The embarrassing shareholder class action lawsuit filed by the pensions funds for Detroit policemen and firemen as well as its city workers against Yahoo! spells out not just what it calls a web of cushy interlocking relationships and rich pay for the board members, but what it says is the real reason why Yahoo!’s board rejected Microsoft’s $33 a share offer to buy the Internet giant.

The lawsuit created headlines this week as it contained allegations that the board and Yahoo! chief executive Jerry Yang had enacted a brand new employee compensation plan that acted as a deal spoiler, as it could have encouraged employees to walk out en masse for “any good reason,” including changes in job titles, with total payouts reaching as much as $2.4bn, including accelerated stock and stock option vesting for all employees, all sums an acquirer such as Microsoft would have to pay (the reason why Microsoft said it set aside an extra $1.5bn to do the deal).

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NEW YORK (AFP) - Microsoft’s failed attempt to buy Yahoo will send it searching for new allies and likely see Yahoo’s share price plummet, leaving Internet giant Google the big winner, analysts said.

Microsoft announced Saturday that it had given up its quest for the struggling Internet pioneer Yahoo, which rejected Microsoft’s offer even after it raised the original bid by five billion to more than 46 billion dollars.

The announcement ended three months of overtures by the software giant, which wanted to merge its Internet resources with Yahoo’s worldwide offerings to gain ground on undisputed online advertising juggernaut Google.

Google meanwhile has increased its share of the Internet search engine market and multiplied its innovations. The firm recently also announced a way to refine its image searches, based on technology that recognizes images, not text.

Analysts believe moreover that the Microsoft-Yahoo talks have benefited Google, and suggest Microsoft did well to cut them short.

“Microsoft did the smart thing — they walked,” said Silicon Valley analyst Rob Enderle. “Yahoo’s stock price is going to come down like a rock on Monday.”

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Saturday May 3, 9:33 pm ET

SAN FRANCISCO (Reuters) - Microsoft Corp (NasdaqGS:MSFT - News) withdrew its offer for Yahoo Inc (NasdaqGS:YHOO - News) on Saturday as negotiations fell through on price, even after the software giant raised its bid by about $5 billion to $47.5 billion.

Microsoft Chief Executive Steve Ballmer said his company increased its offer to $33 per share, from the $31 per share cash-and-stock bid that it initially made on January 31. But Yahoo was looking for $37 a share, Ballmer said.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer,” Ballmer said in a statement.

“After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Ballmer.

Yahoo was not immediately available for comment.

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SEATTLE - Microsoft Corp. may go hostile in its bid for Yahoo Inc. as soon as Friday, according to a published report.

Citing unnamed people familiar with the matter, the Wall Street Journal reported early Friday that the world’s largest software maker may be preparing to go straight to Internet pioneer Yahoo’s shareholders.

An announcement was “likely” to come Friday, according to the report, though the newspaper said its sources cautioned that Microsoft may delay.

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Yahoo, after years of battling Internet rival Google for online advertising, said Wednesday it would launch a limited test of Google’s AdSense for Search service.

The announcement drew a sharp response from Microsoft, which warned that a Yahoo-Google partnership would cover some 90 percent of online advertising.

The test is expected to last up to two weeks and will be limited to no more than three percent of Yahoo search queries, Yahoo said in a statement. The program will deliver Google ads alongside Yahoo’s own search results.

The Sunnyvale, California-based company said the test will apply only to traffic from yahoo.com in the US and will not include Yahoo’s network of affiliate or premium publisher partners.

Yahoo said the testing does not necessarily mean it will “join the AdSense for Search program or that any further commercial relationship with Google will result.”

Yahoo is also fighting off a takeover bid from software giant Microsoft, arguing the offer undervalues the Internet firm.

Brad Smith, Microsoft’s general counsel, said in a statement: “Any definitive agreement between Yahoo and Google would consolidate over 90 percent of the search advertising market in Google’s hands.”

He added: “This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo. We will assess closely all of our options.”

Smith said Microsoft remains committed to a 44.6 billion dollar takeover offer for Yahoo.

“Our proposal remains the only alternative put forward that offers Yahoo shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers,” he said.
News: AFP

WASHINGTON/SAN FRANCISCO (Reuters) - Google Inc has complied with a request by the Pentagon to remove some online images from its street-level map service because they pose a security threat to U.S. military bases, military and company officials said on Thursday.

Gen. Gene Renuart, head of the military command responsible for homeland defense, said the Pentagon had talked to Google about the risks and expected the company to cooperate in removing selected images from its Street View service.

“We have been contacted by the military,” Google spokesman Larry Yu said. “In those instances where they (the U.S military) have expressed concerns about the imagery, we have accommodated their requests.”

The Defense Department, which is still studying how many images are available, has also banned Google teams from taking video images on bases.

“We’ve got to get a sense of what is there and see how we can mitigate it,” Renuart said.

But because many images were taken from public streets, the military may not have a legal right to request that videos be pulled.

Street View, a feature of Google Maps, offers ground-level, 360-degree views of streets in 30 U.S. cities. Web users are able to drive down a street, in a virtual sense, using their mouse to adjust views of roadside scenery.

The feature has become a popular service for drivers seeking to plan a trip to an unfamiliar neighborhoods. But from the outset, Street View has been a magnet of controversy over potential privacy invasion of people captured in the images.

In one instance, a man was pictured exiting a San Francisco strip club. In another case, a woman was shown sunbathing. Complaints have even included a woman asking that a picture of her cat be taken down, a request Google denied.

The images that worry the Pentagon include views of bases, including security at the entrances to those installations.

“It actually shows where all the guards are. It shows how the barriers go up and down. It shows how to get in and out of buildings,” said Renuart, commander of U.S. Northern Command.

“I think that poses a real security risk for our military installations,” he told reporters at the Pentagon.

The Google spokesman said his company’s policy was to photograph only those images visible from public roads.

“It is against Google’s policy for a driver to seek access to a military base,” Yu said.

Street View has yet to be introduced outside the United States. Web-based Google Maps and a related computer-based service called Google Earth have drawn criticism from a variety of countries for providing images of sensitive locations, such as military bases or potential targets of terror attacks.

The services rely on civilian versions of satellite maps that it licenses from commercial mapping services.

Pakistan says it has lifted a ban on YouTube, after the website removed cartoons of the Prophet Mohammed, adding that an earlier worldwide outage sparked by its actions was unintentional.

Telecommunications officials said that the popular website was up and running again in the conservative Muslim nation after YouTube removed “highly profane and sacrilegious footage” that was offensive to Islam.

“We have issued instructions to all internet service providers that YouTube should be unblocked as the specific content has been removed by the website,” Pakistan Telecommunications Authority (PTA) spokesman Khurram Mehran said.

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SEATTLE (Reuters) - Microsoft Corp plans to invest heavily in Web search to compete against Google Inc, even if it fails to acquire Yahoo Inc, the company’s chairman Bill Gates said on Monday.

Gates, who called Microsoft’s offer for Yahoo “very fair,” said Google is the only company with “critical mass” in Web search. Microsoft needs a bigger piece of the market to create a more competitive and profitable Web search business.

“We can afford to make big investments in the engineering and marketing that needs to get done. We will do that with or without Yahoo,” said Gates in an interview with Reuters.

“But we also see that we’d get there faster if the great engineering work that Yahoo has done and the great engineers there were part of the common effort,” said Gates, who is Microsoft’s biggest shareholder.

The two companies are at a stand-off in Microsoft’s $41.7 billion unsolicited bid to acquire Yahoo. Microsoft has offered to buy Yahoo for $31 a share in cash and stock, a bid which Yahoo’s board rejected, saying it undervalued the company.

Microsoft countered by saying its offer was “full and fair,” but did not say what it planned to do next. Analysts expect Microsoft to sweeten its bid, possibly to $35 a share, to clinch a deal.

“There is nothing new in terms of the process. We’ve sent our letter and we’ve reinforced that we consider that it’s a very fair offer,” said Gates, who remains the public face of Microsoft, even though he plans to switch to a part-time role at the company in June to focus on his philanthropic work.

Microsoft’s stock has fallen 13 percent since its offer for Yahoo, reducing Microsoft’s offer price to $29. Yahoo shares closed at $29.66 on the Nasdaq on Friday, indicating that investors expect Microsoft to raise its bid.

(Reporting by Daisuke Wakabayashi; Editing by Valerie Lee)

I came across an interesting website where a Photoshop designer made some interesting pictures of Google and Yahoo! So i wanted to share it with you all guys!

Yahoo CEO Jerry Yang cited the growing online advertising market and his company’s position to take advantage of that growth as reasons for shareholders to reject Microsoft’s acquisition bid, he said in a letter to shareholders Wednesday. The letter, the contents of which Yahoo made public Wednesday, stated that Microsoft’s February 1, $44.5 billion unsolicited takeover offer was too low. Yang said that Yahoo is the most visited site in the United States, held the top position in online display advertising, and counted almost one out of two of the world’s Internet users as its members. He also said Yahoo is the top mobile destination in the U.S.

Yang did not cite sources for most of his claims. However, comScore Networks research from November 2007 confirmed Yahoo’s online display advertising leadership, with almost 19 percent of the market. The online ad market is expected to grow from $45 billion last year to $75 billion in 2010, Yang said, and that Yahoo wanted “to take advantage of what we see as a unique window of time in the growth — and evolution — of this market to build market share and to create value for stockholders.”
Author : Daniel Fleshbourne @ NeoWin