Yahoo's Microsoft tab totaled $79 million

Yahoo's tab in its efforts to fight off Microsoft last year ran $79 million, according to the company's filing Friday with the Securities and Exchange Commission.

Yahoo spent much of that bill on outside advisers who helped it weigh , which ranged from a total buyout bid for $33 a share to an eventual offer to acquire only Yahoo's search business. Yahoo rejected all of Microsoft's proposals.

Part of the $79 million bill was also attributed to hiring outside advisers for fighting off a proxy contest by activist shareholder Carl Icahn, who eventually settled with the company and received three seats on Yahoo's board.

A portion of the bill also went to Yahoo's outside advisers considering its controversial search agreement with Google, which ultimately ended with the companies walking away from the deal when federal antitrust regulators said it would challenge the deal.

For Yahoo, however, the true cost was much greater than just $79 million.

In the process, Yahoo founder and CEO Jerry Yang stepped down after enduring the brunt of shareholder anger and has since resumed his role as chief Yahoo. Sue Decker, who was Yahoo's president during the tumultuous year, lost out her bid to become the next CEO when Yahoo's board named former Autodesk chief Carol Bartz to oversee the troubled Internet company. And Yahoo saw an exodus of executives in June 2008.

[myles taylor]

While I think people consider the rejection of the Microsoft offer probably one of the biggest mistakes Yahoo ever made, I think if Microsoft had succeeded it would be considered one of the biggest blunders of 2008. Not so much the acquisition but the price they would have ended up paying.

[t8]

The biggest mistake they made was not buying Google for 1 billion when Google offered to sell their company to Yahoo.

[inscitekjeff]

This will not go down as one of Yahoo's biggest mistakes....this will go down as one of the biggest mistakes in all of business history. ie: If Microsoft was paying too much, then Yahoo should have sold!

[flickrz]

Biggest business mistakes? This doesn't even come close. AOL-Time Warner was the biggest business failure worth more than $170 billion. Look at the combined value of their assets now. BofA- ML merger can come next. Business decisions by Citi, Enron and the whole financial/auto industry were the biggest blunders. No doubt people have selective amnesia in this country. Yahoo at least makes, 400$ million a year in profit and doesn't need a bail out and probably will not.

[globalist_agenda]

What hourly rate did the "outside advisors" charge? $10,000 / hour? What did their T&E expenses look like? That's where the REAL money is, not slaving away as a software engineer. Getting your hands dirty is so 20th Century.

[sanenazok]

Yes staying in school and giving a damn seems to pay off.

[jd_in_sb]

Amazing. Yahoo PAID $79 million to LOSE $44.6 billion from Microsoft.

[pentest]

Yahoo didn't lose, they gained. They are still a company.

The only shareholders who lost are the stupid greedy ones(are there any other kind?). Yahoo said they wouldn't sell so those that hung on to inflated stock lost, and they deserved it.

[t8]

From $33 per share to 79 million out of pocket.
A lot of wealth has disappeared for Yahoo and especially now in the recession when they are unlikely to ever get an offer like that again.

[jackdaniels08]

...and the lowest stock price close for Microsoft , $16.15 since December 19, 1997! It would be nice to see Microsoft go below the $10 or even better below the $5 mark. Best of all of course would be to see Microsoft go to $0.

[cchenoweth6]

@jackdaniels

You must hate America. Anyone who could say that about one of America's tech giants is quite plainly an idiot. Microsoft, IBM, Apple, and many more have brought more to the economy then you could ever hope to bring.

I don't wish the demise of any company that creates jobs for our citizens.

[t8]

@ cchenoweth6

Microsoft must hate America according to your logic. No other IT force bar the recession has been so harmful to IT as Microsoft. By bundling their stuff and not supporting open protocols, they make life difficult for everyone except themselves. They deserve to become less relevant.

[compguru13]

@t8
false. While Microsoft *might* have limited other companies growth in the software aspect, their standard platform (microsoft office) has allowed for thousands of businesses to swap files without worrying about seperate formatting. Thats why the clear majority of business use Microsoft products, such as Windows XP. They've made life easier for everyone except their competitors.

[promytius]

Well next time keep me in mind; I have opinions too and I can make them as expensive as possible so that they will seem "valid" and "worth it" and $10k an hour is good...for openers - anyone want to join my consulting team, Bigfatwinners inc.? Paymeandloosbig Consultants?

[newnegotiator]

How much of this $79 million went to lawyers?

[pentest]

What does it matter?

[JCPayne]

Yahoo Microsoft would have been an ISP monopoly that would need to be split up soon anyways. On Verizon you're only allowed to choose Verizon-Yahoo, Verizon w/ MSN, and Verizon w/ AOL Broadband. Allowing two of those three to merge would have created a DSL monopoly....

[sshtdifferentday]

@JCPayne

Yahoo and Microsoft are not ISP. They are content providers to ISPs. Verizon would be the ISP. And with all the content that's on the internet, I doubt that would be a consideration for the DoJ.

[pentest]

At first I was against the merger, but in hindsight it might have the best thing.

The talent at Yahoo would be elsewhere after jumping ship and who knows what good would come from that.

MS would be burdened with a lot of code they don't understand taking years to do anything with.

They also would have lost a ton of cash, would be in debt. This would have put MS in the position they deserve to be in. They would be hurting very badly right now. The downside is that there would be 5-10 times more layoff than there has been thus far. Bad for those employees, however, anyone dumb and untalented enough to work for MS probably deserves the pain.

Another bonus, Ballmer would be gone for this blunder.

[jtjt145]

The American economy will be better off without the repulsive business practices of the monopolist Micro$oft. I for one do hope they are going down the gurgler.

[Inconnux]

Yahoo was an arrogant company for years it didn't care about its customers. At least they learned and fought off Microsoft. Yahoo could be treated like Ensemble studios if it sold out to Microsoft. Smart decision and money well spent.

[compguru13]

false. While Microsoft *might* have limited other companies growth in the software aspect, their standard platform (microsoft office) has allowed for thousands of businesses to swap files without worrying about seperate formatting. Thats why the clear majority of business use Microsoft products, such as Windows XP. They've made life easier for everyone except their competitors.