Yahoo! explains MS rebuff to shareholders

Stephen Withers
Friday, 15 February 2008 01:48

Opinion and Analysis

A letter to shareholders explains why the Yahoo! board is opposing Microsoft's bid for the company.

In the letter, Yahoo! chief executive Jerry Yang reiterates the company's position that the bid represents an undervaluation, pointing to Yahoo!'s market leadership in many popular online services and in display advertising, its equity in Yahoo! Japan and Alibaba (China), and strong partnerships with a range of companies including eBay.

Yang also claimed Yahoo!'s $US2 billion cash balance plus "substantial" cash flow will enable the company to execute its plans.

Those plans include increasing the number of visitors to key Yahoo! sites by 15 percent per year for the next several years, and a 30 percent increase in the online advertising "touch" over a similar period.

"These key strategies will be enhanced by our adoption of new, more open technology platforms that will encourage the development of new applications and the involvement of third-party developers - and help enrich the user experience," Yang said in the letter, presumably referring in part to the announcement earlier this year of the Yahoo! Mobile Development Platform.

"Today, Yahoo! is a faster-moving, better-organized, more nimble company than it was just a few months ago," he added. "We have redeployed our resources to drive Yahoo!'s key strategic priorities - taking important steps to streamline our organization and close down or scale back businesses that don't support these critical growth initiatives. The fact is that we are well on our way to transforming the experiences of Yahoo!'s users, advertisers, publishers and developers - an important shift that is at the heart of our plan to create stockholder value."

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