Yahoo! and Microsoft… or Microhoo??
February 2, 2008 // No Comments
The technical and the economic world is buzzing with the news of Microsoft’s bid to buy Yahoo! at $31/share amounting to a total of $44.6 billion. The following was the letter sent by Steve Ballmer
January 31, 2008
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer
Dear Members of the Board:
I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.
Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.
We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.
Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.
In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.
While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:
Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.
Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.
Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.
Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.
We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.
We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.
Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.
In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.
Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, 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.
We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.
Sincerely yours,
Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation
Let me start with analysing some specific segments of the letter.
Firstly, compelling value realization event for your shareholders is just a fancy business lingo for a good price for the shareholders.
I noticed that not even once GOOGLE was mentioned by name in the letter even though it was referenced by the phrase there is only one competitor at scale.
Eliminating redundant infrastructure and duplicative operating costs is just management lingo that there’ll be lay-offs and maybe some of the middle-management would be replaced by microsoft’s management.
Overall, the letter sounds like Microsoft saying to Yahoo! that they should accept the offer as they weren’t able to meet the goals they set out for AND Yahoo! has the technical strength and market share that Microsoft needs to compete with Google.
CSS link repository - I
January 14, 2008 // No Comments
Here are some of the sites that I would recommend for any information regarding CSS
Mailing List
Others to be mentioned
Validation
protecing your images on the web
January 12, 2008 // 4 Comments
If you put up some photos of paintings or certificates or any personal stuff on the internet, at some point someone is going to use those photos without your permission. You may feel that your stuff is ’stolen’, but there isnt much that you can do in order to protect your images. So what do you do?
1. You can start by putting up low-resolution images on your website at a size as small as possible. A resolution of around 72 dpi would be fine for viewing on the web. These low quality resolution images may be copied for use on the web, but are no good for printing out.
2. Watermaking your pictures has been one of the favorite methods of discouraging others from using your images. You can easily put up a semi-transparent text across you image to deter the others from using the images directly. It is possible to remove a watermark, but most people wont spend the time doing so.
3. Some websites disable right click on their websites in the hope to stop their content from being ’stolen’. I would not suggest the scheme as it turns out to be highly irritating for the visitors and it is very easy to bypass. Anyone can disable scripts in his browser for your page and easily download the images from your website.
4. Another not-so-commomly-used method can be to incorporate each of your image as a separate Adobe flash object. However, initially you need to create different flash objects for each of your images. On the upside, no one can right-click-and-save your images nor can anyone download the images from the path. But there do exist softwares to specifically download flash objects from the website. Once downloaded, graphic objects can be easily extracted from the flash objects.
5. Some developers use the technique of image hiding. In this technique, the original image is placed as the background of a table cell introduced at the position of the image on the webpage. Above the background image (the image you need to display), you place a transparent image of the same size. When the visitor right-click-and-save the image, without knowing he selects the transparent image to be saved. The technique relies on the assumption that the visitor wont notice that he has saved the wrong image until much later and will decide that returning to your site to steal the right one is too much effort. The code for such a technique can be generated here.
6. The last one possibly the most complex and the most time consuming of all is the slicing method. In this method, you can use any software like Adobe Fireworks (my favorite!) for slicing the images into several parts. The same software is capable of generating the appropriate html code to re-assemble the image parts on the webpage. You can copy the generated html <table> code (without the <html> or <body> tags) into your webpage. In this case, with the visitor right-click-saves, he is able to save only the sliced part of the image where he clicked. In order to obtain the complete image, he has to download all parts and then re-assemble the parts like a jigsaw puzzle in his webpage or a photo editing software. This method may be used by applying this process to a low resolution image. Click here for a sample image
The slicing method is my favorite amongst all. However, the inital prep for all images has always been a big deterrant for adopting this method. I plan to code a script to automate the slicing procedure in the near future. Keep a check on this page for any updates.
Even with all the methods described above, the user can still use print-screen and obtain the image using a simple photo editing software. Thus, all the methods described here are still not capable for providing complete security for your image content on your webpage. However, a combination of the techniques described above can really discourage someone from downloading your images for personal use.