Yahoo's share price plummeted 10% in early morning trading on the NASDAQ stock exchange following news of a search deal with Microsoft.The NASDAQ had only been open for one hour as investors looked to drop Yahoo shares with trade volumes reaching as high as 12 million moves in the market. Volume is the number of shares traded in a particular security during a given period of time.
Microsoft and Yahoo! both announced a search deal where Yahoo search results will be "powered by Bing" starting next year. However, share prices aren't Yahoo's only problem from the new deal.
During a conference call for investors and media, Microsoft CEO Steve Ballmer admitted the deal had "been a longtime coming." He went on to explain that "both companies benefit from scale and better economics. Consumers really will get better products," Ballmer said.
Yahoo CEO Carol Bartz admitted there would be some redundancies for Yahoo employees. "There are certainly many Yahoo search employees that will be asked to take jobs at Microsoft as they integrate the technology," Bartz said. "There will also be search employees that we look to help us on the display side... And then unfortunately, there will be some redundancies in Yahoo." Bartz continued "there will be redundancies, but it will be in the future." Bartz did not estimate on how many redundancies there would be.
If today's early indications on Yahoo's stock are anything to go by then the company is in for a rough ride in the next 6 months+ until the deal is officially finalised and approved.
Image credit: Yahoo Finance
It has nothing to do with reduced competition. In fact, advertisers are praising the deal since it will provide better pricing (against Google), and Bing will be able to sell ads for higher prices since they have greater exposure.
The reason for the drop is the fact Bartz overpromised investors by suggesting she would not settle for a deal that did not have a huge upfront payday. Moreso, the terms for Yahoo seem a little weak and seems like MS clearly had the upper hand in the negotiations.
This deal doesn't reduce competition at all... If anything it creates competition. Prior to this there really was no competition against Google. Not that their on level playing field now or anything, but when was the last time someone other than Google had anywhere near 30% of the market?
No, it certainly reduces competition, because now there are only two big search engines, instead of 3. This gets rid of Yahoo search engine. The fact is that at anytime, bing or yahoo can start offering a better experience, and better options, and take business away from google. It is not like OS, it is very easy to move to a new search engine. Now, there is only Bing. Anybody trying to twist this as better competition is very confused.
The sellers expected a complete acquisition of Yahoo by Microsoft; the selloff was because that didn't happen. Though even at the inflated share price Microsoft could have bought all of Yahoo, they wouldn't because of increased scrutineering by the EU and US (not to mention every Tomas, Richard, and Henrietta software company based outside the US that competes with Microsoft in any area).
I'd much rather be a Microsoft employee than working for a ****ty company like Yahoo.
You are hilarious, absolutely no other news regarding Yahoo is relevant todays.
Haha, thanks. but I don't think I was funny,
Yeah, but you need to realize not everybody in the real world is in love with Microsoft. Microsoft have just had a bad quarter for them, people are starting to wonder if they know what they are doing. They are spreading themselves into a lot of industries, away from there core projects. When it looks like a company is going to falter, people expect them to concentrate more on there cores, in MS case Office and Windows.
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Huh? But fact is that the stock is falling due to a lessened confidence in Yahoo due to their MS partnership.
Wow, what an absolute lie. How far will you go in making stuff up to justify this. People don't have confidence in MS anymore. They messed up with Vista, Zune has been a failure, and xbox is yet to turn a profit. They have sunk so much into search, to early to see how that will go. Windows mobile is falling way behind everything else.
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If that makes it easier for you, but the fact remains most Microsoft "partners" end up getting hosed in the end. Without even trying I'll just toss out all their hardware partners for "Plays4Sure" but there are so many examples it's really hard to deny.
And why MS needs to get into the search market and so far out of their core competency is beyond me, and judging by both stocks today, beyond any reasoned investor. This isn't some great news, it's just another example of MS flailing about with more "me too" products.
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Huh? But fact is that the stock is falling due to a lessened confidence in Yahoo due to their MS partnership.
Fact's based on what proof??? IMO the stock has dropped as has been repeatedly said, some people bought early, ever heard of "insider trading"? yes illegal but does happen, once the word is out to stockbrokers they buy, buy buy that's what pushes the prices up, this then makes the news, and the relative companies release a PR statement. In this instance these *cough*individuals, realised taht the stock price will not provide the big pay out they wanted, not to mention the shares in Yahoo Apple held that they will have immediately relinquished.
Yahoo faced many problems this year. They closed down dozens of their services including their famous social network Yahoo 360. I think it was better for them to take the Microsoft deal at the first place last year.
As the news story is right to imply, it's related to the agreement - but the agreement has many aspects. Picking one and running with it as the sole reason for the change is silly.
Although personally I don't see what anyone likes about Yahoos search. I never use their search engine, its not that great. But then again I hate anything Yahoo related, they are a scumbag company.
I would love to hear your reasons why you think this?
I think yahoo came out of this not too bad, they use bing, so they don't waste resources on developing there own search engine. They also take over ALL search engine advertising, including Microsofts. So Microsoft won't be offering advertising anymore.
Nothing they did, felt right.
Nothing they did, felt right.
I've found that Yahoo Search (which I still use as the default, even with Windows 7) yields fewer irrelevant results than Google (which is why I refuse to use Google search, even on Linu
This makes no sense at all. So they have a decent market share, but somehow you feel they are losing their influence. Yahoo is actually one of the biggest sites on the net, it has the number 1 news site, number 1 sports site, number 1 finance site, number 1 in a lot of areas.
As above, my original statement was regarding the Yahoo name as a search product. Their other services are a different matter.
Everything Microsoft touches...
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