Microsoft Says it Has Plenty of Jobs for Microsoft, Yahoo Employees

Microsoft says it has incentives ready to retain its employees and Yahoo employees if the takeover goes through


Microsoft and Yahoo have been rivals in Internet search for years. While Microsoft has grown and maintained its profitability, Yahoo has seen a drop in stock prices and a loss in market share.

DailyTech reported in February 2008 that Microsoft made an unsolicited offer of $44.6 billion to purchase Yahoo. The $44.6 billion offer placed a premium of 62% on Yahoo stock breaking down to about $31 per share.

Yahoo’s board rejected the Microsoft offer saying that it undervalued the company. After Yahoo rejected the offer, Microsoft moved ahead with plans of a hostile takeover of Yahoo. The takeover made some employees within both Microsoft and Yahoo fearful for their jobs since an overlap of positions would be expected if the merger happens.

Reuters is reporting that Microsoft president of platforms and services division, Kevin Johnson, sent an email to employees in his unit saying that Microsoft will dedicate “significant rewards and compensation” to retain both Microsoft and Yahoo employees. According to Johnson, “While some overlap is expected in any combination of this size, we should remember that Microsoft ... has hired over 20,000 people since 2005, and we would look to place talented employees throughout the company as a whole. We have no shortage of business and technical opportunities, and we need great people to focus on them."

Yahoo issued a statement earlier this week that it put generous severance packages in place for any employees that might lose their jobs if the company was sold. The chance of Yahoo being sold must be increasing considerably for Yahoo to admit that such severance packages were in place already.

Reuters also reports that two pension funds have independently sued Yahoo and its board of directors for refusing Microsoft’s offer. According to the suit, Yahoo is pursuing other possible deals that are not as beneficial to shareholders as the Microsoft offer.

Microsoft Makes Windows XP SP3 RC2 Publicly Available

Microsoft opens the floodgates for XP SP3 RC2


While Windows Vista Service Pack 1 (SP1) has received the bulk of the attention for the past few months, there's another service pack eagerly awaited for Windows users: Windows XP SP3.

Microsoft released SP3 to testers last week, but the general public can now download the service pack via Windows Update. Users have to first download a small registry file from Microsoft which gives them special access to Windows Update to download SP3.


"The script sets a registry key on your system. The registry key is required for Windows Update to recognize your machine as a valid target for Windows XP Service Pack 3 RC2," states Microsoft. "It is recommended that you apply the resulting update package to an activated, genuine copy of Windows XP, in a test environment."

Users are also asked to remove any previous beta or release candidate versions of SP3 before proceeding with the latest update.

Some of the new functionality included with SP3 include Black hole router detection, Network Access Protection, Credentials security service provider and the Microsoft Kernel Mode Cryptographic Module.

Microsoft says that the RTM version of Service Pack 3 will be available during the first half of 2008. If all goes well with RC2 testing, we should see the final code shortly.

Microsoft Calls Yahoo Rejection "Unfortunate," Pursues Hostile Takeover

Microsoft plans to take its bid for Yahoo directly to shareholders


In the world of mergers, there are numerous levels of "hostility" which characterize bids. There are unilateral talks, mutually agreed upon, which are typically labeled as more germane, even if one company ends up absorbing the other.

Then there are unsolicited bids, such as Microsoft's initial offer to Yahoo, which are often labeled as "partially hostile". On the far end of the spectrum are "fully hostile" bids, in which one company tries to bypass another company’s executive and board leadership by offering a buyout directly to shareholders. Among the famous examples of takeovers considered "hostile" was the HP and Compaq merger, which passed by a meager 51% margin in a shareholder vote.

Having been rejected by Yahoo's board, Microsoft commented that it was "unfair" that Yahoo did not embrace its "full and fair proposal to combine" the companies. Now, Microsoft indicates it is planning to bypass the board and take the issue directly to a shareholder vote. Microsoft states, "We are offering shareholders superior value and the opportunity to participate in the upside of the combined company. The combination also offers an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market."

Microsoft's statement continues, "The Yahoo! response does not change our belief in the strategic and financial merits of our proposal. As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal."

The decision by Microsoft to pursue a fully hostile takeover is truly a sign of the times at Yahoo. Yahoo despite promising big changes continues to lose ground to Google in search engine market share, which in turn leads to sinking advertising profits. The company dismissed 1,000 employees recently. Yahoo aggressively acquired companies throughout last year, but its investments left it with little to show for it.

The hostile bid by Microsoft may nix a future board-arranged merger with Yahoo, but at this point it may be a moot issue. If Microsoft has to, it can simply wait out the company until it falls further towards its demise, though it would prefer a quick merger while the company still has some vitality.

Yahoo has a lot to offer Microsoft. Despite its dropping search engine share, Yahoo still represents a significant portion of the market and a major market name. An alliance with Microsoft could establish a strong competitor to Google. Further, Yahoo has a wealth of intellectual property, domain names, and other assets that could come in handy to an ever-evolving Microsoft.

The board is left to ponder Microsoft's words, and their significant decision -- as it may be their last.