04.06.08

Microsoft Fires Up Proxy War Against Yahoo as Debt Looms Over

Posted in Finance, Google, Microsoft, Open XML, Search at 1:50 am by Dr. Roy Schestowitz

When it’s cheaper to corner and squash rivals than to make better products…

In the previous post we showed an attack by Microsoft against a prominent figure. Microsoft made it personal. This was intended to promote Microsoft’s business interests. It also serves as a warning sign to anyone else who ‘dares’ to question OOXML.

We promised to write some more about Microsoft's proxy fight against Yahoo because not only does it bear a resemblance to the above only at a larger scale, but it also intensified yesterday. In case you have not seen those development in the news yet, here are a bunch of headlines with accompanying snippets.

1. CNET: Microhoo: Ballmer takes off his gloves

What Ballmer means: Jerry, you are making us both look bad. It’s time to get in gear, and if I have to bring on the irate dancing monkey and go straight to the shareholders, I will.

2. Wall Street Journal: Microsoft Threatens Yahoo Board With Proxy Battle, Lower Bid

Microsoft Corp. Chief Executive Steven A. Ballmer threatened Yahoo Inc. directors with a hostile takeover of the company if they don’t reverse course and agree to a deal within the next three weeks.

You will find some more details in this most recent update from CNET.

Microsoft on Saturday issued an ultimatum to Yahoo, giving the Internet search pioneer three weeks to enter formal merger negotiations and conclude a deal.

The software giant threatened to launch a proxy fight to unseat Yahoo’s board of directors, as well as take its case straight to Yahoo investors should no deal be reached in that period.

And as a further cattle prod in getting a deal consummated, Microsoft threatened to lower its existing bid, citing how Yahoo’s value will be hurt if it needs to resort to such hostile means.

“It’s all very similar to what you find in those infamous OOXML abuses, wherein Microsoft just sets the deck and games the system…”This is not exactly a topic for us to cover because it’s broad and would most likely prove to be a distraction, but if you have watched this saga since the beginning, then you would know that Microsoft urged various parties (proxies) to legally assault Yahoo and apply pressure to it. Additionally, Microsoft tries to grab seats on the board (squeezing in ‘insiders’, potentially secretly, according to last week’s reports) so as to make Yahoo more ‘compliant’ until it re-evaluates the offer, this time deciding ‘properly’.

It’s all very similar to what you find in those infamous OOXML abuses, wherein Microsoft just sets the deck and games the system by ensuring only obedient people are to vote, or at least a sufficiently-large majority of them. Watching what Microsoft has done to Yahoo so far is painful because the tactics are truly appalling.

Listed below are headlines we have accumulated and they are sorted roughly chronologically to tell you the story so far:

For those who still believe that a Yahoo takeover would be a ‘win’ for Microsoft (like the OOXML 'win'), consider the following article which appeared in Forbes just over a fortnight ago. Of interest:

Co-founder Bill Gates can’t be thrilled with watching Ballmer drain the company’s cash. He didn’t get so rich by buying at the top of the market.

Going a little further back, watch the detailed article from Reuters:

Microsoft Corp said on Monday it may borrow money for the first time in its history to fund a portion of its $44.6 billion unsolicited offer for Yahoo Inc.

Or from Glyn Moody:

The rest of the $44.6bn (£22.3bn) deal would be financed with an undisclosed amount of credit.

What that means is that it must squeeze as much money as it can from its operations to fund that debt and still pay dividends to shareholders, who will be looking for some payback from the Yahoo takeover. Giving away software is the last thing it would want to do in these circumstances, and
the DreamSpark announcement shows just how worried it is about the future.

We wrote more extensively about Microsoft financial issues right here. Do not be misled into thinking that Microsoft can defeat Google quite so easily. It can cause harm to some competitor, albeit at a hugely high cost.

To reduce expenses, Microsoft reaches out to foreign labour. We wrote about this recently in order to show that Microsoft uses nothing but excuses and resorts to truth-bending in order to justify its actions (mocking Americans’ intelligence in the process). Here are a couple of picks from the latest news. What you see here is a form of blackmail for visas (c/f other forms of Microsoft blackmail in [1, 2, 3, 4, 5]).

Visa woes? Microsoft has Vancouver, B.C.

The majority of those workers are graduates of U.S. universities who can’t stay in the country because of visa issues, said Microsoft spokesman Lou Gellos. Another 15 percent to 20 percent are from Canadian universities, Gellos said.

Who Got H-1B Visas Petitions Approved Last Year? Look At The List

The top 25 H-1B visa recipient companies contacted by Durbin and Grassley this week include Infosys, Wipro, Satyam, Cognizant, Microsoft, and Tata.

Marketing is the art of hypnosis. Microsoft is doing as well as it manages to have you believe it does. Learn not to trust what you are told about Microsoft by the press and the analysts whom it cites. Microsoft is a lot more fragile that most people realise. █

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