Google-Yahoo and microsoft...

Introduction

This paper deals with the plans of Microsoft to acquire Yahoo in a merger and partial alternate plans. It then goes on to discuss the Yahoo-Google deal and its repercussions. Microsoft as we know is the world’s biggest manufacturer of Operating Systems and Google is a company which has radically revolutionized the concept of internet searching. When both the companies are after one particular company it sure provides a good topic.

Microsoft’s Proposal:

On February 1, 2008, the computing giant Microsoft Corp. has announced a proposal to overtake and acquire the outstanding shares of Yahoo! Inc. The bid was made for an approximate amount of about 44.6 billion dollars, in other words a $31/share offer. This offer represented a 62 percent premium over the closing price of Yahoo’s stock on Jan 31, 2008 which was $19.18/share.

In the proposal made to Yahoo and directed to the Chairman of Yahoo, Roy Bostock and the CEO Jerry Yang, Microsoft has put out an offer to acquire all outstanding shares payable in the form of cash or 0.9509 of a share of Microsoft Common Stock. The proposal made it clear that the shareholders would be provided with the choice to take up cash or opt for the other form of payment. This option was subject to pro-ration so that on an average half the shares will be converted into Microsoft shares while the other half will be converted into cash. While making this proposal, Microsoft quoted that the primary reason for its proposal was to create a competition in the field of online search and advertising and thereby providing its consumers a choice among better products. There was also a fleeting mention of the fact that the current search industry was like a monopoly (Google).

The other reasons which Microsoft quoted were to improve the Scale economics in advertising platform, a chance for a R&D expansion, and the need to eliminate redundant infrastructure and duplicative operating costs. Microsoft hoped that the proposal when accepted will result in the outcome of a company which can help its shareholders enormously.

Yahoo! Uptight!

Yahoo always believed in its potential to make it big in the internet market. The market share of Yahoo was about 23.7% when it came to the search market. Microsoft had a market share of 9.8% of the search market, with Google in the lead with about 58.4% market share. Yahoo has been maintaining this market share in the search department for quite a while and saw no reason why there would be any loss in the near future.

On the other hand Microsoft’s offer was counting on the slump in the share value of Yahoo over a period of time. In fact, Microsoft’s offer to acquire Yahoo is not a new love. Microsoft has been a persistent suitor of the Microsoft-Yahoo marriage for quite a while. The offers have been made earlier in 2007 when there was a slump in the shares of Yahoo . But Yahoo, seeing a bright future ahead did not entertain all those advances.

When the previous chairman of Yahoo, Terry Semel stepped down, following an unprecedented slump in Yahoo’ shares, Microsoft decided to seize the opportunity and pushed hard for the alliance to be finalized. The CEO of Yahoo, Jerry Yang though, was not all that enthusiastic about the offer, which put a premium of about 62% on each market share. He decided to push it to the limit and demanded that the price be set at $37/share. Microsoft felt that this price was too high and decided to not hike the offered price and on receiving news that the offer has been refuted, decided to go to the extent of a hostile takeover of Yahoo and was pretty confident in its stand regarding the issue.

Noteworthy:

A merger of this sort would have helped Microsoft in reducing its market losses in the online services from about $949 million to a net loss of about $289 million. Regardless, Microsoft’s reach to the customer base would have increased phenomenally and with its new-in-line advertising products and prospects, Microsoft decided for the merger anyway.

Another very interesting point is that, Microsoft was ruled by a federal district court in Washington in 2001, to have repeatedly been violating the law by stifling any competition posed by the browser, Netscape to IE. Microsoft is still being monitored by those antitrust laws. With this background, it only seemed extremely ironic that Microsoft was happy that Google was the only company which could not acquire Yahoo in the market because it would create a market monopoly and such an action would be against the Antitrust Regulations.

Personally, I feel that Yahoo should have taken up the offer. This would have yielded its shareholders very good profits. Again, the merger even in the case it happened would have started profiting the parties after quite a time. Meanwhile, Yahoo would not have lost anything except its independence (which might be good or bad, depending on how you see it)

Google the spoiler

When Microsoft started aggressively pursuing its offer, Google decided to buckle up and go against it. So the CEO of Google called up his compatriot at Yahoo and voiced his support to help protect Yahoo from Microsoft. At the same time, the Google lawyers started preparing a case against the deal for the lawmakers in order to prevent a deal (even if it happens) from materializing.

Amid all these issues, the deal which Microsoft assumed would have been smooth and soft turned out a very sticky affair. Microsoft sensed that the deal was not going anywhere (which, of course was right….). So, Microsoft walked away from the deal.

And Microsoft was right in doing so. After all, if Microsoft could have invested $44 billion in a slow, losing internet Search Company, it could have well bought the remaining market share with all the money it was putting in. The merger would have been a distraction to say the least.

The Aftereffects

Yahoo having refuted the deal with Microsoft was not to take the break-up a success. In other words many of the shareholders started to view the decision of Yahoo as more like “trigger-happy” than anything to do with business.

Let me get you clear on this. The market value of Yahoo-shares was about $19.95/share the day before the Microsoft proposal came in. The day the proposal was made official, the market share of Yahoo reached close to $26/share. But Yahoo insisted that the offer reach up to $37/share, which was pretty unreasonable even looking at the share value of $30/ share. So when, Microsoft moved away from the deal, the share value slumped down by 10% in the NASDAQ market and finalized at about $23.52/share. This drew the wrath of the shareholders, who along with some of the board representatives were in support of the Microsoft deal. There was an ever rising discomfort and distant grumbling with everybody hinting that it may be the time for a new CEO.

This pressure played a key part in deciding the next step taken by Yahoo.

An Interesting Development

Microsoft has made it clear to Yahoo that it was not into buying Yahoo outright anymore, but proposed an alternate proposal which would buy only the search and advertising part of Yahoo. This alternate proposal, though it priced the value of Yahoo’s shares at more than $33/share was not convincing enough for Yahoo, because it did not believe that dividing the company into parts would favor the company’s growth in any way. With the pressure to chalk out an alternate path for the company mounting, and the bid for a hostile take-over by Microsoft looming around the corner, Yahoo! Inc. did something it has always been against since the company’s inception.
Yahoo! Inc. decided to launch an online advertising test with Google. This was supposed to be for two weeks with the Yahoo! Website displaying the Google ads alongside its ads on its web pages. Finally, on 6.13.08 Yahoo made an announcement after the conclusion of talks between Yahoo and Microsoft finally. Google and Yahoo have decided to work together on a “non-exclusive” agreement which allows Yahoo access to Google's AdSense for search and content advertising programs in the U.S. and Canada. The deal was for 10 years with an initial 4 year program followed by two 3 year renewable programs. Jerry Yang expects this deal to generate revenues of around 800 million annually.

Google was fairly confident that the antitrust regulations would not affect the deal because the deal was not that of a merger, but merely a way for Yahoo to use Google’s ad-sense programs to gain access to Yahoo’s advertising programs. Google and Yahoo have also decided to integrate their Instant Messaging clients.

Noteworthy

Google and Yahoo devised the deal so that a break-fee of about 250 million dollars will be triggered in case any company decides to acquire the company (pointing to a hostile takeover by Microsoft) in the first two years of the merger.

Yahoo and Google decided to go ahead with a three and a half month wait so that the Department of Justice (DOJ) can evaluate the deal and see if it meets the antitrust regulations.

Antitrust

The deal between Yahoo and Google is perhaps the most defining step in the world of internet till date. The deal should be watched closely as to the effects it has on the way people receive information and see the world. This is essential because we should not regress into the times where the information we receive and hear is defined by a few select individuals or conglomerates. The Yahoo-Google deal with about 90% market share has the ability and the incentive to do just that, if not more.

Search engines being the most prominent ways to internet surfing, a deal of such sorts could extremely limit the choice of the users or could trick users into seeing and using the internet the way the companies want to. In effect, such a deal could amount to, and end up making the field of search advertising a monopoly.

With the two major advertising giants hand-in-hand there is little scope for competition and there is an imminent danger that such a situation might yield an unhealthy market with high costs for advertising and limited choice. The way search advertising works and the way search queries work are completely different with a seamless integration between the two. The normal search queries are unpaid and are present in the page. The advertised results, when clicked, require the advertiser to pay the stipulated amount to the service provide (Google or Yahoo, as far as the deal is concerned). Google’s way to advertise is not transparent and has a potential to influence the auctioning of the ad-spaces thereby influencing the whole market.

The deal hints at a provision which might end up setting the price floor. This is because the provisions of the deal point out that Yahoo will rely on an ad which will fetch a higher price, in other words monetization. Google can sell search ads on Yahoo whereas Yahoo cannot sell search ads on Google. And with “price floor” concept mentioned this could be a menacing prospect with Yahoo only advertising higher revenue generating ads thereby monopolizing the search advertising. Also with this, the search advertising platform “Panama” of Yahoo might phase out in competition to Google’s own platform.

The deal is such that if Google earns more, Yahoo does too. If it loses some, Yahoo loses too. So, from any angle, Google is not losing out on anything. The situation is always a win-win for Google.

Unbiased View of the situation

Google started out as an independent company with a reputation to promote openness at a time when Microsoft was a major conglomerate which had the ability to reduce or eliminate competition. Google started out as a search project and expanded its horizons to search advertising, and pervaded the web with features like IGoogle, blogspot, free email and many other social web features. This was a field relatively unexplored by Microsoft. The entry of Google into the search market and its introduction of Google search was like a fresh breeze wafting into a suffocating room.

Microsoft’s antitrust practices were exposed and the company is being monitored so that it does not indulge in any such things anymore. Though the openness of Google is very important, with the growth of the organization and with Google not making any promises to protecting the safety of user, all the users of the services are at a potential risk of being exposed because of this openness. And with Google dominating the scenes now more so than ever, there is a tiny tinge of doubt…”What will happen if this huge giant suddenly loses it?”

Microsoft on the other hand is fast becoming a corporation which can reach out to people because of its venture into the market with products like Xbox, Zune. Another reason why Microsoft is not as scary is because there is a competitor now, Google. Microsoft is out of spotlight and speculation now and it seems that Google has taken its place. And with Bill Gates stepping down in the near future, the image of Microsoft is never going to be the same. It can cast away its image as a possessive goliath.

You can say all this but in reality, there really is no way to trust Microsoft with privacy. The company has time and again proven that the only thing which interests them is their own interests. But the time of speculation is here. Will Google walk the same path as Microsoft? Or is it already down the road? Another one very important question is whether it’s Microsoft steering the opinion of the people against Google. Or is this all just speculation?

This merger between Yahoo and Google has a potential to ruin and completely manipulate the market as we know now. It puts Google in the position of an internet behemoth with a very high incentive to go berserk. The situation is downright scary. If you are not scared yet, you have every reason to be. If this deal goes through, all we can do is believe in Google and hope it does not put its interests over those of its users.

The Morning.....

I admit i have had my fair share of mornings. Ones, which i woke up to the beautiful but lonely call of a cuckoo for its mate; ones with the crows cacophonous brawl over morning pickings; some, i woke up shitting in my pants cos i suddenly remembered about some portion of the exam i did not cover; while some, I was half awake with a zillion things on my To-do list but stupidly smiled and silently said "Fuck You", which it turned out later should have been the other way round.

Today was more cranky than ever. I woke up for my labbie shift( the best job in RIT. Ask me for reference if you need it. No assurances!! My reference may not help you much though :P) which was like s0ooooooooooooooo early in the morning, I was promising myself i would never take up a morning shift again(EVER). My head somehow managed to drag the rest of its anatomy out of the bed into the loo. when i returned, my crankiness just happened to discover a whole new level to it when i realized my lappie shut down halfway through a download i started the previous night. I gave up and rushed through with my things to catch the bus. I had to eat some breakfast before i could live through the rest of my day. I filled my thermos with some hot milk and was about to rush when i accidentally opened my fridge up and picked up a piece of chocolate cake and took a bite.....

The chirping of the sparrows, the sweet nostalgic breeze bringing the memories back woke me up.. i realized i was transported to the heavenly world of chocolate.. That ever eluding heaven which manifests when you take a bite of the chocolate cake( the one with layers of cream in between the cake and the chocolate chips so many spilling out like the ripe breasts of Eve..) I forgot everything-- my job, my bus, my shoes ----- was just standing there greedily gulping down one bite after the other and then waiting for a sec savoring it, just that split second ride to heaven; warm and wet in my mouth, melting down... and breaking into a cadence in my mouth, a soft but smooth-- ever teasing symphony---

the alarm in my phone brought me back.... I put my shoes on and ran, happy to find some guys in the bus stop, knowing i made it in time.... I reached my lab and opened it up. Now, i am at the end of this post... listening to "Dooba dooba rehta hoon baaton mein teri"-by silk route... thinking it could not have started out better....

The Mummy III : Tomb of The Dragon Emperor... Review

This movie should be commended with respect to what it has accomplished. It has redefined the very meaning of the word “aimless”. The movie falls short of all expectations, right from the casting to the plot, screenplay and the action sequences. It is a slip-shod work of sorts, and if I called it desultory, absurd and a complete waste of time, trust me, I am still being sympathetic.

The cast is so out of place, you would think Rachel Weisz walked out of the movie at the very last moment and they cast the first person who was a bit old,seemed like 45 and was a woman (Maria Bello). The pair of Brendan Fraser and Maria Bello could not recreate the chemistry between Rick O'Connell and Evelyn Carnahan-O'Connell. It was so completely bland and revolting, I felt like puking when they were kissing each other. Then there was this guy who apparently was supposed to be the son (Alex played by Luke Ford) of Rick O’Connell, who, to me looked older than the guy who was his father.

The standards set by all the amorous and sensual ladies in the previous Mummy movies, who in themselves were a reason enough to watch the movies, were shattered with Isabella Leong in the lead as Alex’s love. I did not understand why they were in such a hurry to fall in love with each other, especially when the lady tried to kill him only some 20 minutes earlier in the movie.

I dutifully chose to ignore all these glitches for what I thought would be a true sequel to the Mummy series ---- an awe-inspiring, jaw-dropping, nail biting zombie movie. And with Jet Li and Michelle Yeoh in the movie I was warming up to watch a kick-ass kung-fu zombie flick. Boy Oh Boy!!!!!!..... Was I in for a surprise……

Jet li was the most happy-go-lucky zombie I ever had the chance to lay my eyes on. He did a job a zillion times better in “The One” as a villain. Michelle Yeoh looked as if she was older than the 2000 years she was purported to be. And I never got to know why Jet Li was the dragon emperor, and why in the world was there only one tiny knife which could kill him. Jet Li had nothing to do except smile like a stupid ass, Michelle Yeoh had nothing to do but become weak when she ought to fight or kill herself for a stupid knife, and Isabella Leong had nothing else to do than try to look stone faced. After watching the action sequences in the movie, it felt like the director was all determined to not let any Scary Movie spoof it, so he went ahead and ridiculed himself.

All in all, an utter waste of time, watch it if you want to end up brain dead.

Rating: 2/10

First steps in the US

I felt out of place. There was a guy sitting beside me with some sort of a polka dotted cloth wrapped around his head, with a long white gown covering him from top to bottom. Were I not, at one point of time, an ardent fan and zealous follower of Indian cricket with all their matches played in the Sharjah engraved at the back of my mind in stone, I would not have placed him as one of those wealthy Arabs i always see in the stands... Given my curiosity abounded by anxiety, it was difficult, no, near to impossible to not stare at the Arab gentleman seated beside me. And then there was this pretty brunette who walked upto me and asked me if she can get me a drink. I tentatively looked at the Arab(quite a foolish thing to do in any situation), as if passing the favor onto him. He was a bit puzzled but was extremely gracious and primly said, "Water". I wanted to play it safe too, so i asked for the same. But i was now feeling even more out of place.

Why would i not ? I was sitting in the business class of the Air Emirates, when i booked an economy class ticket, and was with an Arab Gentleman on my left, a very frighteningly posh woman of around 30  with a 7 year old son sporting "I know all about you" evil smile on my right. His endless demands and her harsh chidings(which would have shut me up like a frog faced by a snake, had no effect on him) were getting on my already "freshly out-of-India-To-US" nerves. But i pulled myself together and tried hard not to freak out.

 I was silently observing the kid because, i did not want anybody to know this was my first flight, and he seemed to be the easiest quarry around to help enlighten me using the flights facilities. This was also because i realised i  could not observe the mother without sending the wrong message, or scrutinize the arab without expecting to encounter a blood curdling yell like "Saale dekh kya raha hai".

 But the kid proved more of a challenge than i expected him to be. He pulled the headphones out from mid-air and started playing a videogame. I was sitting there like a rabbit on which the magician has pulled a trick on. So i gave up, followed suit, and fell asleep, just like the Arab.

I reached Dubai eventlessly, and as soon as i set foot in the magnificient Dubai Airport i was herded down to another terminal where my next flight was set to take off from. I was righteously indignant of the delay of my flight to Dubai that deprived me of the wonderful sights to behold. No, I should be honest, to be deprived of the colorful melee of the pretty airhostesses walking around in their so very sleek looking uniforms. Nevertheless i did not lose sight of my destination and hurried towards the terminal i was directed to. 

After I boarded the connecting flight to JFK, I finally felt at home in the economy section and was extremely and stupidly happy to find that my neighbour was a pretty helpful guy( a pakistani) and he helped me find and gather everything i needed(my nerves included). After  a gruelling 12 hour ride and 3 bollywoood, 2 hollywood movies later, with fits of sleep in between i was asked to put my seatbelt on and learnt that i was about to step in the US of A. I was frantically and very hopefully searching for any sign of familiarity(I was looking for the statue of liberty) from all the movies on Newyork i watched, hoping to find that anchor which would help me relate to America in the minutest way possible, until in the end failing to do so.  

I honestly felt lost. Here i was, waiting in line for the security check at the JFK airport, all of a sudden realizing that home was half the world around, 18 hours distant, and atleast a 50,000 rs costlier. 

Wearily, I moved along the line, taking a little respite from a kid dancing hip-hop style. I was at the security check point very soon and the security directed me to a room with a lot of chairs in two rows as i entered, and i breathed in relief when i saw a group of people sitting there just like me. 

At the far end of the room was a platform, high and shielded by glass (bulletproof, I assumed ). There were officers behind the high tables checking passports. I took to chewing my nails(as is my habit when i think furiously or am tensed), which stood upto their duty and served me faithfully. A name was called forth and it took me a good 10 seconds to realize it was my name. 

The Guard was a bit pissed off by my late response.

G: "Are you Mr. Vidyaranya Gujju?"

Me: "YES"

G: "Is this your first visit to the US?"

ME: "YES"

At this point of time, i was trying to keep my responses to the minimal acceptable level, because i was desperately trying to keep away the panic from keeping into my voice. The guard was not one to back down, though.

G: "And what are you doing here in the US?"

Me: " Ummmm..... I wanted to do MS in Rochester Institute of Technology"

Now came the trickiest question of all

G : " Why did you not take a connecting flight and go to Rochester directly?"

       I waited for a moment. I dont recall who, but i would have gladly traded anything to put a bullet in the head of that bastard who told me that i should not tell anybody(especially the officers) i have relatives in the US. I was painted a picture that if i did so, i would immediately be categorised as an immigrant and deported back to India. I took this seriously in all my naivete and so was thoroughly against the idea of tellin the guard that one of my relatives was supposed to come pick me up in the JFK airport.  So i told him,

" I did not get a  reservation to Roc(rochester) directly, so i decided to take a bus from here to ROC." 

The guard gave me a horrendous version of " Are you kidding me?" look , mainly because the heavy indian accent seemed to blow him off and said" say that again..."

And so i did.

This time he looked at me , my passport held in his hands, my I20, and the whole room all at once and his expression changed to an even more frightening " Do you think I am an Idiot?" mode . When he spoke, his voice was thick " What you say does not make sense." He turned to his fellow officer and said, " He says he did not get a reservation to Rochester, but the ticket says he could have. This is not making any sense".

By now all my alarm bells started ringing in high alert. All my emergency detecting antennae started twitching furiously.

He turned to me, " You are not making any sense", he threw my passport along with the I20 towards me and said " YOU ARE DONE"

This to me sounded like an apocalypse's prediction of certain torture and deportation. So i gathered a bit of my all over guts and said " I do not understand"

He replied " YOU ARE ALL SET. GO NOW"

I was in the feeling that my years of reading English novels would have somehow prepared me for this confrontation. As it turned out, i was completely wrong. When he said " You are done" i literally and truly translated it to " tera kaam ho gaya" or " nee pani ayyipoyindi." By now i was prepared to be escorted by a bunch of officers to a dark cellar with no light or windows and to be put through an endless barrage of questions. 

But nobody appeared out of the shadows.  It took me another 10 seconds to realize no one was going to. So, slowly and unsteadily i stepped back and started walking out of the room, expecting a hand on the shoulder anytime. None came. I went ahead, reassuring myself that i would not have made it out of the room if i were to be deported. So, slowly i kept on walking as if my very survival somehow depended on the fact that i was still walking, until i reached my luggage, found all three of the suitcases and managed to get them into a trolley, then made my way out onto the huge waiting lounge in the airport. 

I decided to wait for the person who promised to pick me up at the airport. So i decided to call him up. I asked a security officer to look after my luggage, for which i was sternly admonished to not leave my luggage with anybody at all. So i trudged along with it and managed to secure a seat. Then i bought a calling card and tried to call my pick up hero. 

I expected to hear a male voice,but was greeted by an extremely courteous female . She asked me to leave a message. I realized that the phone was switched off. By the time i was able to reach my cousin, which was an hour and a half later, my nails were reduced to extremely tiny invisible things and extremely painful too. To my complete relief, he picked up his call and told me that he should be there to pick me up in about an hour. He came eventually, in about two and guided me all the way out of the airport, onto the subway and then onto a waiting bus at the newyork port authority bus terminal. I left for rochester with an extremely zealous and friendly English Man by my side and slept preparing myself for the events unknown............ 

Ahem.......... The Dawn of the DON....

Phew!........ somebody told me that writing a blog should be a mundane activity. Not that I listen to everyone, in fact, I do not listen to anybody . But there was a difference here, you see. That somebody challenged me, to be more accurate, wheedled me into writing this blog. Supposedly, writing should be spontaneous and not something you do when you feel like it. I , who am a narcissist, and someone who shows off his ego, took this as a personal affront and started writing.Now that i have written a little and enough to get out of the classification of "not able to write", my ever-lazy mind asked me to stop and say bye for now.
Bye