May 3, 2008
Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Dear Jerry:
After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.
I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.
I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.
In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.
Also, after giving this week's conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.
We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:
•First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.
•Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.
•In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.
•This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.
•It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.
Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.
We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.
I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.
But clearly a deal is not to be.
Thank you again for the time we have spent together discussing this.
Sincerely yours,
/s/ Steven A. Ballmer
Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation
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亲爱的杰瑞:
经过三个月的时间，我们已经就微软与雅虎可能的合并事宜形成了最终意见。
首先，我谨在此表达个人对于你、雅虎管理团队以及董事会的谢意，感谢贵方对于微软建议的充分考虑，并在此事件中投入的时间与精力，我尤其要感谢你个人的努力。本周的讨论使我觉得受益匪浅，并第一次真正理解了问题与希望所在。
对于雅虎没能接收我方建议，我深感遗憾。早在1月31日我便致电给你并提出了合并建议，因为我相信双方的合并能够给各自的股东创造真正的价值，也能够给市场上的消费者、出版商以及广告客户带来更多的创新与选择机会。我们提出的62%溢价也体现了这些观点。
在本周谈话中，我传达了微软的意愿，同意将收购价格提高到每股33美元，再次体现了我们对于本次合作机遇的认可。与此前建议相比，这次提高报价将为雅虎股东带来50亿美元的额外收益。与1月31日雅虎股票收盘价相比，新建议溢价达到了70%。但新价格显然仍与贵方期望存有差异，雅虎最终要求微软再次加价50亿美元，即每股33美元基础上再增加至少4美元。
此外，经过本周的深入沟通，我清楚认识到微软不宜直接与雅虎股东讨论收购事宜。上述方法将导致旷日持久的代理权争夺以及交换收购。经过双方讨论，我们认识到，目前你将采取的措施将增加微软收购雅虎的难度。
对于你的反恶意收购措施，我们也非常关切。上述新的措施将雅虎的关键字搜索付费业务外包给了谷歌。在我们看来，与谷歌的上述安排显然增大了我们收购雅虎的难度，主要原因如下：
首先，上述措施从根本上动摇了雅虎自身的战略与长期发展动力，广告客户将纷纷放弃雅虎的Panama搜索广告系统，转投谷歌的平台。这还损害了雅虎的搜索与背投广告战略以及生存空间，动摇了背投广告的根基，不利于长远发展。
第二，上述措施不利于雅虎在广告业务系统方面保留高素质的技术团队，这也是我们在提出合并建议时的重要关注点。
此外，雅虎的举措还可能导致法律与监管问题；而包括微软在内的任何一个收购者都不会对此熟视无睹。上述措施将进一步巩固谷歌的市场统治地位，从而削弱了竞争，减少了市场选择机会。
由于贵公司的举措，谷歌在自身及雅虎平台的关键字搜索业务都拥有了定价权，从而能够在执行过程中提高雅虎广告客户的收费。且不论由此而来的法律问题，这种做法从商业上也殊不可取，除非有一方希望通过此种途径退出搜索广告市场，以成全谷歌的坐大。
对于其他非谷歌平台的搜索业务提供商，贵公司的上述举措也等于提前关闭了合并之门。
一旦发生代理权争夺或换股收购，贵方可能采取上述举措，这也促使我们审慎决策，避免上述情况的发生。因此，我正式撤回微软对于雅虎的收购建议。
微软将基于现有的高素质团队，以及与其他业务伙伴的战略合作，继续保持发展，积极创新，扩大业务。
我仍然坚信微软的收购建议是目前雅虎股东唯一的选择，能够充分体现雅虎股票的公正价值。由于未能与我们达成协议，你及各位股东公开放弃了这些重大的利益。
再次感谢你能够有时间与我们共同探讨本次合并事宜。
斯蒂夫·鲍尔默
微软CEO