6 May 2008
Unique culture and spirit highlighted in Yahoo! memo
Microsoft CEO's job in the balance after protracted buyout talks collapse.
After twice increasing their offer and lengthy discussions and pages of discussion and analysis by the media, Microsoft's proposed buyout of Yahoo! has collapsed this past weekend, after the two sides failed to agree on a price.
Walking away from the $45 billion deal, Microsoft CEO Steve Ballmer wrote a formal letter to Yahoo! CEO Jerry Yang, saying he was disappointed an agreement couldn't be reached and reiterating that Microsoft's offer was fair.
A hostile takeover bid is also unlikely, with Ballmer writing that such a move would be overly complex and undesirable.
A hostile takeover bid is also unlikely, with Ballmer writing that such a move would be overly complex and undesirable.
Yahoo! CEO talks culture
Following the breaking of the news, Jerry Yang sent a memo to Yahoo! staff thanking them for their work during a time of intense scrutiny and highlighting the company's unique culture as vital in maintaining focus.
"In the end, it all comes back to who we are as a company. We have a spirit and a culture that is uniquely Yahoo! – and we can't forget that. Staying true to who we are has helped us pull through the recent uncertainty we've faced, and will continue to be an asset as we move ahead."
Meanwhile, Ballmer also wrote to Microsoft employees, thanking them for their patience and reiterating the company's online strategy, saying that while the purchase of Yahoo! would have accelerated their plans, original targets are still in sight.
No win for either leader?
The collapse of the deal is being cast by some as a major win for Yahoo! and potentially the end of Steve Ballmer's CEO tenure at Microsoft, with one industry commentator reporting on a high-level conversation last week in which Ballmer said the deal would happen and that he would "not let the board crucify him".
However, with a significant drop in Yahoo! share prices (17%) when the market opened this week and a further decrease expected, Jerry Yang and the Yahoo! board could also face multiple shareholder lawsuits if their actions are deemed to have not been in the best interests of investors.
Commentators have questioned the validity of the merger, suggesting the cultures of the companies would be difficult to assimilate.
Microsoft employees pleased with outcome
Many commentators have questioned the validity of the merger, suggesting the cultures of the companies would be difficult to assimilate.
One well-known anonymous Microsoft blogger, going under the pseudonym of "Mini Microsoft" was unequivocal in cheering the deal's collapse. Many fellow "Microsofties" demonstrate similar views in the post's comments.
History not in favor of a merger
Among technology and media companies, the AOL-Time Warner merger in 2000 stands as the biggest corporate merger and merger failure in history, with the US$164 billion deal resulting in a $99 billion loss for AOL-Time Warner in 2002 and the shareholders requesting a radical restructuring of the business.
Have your say
Large-scale mergers, such as that between Microsoft and Yahoo!, pose significant challenges for internal communicators, who are often required to deal with the fallout of both successful and collapsed business deals.
What do you think of the leadership communications in the Yahoo! and Microsoft? How do you think events will affect employee morale?
Discuss these questions and more by joining the Internal Comms Hub members' group on the Communicators' Network.
Further links and resources:
11 Ways to empower staff during change
Helping employees adapt to change
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