To those Yahoo shareholders whose eyes glistened with money signs when Microsoft made its much-publicized acquisition offer two weeks ago, Yahoo CEO Jerry Yang says the best is yet to come. In a letter sent to Yahoo investors on Wednesday, Yang explained the company’s rationale behind the decision to turn down the offer, and gave reasons why the company will succeed even without the software giant’s backing.
According to Yang, Yahoo rejected Microsoft’s offer of $44.6 billion offer because the Yahoo’s board of directors “believes that Microsoft’s proposal substantially undervalues Yahoo! and is not in the best interests of our stockholders.”
Instead, Yang believes Yahoo’s future success will ride on the projected increase in the global online advertising market from $45 billion in 2007 to $75 billion in 2010. The company’s strengths include a user base so huge that it includes 50 percent of all Internet users, its #1 position in online display advertising, and a “healthy cash balance” of over $2 billion, as of December. Yahoo has also been revamping its computing infrastructure and investments in both China and Japan.
“The fact is that we are well on our way to transforming the experiences of Yahoo!’s users, advertisers, publishers and developers,” Yang wrote in closing, “An important shift that is at the heart of our plan to create stockholder value. “
