Commentary - 02/01/2008

Microsoft Attempts To Devour Yahoo!

Reuters' headline this morning was "Microsoft offers to buy Yahoo for $44.6 billion.

NEW YORK (Reuters) - Microsoft Corp has made an unsolicited offer to buy Yahoo Inc for $44.6 billion in cash and stock, seeking to join forces against Google Inc in what would be the biggest Internet deal since the Time Warner-AOL merger.

In its boldest-ever acquisition move, Microsoft said on Friday it offered $31 per share for Yahoo, or a 62 percent premium over the Internet media company's closing stock price on Nasdaq Thursday.

Wow! A 62 percent premium over yesterday's stock price. So if you were in the know, you could have made $62,000 on a $100,000 investment in one day. Small wonder people lie to and steal from others. Anyway, the story continues:
Speculation over a Microsoft move on Yahoo has swirled for at least a year, as investors wondered whether the two would seek a joint stand against an ever more powerful Google.
So just who benefits? Certainly not Yahoo!'s 12,000 employees, most of who will become redundant and lose their jobs. They may lick their wounds with whatever Yahoo! stock they own, but that may or may not be enough to sustain them for very long. It's the few major holders, listed below, that really benefit. They'll take the lion's share, leaving the crumbs for the rest to fight over.

Here's just one example of why there will be significant job losses. Both Microsoft and Yahoo! provide financial information. Check out the information for Institutional Holders of Microsoft here (Yahoo!) and here (MSN). Right now, competition keeps them both honest and competent. But what if that's no longer the case?

Another question is just who are these "investors"? Who really controls Google, Microsoft and Yahoo!?

Google and Microsoft are simply plantations now. The insiders control zero percent of Google shares, and Gates has been on his way out for some time now, so what Google and Microsoft now does depends on what it's foreign absentee-owners tell it to do. Yahoo! is also fairly well controlled, although the insiders do own 10%. There still is some pride and self-interest left, but that is easily overwhelmed by the TOP 10 holders. Those TOP 10 holders only make up less than 2% of the shareholders, but between them they control over 49% of the shares. Perhaps they figure it's time to consolidate the plantations and reduce their expenses.

If Google needs to be puffed up, the major advertisers, controlled by the same financial monsters, simply shift their advertising dollars away from Yahoo! If Microsoft takes over Yahoo! and Google needs to be taken down a notch, the same advertisers will easily shift their advertising dollars to Microsoft. That's how completely controlled America has become. Below is the proof, and the information comes from Yahoo!'s own website.

Yahoo - Microsoft - Google

Sadly, Yahoo! is in a no-win situation. If Yahoo! fights the offer to remain independent, they'll be punished by advertising dollars being shifted to other firms. In fact, they could have easily been set up for this fall in the first place. Their stock price may had already been manipulated downward.

This is exactly what happened when Barrick Gold wanted to acquire NovaGold, which was written up here last month. When Barrick's hostile takeover failed, an amazing engineering report came out months later that NovaGold had under-estimated their development expenses by 2 1/2 times. NovaGold's stock collapsed and the financial monsters picked up shares from the panicked shareholders at less than half of what they originally offered. There's nothing that would stop these financial monsters from doing the same thing to Yahoo!

Sometimes The Dragon Wins

Symbol Name Of Corporation

Yahoo! Inc. (As of 30-Sep-2007)
Top 10 Institutional HoldersShares2007Value2006
Capital Research And Management Company151,851,00011.36%$4,075,680,840-.--%
Legg Mason Inc.118,353,6268.86%$3,176,611,321-.--%
Barclays Global Investors UK Holdings Ltd39,684,8712.97%$1,065,141,937-.--%
Vanguard Group, Inc. (The)36,274,3222.71%$973,602,802-.--%
Janus Capital Management, LLC35,650,9692.67%$956,872,007-.--%
State Street Corporation34,151,2022.56%$916,618,261-.--%
Citigroup Inc.27,855,7782.08%$747,649,081-.--%
Goldman Sachs Group Inc27,034,9342.02%$725,617,628-.--%
UBS Global Asset Management (Americas) Inc25,535,5581.91%$685,374,376-.--%
Concordia Advisors (Bermuda) Ltd24,010,0001.80%$644,428,400-.--%
% of Shares Held by All Insider and 5% Owners:10%-.--%
Top 10 [1.8%] of 535 Institutional Holders Control38.94%-.--%
Percentage of Barclays and "Associates" Control21.16%-.--%
NOTE: Capital Group manages five funds that control 8.33%.
Legg Mason manages a fund that controls 1.82%.
Therefore, the TOP 10 control 49.09+%, and
Barclays/Associates control at least 22.98+% of Yahoo!

Symbol Name Of Corporation

Microsoft Corporation (As of 30-Sep-2007)
Top 10 Institutional HoldersShares2007Value2006
Capital Research And Management Company556,573,4005.95%$16,396,652,364-.--%
Barclays Global Investors UK Holdings Ltd378,567,3074.05%$11,152,592,864-.--%
State Street Corporation256,595,2332.74%$7,559,295,564-.--%
Vanguard Group, Inc. (The)233,875,4622.50%$6,889,971,110-.--%
Price (T.Rowe) Associates Inc129,474,3081.38%$3,814,313,113-.--%
AXA (Paris, France)118,054,7011.26%$3,477,891,491-.--%
Franklin Resources, Inc113,165,5601.21%$3,333,857,397-.--%
Goldman Sachs Group Inc112,274,2221.20%$3,307,598,580-.--%
Bank of New York Mellon Corporation112,111,0321.20%$3,302,791,002-.--%
FMR Corporation (Fidelity Management & Research Corp)108,625,7121.16%$3,200,113,475-.--%
% of Shares Held by All Insider and 5% Owners:14%-.--%
Top 10 [0.7%] of 1372 Institutional Holders Control22.65%-.--%
Percentage of Barclays and "Associates" Control11.78%-.--%
NOTE: Capital Group manages five funds that control 3.83%.
Vanguard manages two funds that control 1.39%.
Therefore, the TOP 10 control 27.87% of Microsoft.

Symbol Name Of Corporation

Google Inc. (As of 30-Sep-2007)
Top 10 Institutional HoldersShares2007Value2006
FMR Corporation (Fidelity Management & Research Corp)24,360,4897.79%$13,818,974,595-.--%
Capital Research And Management Company14,943,2504.78%$8,476,857,427-.--%
AXA (Paris, France)8,206,0812.62%$4,655,063,568-.--%
Barclays Global Investors UK Holdings Ltd7,947,7812.54%$4,508,537,727-.--%
Wellington Management Company, LLP6,929,7542.22%$3,931,041,551-.--%
Vanguard Group, Inc. (The)6,548,9372.09%$3,715,015,491-.--%
State Street Corporation6,533,5292.09%$3,706,274,995-.--%
Legg Mason Inc.4,731,3281.51%$2,683,940,434-.--%
Price (T.Rowe) Associates Inc4,605,9771.47%$2,612,832,572-.--%
Janus Capital Management, LLC3,983,2481.27%$2,259,577,092-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [1.2%] of 834 Institutional Holders Control28.38%-.--%
Percentage of Barclays and "Associates" Control8.88%-.--%
NOTE: Fidelity manages three funds that control 4.00%.
Capital Group manages two funds that control 3.29%.
Vanguard manages two funds that control 1.08%.
Therefore, the TOP 10 control 36.75% of Google.

2008 by Edward Ulysses Cate
Help Support This Site
Commentary Index