Yahoo: Hostile Takeover?
Marc Andreessen had some lawyers do an analysis of the current situation between Microsoft and Yahoo, and then posted an excellent summary on his blog on what could happen, what is most likely to happen, and how things work. It is a good read, and a compelling conclusion:
We are learning that hostile takeovers have arrived in our industry. This is the second major hostile takeover so far — the other was Oracle’s takeover of Peoplesoft — but there will be more.
This is significant because historically hostile takeovers practically never happened in technology. Potential hostile acquirors assumed that hostile takeovers wouldn’t work because the target company’s employees would bail and the target company’s business would collapse.
It turns out that as technology companies become larger and more mature, acquirors are becoming increasingly convinced that neither of these assumptions hold. Perhaps employees of large tech companies aren’t that bonded to current management, and perhaps many of them would actually prefer to work for a larger, more dominant combined company. And maybe as a consequence, the target’s business would do just fine in the wake of a hostile takeover — in fact, maybe it would do better, due to advantages of combined size and scale.
My bet is that hostile takeovers, particularly of larger and more mature companies, are going to become increasingly common in our industry.
One theme is that Yahoo’s corporate structure leaves it more vulnerable to a hostile takeover, and that as hostile takeovers becomes more commonplace in the technology industry, you should see more companies willing to adopt conventions like the dual-class share structure you see at Google.
