bill Gates, I admired him immensely. Not so with Balmer. He has no redeeming qualities as far as I'm concerned.
What I don't get is how the CEO of one of the richest companies around can be such a child. This weekend he pulled what amounts to a big 'neener neener boo boo' sour grapes move. Yahoo! decided it didn't want to get bought, and Balmer was so pissed off about it, that he decided do a total dick move to devalue Yahoo!'s stock price, either in the spirit of 'if I can't have it the nobody will' or 'maybe I can screw them over and pick them up for a song'.
Here's what he did: He sent an open letter to Yahoo!'s CEO Jerry Yang.
- First, you don't send an open letter unless you're hoping to embarrass or peer pressure someone into doing something.
- Second, in the letter he tries to tell Jerry that he knows how to run Yahoo! better than Jerry does, with *you shouldn't do this* sort of language. Keep in mind that Yahoo! is the #2 search company and Microsoft is a distant #3. Microsoft may dominate the desktop market, but that doesn't mean that they can run search better than Yahoo!.
- Third, Balmer states that basically he thinks that what Yahoo! is doing poisons the well and makes them unbuyable by anyone. Keep in mind that Yahoo! never asked for a buyout bid from Microsoft, and Yahoo! hasn't done anything it can't undo.
- Fourth, Balmer must be so enraged that he forgot how to do simple math. He states that in the final hours he raised the bid on Yahoo from $32/share to $33/share ($1/share raise) at a cost of $5 billion. He stated that Yahoo! would settle for nothing less than $37/share (an additional $4/share raise) and that would cost an additional "$5 billion or more". In what world does do both a $1/share raise and a $4/share raise both equal $5 billion?
- And then finishes his letter with the total sour grapes comment: "I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table. But clearly a deal is not to be."
Maybe it's just that I have such disdain for Balmer, but in my mind if there's one thing you don't mess with it's someone else's business. It's one thing if you beat them fair and square with better tactics, sales, strategy, and product. It's completely something else to loosen the bolts on their wheels before you start the race. All his letter will do is devalue Yahoo!'s stock price further than it already would have dropped after the announcement that the deal fell through.
I was going to write a blog entry yesterday after just reading his open letter, but then calmed down decided not to. But then I woke up this morning to see that Yahoo!'s stock dropped 22%
at the opening bell, and that got me all fired up again, so here we are.