Why Yahoo Rejected Microsoft's $44.6 Billion Offer

Yahoo turned down Microsoft's $44.6 billion offer in 2008. Nine years later its web business sold for $4.5 billion. But the board's reasons weren't crazy, and the gap came down to four dollars a share. Using the original letters and SEC filings: what Microsoft offered and why, the three arguments Yahoo's board made for saying no, the $33 vs $37 standoff, the Google ad deal that died under the Justice Department, and what the Alibaba and Yahoo Japan stakes finally paid shareholders. ⏱️ Chapters 00:00 The Withdrawal Letter 00:45 The Front Page of the Internet 03:33 The Offer 08:52 Four Dollars, Then Plan B 13:56 Four Point Four Eight Billion 17:12 Who Was Right? 📚 Sources Microsoft letter to Yahoo's board, Jan 31, 2008 (SEC Form 425): https://www.sec.gov/Archives/edgar/da... Yahoo board response, Feb 11, 2008 (8-K): https://www.sec.gov/Archives/edgar/da... Microsoft conference call, Feb 1, 2008: https://news.microsoft.com/speeches/m... Microsoft letter to Yahoo's board, Apr 5, 2008: https://news.microsoft.com/source/200... Microsoft withdrawal, May 3, 2008 (8-K): https://www.sec.gov/Archives/edgar/da... Yahoo letter to stockholders, May 2008: https://www.sec.gov/Archives/edgar/da... Yahoo investor presentation, June 2008 (DEFA14A): https://www.sec.gov/Archives/edgar/da... US Department of Justice, Nov 5, 2008: https://www.justice.gov/archive/opa/p... Yahoo–Microsoft search agreement, July 2009 (8-K): https://www.sec.gov/Archives/edgar/da... Yahoo–Verizon amendment, Feb 2017 (8-K): https://www.sec.gov/Archives/edgar/da... Altaba distributions (8-K) and N-CSR FY2025: https://www.sec.gov/Archives/edgar/da... · https://www.sec.gov/Archives/edgar/da... comScore US search rankings, 2008: https://comscore.com/Insights/Press-R... InfoWorld, shareholder lawsuit, June 2008: https://www.infoworld.com/article/217... Technology Review / AP, May 5, 2008: https://www.technologyreview.com/2008... Microsoft share price (Sep 23, 2019, $139.14) and S&P 500 closes: Yahoo Finance historical data. ▶️ Watch next: Blockbuster's real mistake wasn't passing on Netflix.    • Blockbuster's Real Mistake Wasn't Passing ...   This video is for educational purposes only and is not financial advice. 🎵 Music: Prelude in E minor, Op. 28 No. 4 (Chopin), performed by Jeannette Fang, via Musopen. Public Domain Mark 1.0. 🖼️ Image credits (Wikimedia Commons): Danielinblue: Alibaba Binjiang Park; TaobaoCity Alibaba Xixi Park (CC BY-SA 4.0). Thomas Lombard: Alibaba group Headquarters (CC BY-SA 3.0). Jesús Gorriti: Steve Ballmer, MIX 2008 (CC BY-SA 2.0). Yahoo (Flickr): Steve Ballmer signs the Microsoft-Yahoo agreement; Carol Bartz at NASDAQ; Chairman Roy Bostock welcomes Scott Thompson (CC BY 2.0). U.S. Department of Justice headquarters, August 12, 2006 (CC BY-SA 3.0). Gunnar Klack: Robert F. Kennedy Department of Justice Building, 2014 (CC BY-SA 4.0). APK: Robert F. Kennedy Department of Justice Building (CC BY 4.0). MBlairMartin: Gateway 2000 (CC BY-SA 4.0). Coolcaesar: Googleplex, 2006; Yahoo Headquarters (CC BY-SA 3.0). JD Lasica: Jerry Yang (CC BY 2.0). Robert Scoble: Lehman Brothers, NYC, Sep 15, 2008 (CC BY 2.0). World Economic Forum: Marissa Mayer, 2013 (CC BY-SA 2.0). Atomic Taco: Microsoft Redmond Campus, 2021 (CC BY-SA 2.0). Arild Vågen: New York Stock Exchange, 2017 (CC BY-SA 4.0). Cody Logan: Seattle skyline from Gas Works Park (CC BY-SA 4.0). dnak: Seattle Skyline, 2008 (CC BY 2.0). Carl Lender: Datacenter Server Racks (CC BY 2.0). Jef Poskanzer: Evergreen container ship, SF (CC BY 2.0). Francisco Gonzalez: Tickers (CC BY 2.0). Spinklink: Vault Door, Federal Hall (CC BY-SA 4.0). Anthony92931: Verizon Wireless store (CC BY-SA 3.0). Scott Schiller: Yahoo! Sunnyvale HQ, 2018 (CC BY-SA 2.0). Stéfan Le Dû: Yahoo! Japan's neon sign at Roppongi (CC BY-SA 2.0). Daniel Spisak: Yahoo! Vacancy (CC BY-SA 2.0). Public-domain images and public records: SEC EDGAR filings, US Department of Justice, and other PD/CC0 works on Wikimedia Commons. Charts: our own, from the filings and Yahoo Finance data. Shown for commentary: CNNMoney, TechCrunch and VentureBeat (via the Wayback Machine), InfoWorld, NBC News/Reuters, Technology Review, and Yahoo's 1996 home page (Wayback Machine). Narration created with AI tools.