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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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April 28, 2008 12:21 PM

How do Microsoft employees view the Yahoo acquisition?

Posted by Benjamin J. Romano

Mary Jo Foley explores how Microsoft employee morale has suffered since the company began pursuing its acquisition of Yahoo. She says there's a "real and prevailing sentiment among many in the Microsoft ranks" that the company should walk from the deal, no matter the price.

I've heard from a few at the company on this subject, and their thinking tends to follow these lines. But I'd love to hear from more employees.

Someone identifying himself as a Microsoft employee had this to say about the deal in an e-mail over the weekend:

"Microsoft should walk away and continue to reinvest in its own business and create new markets where it can. You don't see Yahoo! doing that. The problem is, SteveB is so convinced that this merger is going to be a life preserver for Microsoft, and he's been told this by I don't know how many people, that he is going to do it no matter what. What a waste of money in the short term, and in the long term, Google will still be #1."

He went on to say he has to trust Microsoft management to do the right thing for the company "because my job depends on it!"

Microsoft has been tried to address employee concerns about the deal on several occasions since it was announced. In February, Kevin Johnson, president of the Microsoft Platforms and Services Division, which would swallow Yahoo, sent an e-mail to employees. CFO Chris Liddell discussed Microsoft's stock price in the context of the Yahoo deal during an interview broadcast internally Friday, portions of which were filed with the SEC.

He was asked why shares have fallen back to the low $30s after hitting a 52-week high of $37.

Liddell called the market's negative reaction to Microsoft's third-quarter earnings on Thursday a short-term response.

"That to some extent was losing what we've gained over the last two days. So run up over last two days in anticipation of maybe a blow-out quarter. It was an in-line to a 'slight-beat' quarter so we lose a little bit of that momentum."

Longer-term, he cited three factors for the stock's performance:

"That is: Our own performance, but more particularly general economic performance, everyone is down a little bit. And the Yahoo situation and I think until the Yahoo situation clarifies itself one way or another, it's going to be an overhang on our price."

That overhang appears to have continued today. Near the close, Microsoft shares had lost 95 cents, 3.2 percent, to $28.88.

So, Microsoft employees, how do you view the Yahoo acquisition? What would you like to see Microsoft do?

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