Legal

Microsoft and Yahoo agree on a deal, but China adds a new wrinkle

Microsoft and Yahoo have agreed on a $47.2 billion dollar deal that will end the drama between the two companies, which has been ongoing since Microsoft made its original $44.6 billion dollar offer in February. China, however, has added a new twist to the drama, passing an antitrust law that will make the world's most populous country a third regulatory hurdle to overcome, joining regulators in the United States and the European Union.

Microsoft and Yahoo may be close to agreeing on a deal that will end the drama between the two companies, which has been ongoing since Microsoft made its original $44.6 billion dollar offer in February. The original offer rocked the industry and caused waves of speculation about Yahoo's future. One of the biggest sticking points seems to be the "poison pill" measures that Yahoo has been adopting, including one that provides all employees with four to 24 months of severance in the case of acquisition-based layoffs.

Microsoft, Yahoo agree on buyout price (Infoworld April Fool's joke)

China, however, has added a new twist to the drama, passing an antitrust law that will make the world's most populous country a third regulatory hurdle to overcome, joining regulators in the United States and the European Union. Interestingly, China's first antitrust law took effect in 1993, the same year that the Redmond-based giant introduced itself to that country. The single biggest concern for Microsoft in China appears to be software piracy, with some estimating that 90% of the software there is pirated.

China law could impede Microsoft deal for Yahoo (News.com)

Microsoft's China Foibles (Forbes)

It seemed unlikely a month ago that Microsoft's takeover bid could have even more drama attached to it than it already had, but China's insertion of its new antitrust law appears to have done just that. The deal could be affected because of Yahoo's $1 billion dollar investment in Alibaba, China's largest e-commerce site. The new Chinese regulations will allow them to approve of the acquisition of any company with investments in Chinese ventures. Do you think that the Yahoo acquisition will pass muster with the three regulatory agencies?

[Author's Note] I apologize for any confusion arising from the first version of this blog, which I started writing at 5:30 a.m. in a somewhat zombified state.  I did not have enough awareness at the time to realize that the Infoworld article linked above was an April Fool's joke and, unfortunately, I was today's fool. [/Note]

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20 comments
BALTHOR
BALTHOR

The best idea in reporting is to verify content and sources.This one relied on another article.The whole Microsoft,Yahoo thing could be an April Fool's joke!There's still plenty of time to bail out.You have millions of people at heart pounding because they think Yahoo will increase in price or be dissolved.

Matt Burks
Matt Burks

It's bad enough that I don't get to read Tech news as often as I'd like but then I have to put up with stupid "April Fools" news and waste my time reading something like this only to find out it's fake. Wow, there are some people with TOO much time on their hands

andrew
andrew

How about the stop selling Windows products on the streets and then they can have a say in the merger...

serrin
serrin

There were reports of this already over a week ago. Would actually be news if there were any factual evidence that China was going to enforce this law. It could get interesting though; China holds a huge piece of market pie in technology. If they start throwing legal weight around it could throw a wrench into things.

seanferd
seanferd

China pretty much got screwed in '48, because they were screwed for a long time prior, just like all countries what were colonized or forced into trade with European powers. China was screwed just a little bit earlier by a bastard child of western civilization - Japan. It is all quite like the cycle you get with abused children; many become abusive adults. Yeah, Tibet keeps getting royally screwed. China having a trade surplus from the U.S. is the U.S.'s own fault.

grax
grax

They got screwed in 1959 and the world did nothing. You still do nothing and China now owns the US national debt. Get wise - your screwed! Enjoy the Olympics and learn Mandarin.

Neon Samurai
Neon Samurai

The agency questioning the Google/Microsoft merger is a government office. The organizations selling of invalid licenses on the streets is not a government office. The two are unrelated though i wouldn't go so far as to say there is no political relationship between the two. ;) Besides, look how easy software copywrite infringement has been to stop everywhere else outside of China.

seanferd
seanferd

As far as I know, MS has not given the same access to the U.S. gov't or the governments of other nations. Not that I'm for companies giving their stuff to governments, but since MS software is used by gov'ts, I think source availability might be good for gov't network security. Considering, that is, the source was opened for China, just to do a deal.

Neon Samurai
Neon Samurai

The Chinese gov was looking at a nonMS solution when suddenly, Bill had time to fly over and have lunch. He also braught new chinese friendly pricing. In India the reasoning was similar; price it at 3$ a license and hold on to whatever market share you can grasp. My point was simply that the breach of software copywrite has no relation to the decisions of a government office. "maybe they should stop stealing Windows before they ask questions about someone's business merger" was an obvious stab at a joke but is not actually a valid analysis.

serrin
serrin

On the topic of piracy, TechRepublic and others noted some time ago about a deal Microsoft struck with china to sell Windows and other MS products at fractions of the retail costs selling in the US and Europe. This was specifically to combat piracy in China due to unaffordable software pricing. I haven't heard about any impact this has had and I doubt there is any.

ITSecurityGuy
ITSecurityGuy

"with $1.12 of Microsoft stock being swapped for each share of Yahoo" that should have been 1.12 shares of MS stock, not $1.12 Otherwise it wouldn't be: "roughly a 12-cent-per-share premium over Yahoo?s $29.05 closing stock price on Monday."

Jaqui
Jaqui

I guess I'll have to change email address for here, and a few other sites, then unsubscribe from a few email lists and close out the yahoo account. MS will screw yahoo service over, just like they have every other online service they bought.

seanferd
seanferd

I've used some different e-mail services in the past, but I'll take any recommendations from this community. I have the feeling that I'll want to avoid using Yahoo mail after it is co-opted (corrupted?) by MS. I never use any other Yahoo services anyway, such as the home page, and I refuse to use webmail of any sort, but I'll still need a fairly reliable e-mail server, one that doesn't put its own little ads into my mail. While I'm not particularly impressed with any ISP or online service, Yahoo and AT&T have been pretty darn good for me up to this point. I'm very disappointed by Microsoft's acquisition of Yahoo, particularly since one company escaped MS's grasp a number of years after being absorbed, in the recent past.

Neon Samurai
Neon Samurai

Though, that wouldn't be the professional thing to do or course. ;)

Peconet Tietokoneet-217038187993258194678069903632
Peconet Tietokoneet-217038187993258194678069903632

This will be a smack in the face of Google. I would have hoped Yahoo to stay as it was, but such as life. Life changes for the better (or worse in some cases). We will all have to see what the outcome will be like, not only for Microsoft but us users, will we see a battle with Microsoft and Google, will Microsoft buy out Google?. This will have to be seen.

Neon Samurai
Neon Samurai

Ah crap. I already had a mess of my email with Rogers sold the service off to Yahoo. Now those two accounts seem inseporable. But wait, there's hope; now I can look forward too more email mess when @hotmail get's merged into @yahoo/@rogers.

Andy J. Moon
Andy J. Moon

Microsoft and Yahoo will now have an additional issue to overcome now that Chinese regulators have inserted themselves into the mix. Microsoft is already likely sweating their prospects in Europe, since their multibillion dollar fine a couple of months ago in the long running antitrust battle there. China's new regulations will definitely have an effect on the merger, but exactly how much remains to be seen. Do you think the merger will go through all of the regulatory agencies and which is the most likely to hold up the deal?

cathar.gnostic
cathar.gnostic

Well my Internet provider moved all it's email to Yahoo without asking anybody and the whole country is pissed off. If Microsoft buys them then I will move on. No thanks Microsoft, I don't care who you buy but, who lets you buy what, I just will move on and not be a part of it.

Ajax4Hire
Ajax4Hire

just look at the strong-arm tactics used in the ODF/OOXML standards. The merger is a question of money. And where Microsoft and money are concerned, bet on Microsoft. They have enough money to make this merger a reality. $47Billion for a Search Engine/Portal company. Think about it.

jhogue
jhogue

The pun is lost when translating to English. In French "miau" is equivalent to "meow" in English. Ah well. Since this article appeared before April 1 in various newspaper, this cannot be an April fool trick. This is a simple question. Does Microsoft want the Chinese market badly enough to try negociating with the Chinese authorities to give them good reasons to find creative solutions to the merger issue?

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