AT&T plays on fantasy gridiron

Dan O'Shea — Mon, 11 Aug 2008 22:46:49 -0400

AT&T has integrated features of Yahoo! Sports Fantasy Football with its U-verse IPTV service's U-Bar toolbar, in what fantasy football maniacs are sure to call the best IPTV application ever invented. The new offering will allow armchair Jerry Joneses to track their teams and players--while watching all the games, of course.

It might be a no-brainer, but this service is a good example of how IPTV players can use interactivity and value-added features to engender loyalty from specific customer segments interested in certain types of content.

For more:
- check out this report at IPTV News

Related articles:
AT&T is aiming for 1 million U-verse subscribers this year. AT&T report
AT&T started focusing more on content last year. AT&T report

SPOTLIGHT: Yahoo to launch Flickr Video

Tue, 18 Mar 2008 07:59:00 -0400

Yahoo is expected to launch its Flickr Video site next month according to the chat at the photo sharing site's recent fourth birthday celebrations. Adding video capability to the big picture sharing site always seemed a no-brainer and has been part of the blogosphere tech chat since way back in late 2005. Yahoo already has its own video sharing site which is expected to remain--at least for the time being. Lots of claims it is all too late. But, with video set to become the dominant medium of the Internet over the next five years, Yahoo (and Microsoft for that matter) can't afford to be a bit player. Blog report

SPOTLIGHT: Advertising set for revolution

Tom Burton — Tue, 05 Feb 2008 06:59:00 -0500

It is not just the content industry undergoing big-game changes. Microsoft's $46.6 billion bid for Yahoo to compete in the new digital advertising world is perhaps the most obvious sign things are changing very fast down at Madison Avenue. According to a survey by IBM's strategy department, there are four main drivers predicted to underpin what will amount to a revolution over the next five years. The main drivers they have identified are:

Increasing fragmentation calling on the attention of audiences;
A shift in creativity away from agencies to user and client generated content;
A swing from banner to impact based formats; and,
The emergence of ad networks IBM expects to take around 30 percent of all advertising spend over the next five years. Report

Breaking: Microsoft bids $45 billion for Yahoo

Tom Burton — Fri, 01 Feb 2008 07:53:19 -0500

Microsoft has bid $45 billion for the Yahoo business in a unsolicited bid for the internet portal. The bid represents a 61 per cent premium to the Yahoo closing price of $31. The offer if successful would represent the biggest tech deal ever. Combined the organisation would offer an alternative to advertisers from Google. Below is the letter Microsoft sent to the Yahoo board yesterday evening and follows a breakdown in talks early last year.

January 31, 2008

Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer

Dear Members of the Board:

I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.

Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.

We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.

Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:

Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.

We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.

Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.

In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.

Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.

We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.

Sincerely yours,

/s/ Steven A. Ballmer

Steven A. Ballmer

Chief Executive Officer

Microsoft Corporation