Yahoo CEO hoping to thwart Microsoft

Yahoo Inc. Chief Executive Jerry Yang told employees Wednesday that the struggling Internet pioneer is still examining ways to avoid a takeover by rival Microsoft Corp.

“Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape,” Yang wrote in an e-mail. He emphasized no decision had been made on Microsoft's six-day-old bid, initially valued at $44.6 billion, or $31 per share.

Yang, who helped conceive Yahoo in 1994, didn't set a timetable for the Sunnyvale-based company's response, writing that the board “is going to take the time it needs to do it right.”

Most of Wednesday's e-mail, filed with the Securities and Exchange Commission, tried to cheer up Yahoo's employees, many of whom are likely to lose their jobs in the months ahead, one way or the other.

Yahoo already has drawn up plans to trim 1,000 jobs from a 14,300-employee payroll in an effort to boost its sagging profits. The layoffs are expected to be even more severe if Microsoft devours the company because about $1 billion in expenses would be cut in a takeover. And if Yahoo were to eschew Microsoft in favor of a debt-laden leveraged buyout, about 4,500 employees could be fired, estimated Stifel Nicolaus analyst George Askew.

“We have a lot to be excited about and there's more good news to come,” Yang wrote in his e-mail. He cited a shake-up of Yahoo's online music service announced earlier this week and plans to unveil new products at a mobile conference in Barcelona next week.

If Yahoo rejects Microsoft, most analysts believe the company will have to line up another acquisition offer or make radical changes to satisfy disillusioned shareholders.

But most analysts doubt any other potential suitor will have the financial muscle – or desire – to try to outbid Microsoft, which has $21 billion in cash and a market value of nearly$265 billion.

Yahoo could boost its profits dramatically by turning over the responsibility of running its search engine and an adjoining advertising platform to rival Google Inc., the Internet's most prosperous company.

Google CEO Eric Schmidt reportedly has broached a potential partnership with Yang, but that alliance might be blocked by antitrust regulators worried about the competitive fallout if two of the Internet's biggest ad networks join forces. Antitrust laws almost certainly preclude Google from trumping Microsoft's bid in an attempt to buy Yahoo outright.

Former Yahoo employees who know Yang have no doubt he is exhausting all avenues that might allow his company to escape Microsoft's clutches.

“Jerry bleeds purple and gold (Yahoo's corporate colors),” said Rob Solomon, a former Yahoo executive who spent six years at the company before leaving in 2006. “He always envisioned building a company that would be around for 100 years, not just 14 years.”

Michael Liedtke, Associated Press

businessBusiness & Real Estate

Just Posted

California Highway Patrol officers watch as Caltrans workers remove barricades from homeless camp sites as residents are forced to relocate from a parking lot underneath Interstate 80 on Monday, May 17, 2021. (Kevin N. Hume/S.F. Examiner)
San Francisco’s broken promise to resolve homeless encampments

‘There is an idea that The City is leading with services, and they are not’

The Department of Building Inspection, at 49 South Van Ness Ave., has been mired in scandal since since its creation by voter referendum under Proposition G in 1994. (Courtesy SF.gov)
The Department of Building Inspection, at 49 South Van Ness Ave., has been mired in scandal since its creation by voter referendum under Proposition G in 1994. (Courtesy SF.gov)
Whistleblowing hasn’t worked at San Francisco’s Department of Building Inspection

DBI inspectors say their boss kept them off connected builders’ projects

FILE — Mort Sahl on Nov. 10, 1967. Sahl, who confronted Eisenhower-era cultural complacency with acid stage monologues, delivering biting social commentary in the guise of a stand-up comedian and thus changing the nature of both stand-up comedy and social commentary, died on Tuesday, Oct. 26, 2021, at his home in Mill Valley, Calif., near San Francisco. He was 94. (Don Hogan Charles/The New York Times)
Legendary local comedian dies at 94

By Bruce Weber NYTimes News Service Mort Sahl, who confronted Eisenhower-era cultural… Continue reading

Sharon Van Etten (left) reached out to Angel Olsen about working on a song and they ended up releasing “Like I Used To,” which may be performed at Outside Lands. (Photo by Dana Trippe)
Performers’ emotions are high as Outside Lands returns to San Francisco

Festival features Sharon Van Etten and Boy Scouts alongside The Strokes, Lizzo and Tame Impala

Most Read