Microsoft's Steven Ballmer's letter to Yahoo's Jerry Yang on abandoning of the deal

Yahoo's trick of outsourcing ads placement to Google seems to have paid off.

Below is the text of the letter from Microsoft CEO Steve Ballmer to Yahoo! CEO Jerry Yang.

May 3, 2008


Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089


Dear Jerry:

After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.

I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.

I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.

In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.

Also, after giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

· First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

· Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.

· In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

· This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.

· It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.

Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.

We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.

I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.

But clearly a deal is not to be.

Thank you again for the time we have spent together discussing this.

Sincerely yours,
/s/ Steven A. Ballmer


Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation

Here is the threatening letter Microsoft had send to Yahoo few weeks back regarding hostile takeover.

Indian middle class causes food price rise : Bush

US President George Bush has joined his top diplomat in suggesting that the growing prosperity of India's large middle class is contributing to rising food prices around the world.

"...the more prosperous the world is, the more opportunity there is," he said commenting on the economy during a visit Friday to World Wide Technology, Inc. in Maryland Heights, Missouri. "It also, however, increases demand."

"So, for example, just as an interesting thought for you, there are 350 million people in India who are classified as middle class. That's bigger than America. Their middle class is larger than our entire population.

"And when you start getting wealth, you start demanding better nutrition and better food. And so demand is high, and that causes the price to go up," said Bush joining his top diplomat Condoleezza Rice in suggesting India's role in the world food crisis.

I read an interesting post regarding this at bloggernews

What should the Indian middle class do? Should he give up the prosperity and return back to the fold of backward nations? Or should he look for statistics to find out how much food the prospering Indian Middle class gulp down in the form of Pepsis, Coca Colas Mac Donalds.

These Indians drink, on average, nine servings of Coke products per year. Has George Bush forgotten that few years back there was an agitation in India in which it was alleged that the 68 Cola plants in India has caused a water shortage in many parts of India? In Varanasi, alone, Coke draws an estimated 158,503 gallons a day. In fact the Colas have a market of 300 millions of middle class Indian, incidentally equivalent to US population

And what about the expenditure of these middle class Indians who help US economy by buying Levis ,Reebock ,Adidas to name a few.

Indians have right to grow their food and give preference to their own country men instead of selling to countries busy in selling nuclear arsenals ,oil and other things.

Inside The World's First Billion-Dollar Home

The 27-storey skyscraper being built in Mumbai by Mukesh Ambani, the richest person in India, could be the world's largest and costliest home with a price- tag nearing two billion dollar, according to Forbes magazine.

"When the Ambani residence is finished in January, completing a four-year process, it will be 550 feet high with 4,00,000 square feet of interior space," Forbes said in a report on its website.

Earlier in March, Mukesh Ambani was ranked as the fifth richest person in the world with a net worth of 43 billion dollars by the Forbes magazine in its annual list of world's wealthiest billionaires.

The only remotely comparable high-rise property currently on the market is the 70 million dollar triplex penthouse at the Pierre Hotel in New York, designed to resemble a French chateau, and climbing 525 feet in the air,

The report further noted that the cost for the Ambani residence, called Antilla whose shape is based on Vaastu, would be more than a hotel or high-rise of similar size because of its custom measurements and fittings.

While a hotel or condominium has a common layout, replicated on every floor, and uses the same materials throughout the building, the Ambanis' home has no two alike in either plans or materials used, it said.

At the request of Nita Ambani, say the designers, if a metal, wood or crystal is part of the ninth-floor design, it shouldn't be used on the eleventh floor, for example. The idea is to blend styles and architectural elements so spaces give the feel of consistency, but without repetition.

Why you will miss The King of fruits-mango this year

Thanks due to non-seasonal rains in February in mango producing regions, all of them have been decayed. There should be no rain during harvesting period otherwise there will be bacterial decay. But it happened and now most of the mangoes are not fit for consumption. The king of mangoes- Alphonso is being sold at very high rate. All the good one are being exported to western countries. I hope by next year they control this global warming and we can relish the God's fruits in this sweltering heat of May.

A new york times link to the topic of mangoes.

Yahoo set to show Google ads on search results

Yahoo Inc. could announce an agreement to carry search advertisements from Google Inc. within a week, as it braces for Microsoft Corp. to go hostile or abandon its unsolicited acquisition offer for Yahoo, say people familiar with the matter.

Yahoo was waiting for Microsoft to announce its approach this week, after the two sides failed to reach a negotiated deal amid a divide on price. But Yahoo has also been pursuing a broad agreement to carry search ads from Google, which it views as a way to boost its cash flow and bolster its claim to shareholders that it is still capable of being alone