Microsoft and Yahoo: Only the Shadow (and Maybe Ballmer) Knows
Some years ago, in the World's Most Exciting City (New York, in case you were
wondering), your editor worked briefly and mostly unsuccessfully in the dark
arts of public relations. (Journalism has turned out to be a much better gig,
fortunately.) Much of what came out of the PR experience was negative, honestly
-- but there were a few positives, such as a lasting friendship or two and a
greater understanding of just how the "business world" really works.
Now, some of you might have been involved in mergers and acquisitions already
-- and, by involved, we mean actually sitting at the table at which decisions
are made, not just waiting to hear whether you still have a job after a new
owner comes in. For everybody else, though, this short story might be of interest.
Our little team worked in the financial wing of a small but determined PR agency
that served clients in a few select verticals (including technology). One of
our clients, a trust company, was selling a local bank in upstate New York to
another, much larger financial institution. It was our job, as representatives
of the seller, to coordinate with the buyer and make sure that press- and employee-directed
communications made sense and sounded as sensitive and caring as "most
of you will probably be fired" can possibly sound.
Anyway, this was a deal involving public companies on the buying and selling
sides, so we all signed documents in which we swore ourselves to secrecy and
promised not to use our insider knowledge to make a bundle in the stock market.
Then, we had a few meetings with our client and the buyer, came up with a very
basic, essentially textbook communications strategy, wrote a draft press release
and...waited. And waited. And waited.
See, we couldn't do anything until the deal was final, and it wasn't final
when we started our planning. In fact, we didn't know when it would be final
-- but we knew that as soon as it was, we'd have to blast out a press release,
quickly find a space for a press conference and prepare to start telling employees
of the bank that they might want to explore exciting new career opportunities...like,
right now. We were basically on-call -- nights, weekends; kind of like a lot
of IT people, really -- waiting for the other shoe to drop. We knew more than
99.9 percent of people in the corporate world knew about the deal at the time
-- namely, that it was going to happen -- and yet we didn't know when the big
wigs in the conference room where the deal was going down would pull the trigger
and finalize everything. It was a fairly tense time, actually.
There's a whole long ending to the story that we won't get into because we
at RCPU have already made our point, which is this: Almost nobody knows what's
going to happen now that Yahoo
has rejected Microsoft's initial
takeover offer. Oh, there's plenty of speculation, namely that Microsoft
will go for a hostile takeover, or that Yahoo will look
for some other company to bail it out.
There are even shareholder groups trying to sway the deal (one group of Yahoo
investors would welcome
Microsoft with open arms, while another thinks that Yahoo's just holding
out for more dough), and there's talk that Microsoft might have stepped
else's private-equity bid for Yahoo.
In the days to come, we'll hear analysts, pundits and other experts telling
us what they think is likely to happen, many of whom will have an air
of certainty about their predictions. Some of them, of course, will end
up being right. But, as anybody who has been through this sort of thing knows,
no deal is done until all parties involved have signed it on the bottom line.
And in this proposed-and-then-rejected deal, nobody has come close to signing
So enjoy the speculation, but keep in mind that aside from the executive teams
at Microsoft and Yahoo and a few of their advisors -- all of whom will keep
their lips zipped under penalty of law -- nobody even knows what the companies'
next moves will be, much less whether Redmond will end up with its prize. Remember,
the Patriots were supposed to win the Super Bowl by a couple of touchdowns (and,
no, we're not over it yet here in Boston), and we all saw how that turned out.
Sometimes, somebody has to state the obvious just as a gentle reminder, and
that's what we at RCPU are here to do. You know as much as we do about this
deal, and we know about as much as most analysts, experts and pundits know --
which is nothing, or at least nothing concrete beyond what's already come out
in the press. As is always the case with this sort of thing, we're all just
waiting. Some of us just have a better idea than others of what that's like.
Have a take on Microsoft-Yahoo? Shoot it to [email protected],
and look for it in a special Friday edition of RCPU this week.
Posted by Lee Pender on February 12, 2008