Microsoft Kills Yahoo! Hopes (MSFT, YHOO)

November 19, 2008 by Douglas A. McIntyre

Yahoo_logo_2Microsoft_logoSteve Ballmer is presenting data today at the Microsoft (NASDAQ: MSFT) annual shareholder meeting.  Ballmer has said that he essentially wants no part of a Yahoo! (NASDAQ: YHOO) merger.  It said that those acquisition talks with Yahoo! have finished and that Microsoft has moved on.  We have also gotten some other data out of the Microsoft shareholder meeting which tied in directly to this current situation that was offered up before any of the Yahoo! comments came across the tape.

One note that Ballmer did make was that Microsoft is interested indoing a search deal with Yahoo!, but no such negotiations are current.

At the annual shareholder meeting, Ballmer also noted that the companywill be affected by the economy and that the company is not immune tothe current conditions.  He also noted a slower employee headcountgrowth being the case for this year and likely for the next fiscal yearas well.

Microsoft shares are at a 10-year low.  As of last quarter the companyhad more than $25 billion in cash and equivalent in investments.Yahoo!’s market cap after this 10% drop is now only $14+ billion.

But unless you are a Yahoo! holder who is buried in a "long and wrong"trade, can you honestly expect that Microsoft would risk all of itsfree capital remaining that it has amassed over the years just to bailout an asset whose value and worth is declining each month?

The webcast to that meeting is here.

Jon C. Ogg
November 19, 2008