Global News

Yahoo rejects Microsoft overture Yahoo has rejected a takeover bid worth more than $40bn from Microsoft, saying that it is too low. Yahoo said the offer “substantially undervalues” the company and is not in its shareholders’ interests. Microsoft’s offer was worth $31 a share, 62% above the level at which Yahoo stocks were trading when the offer was made on 1st February. A merged Microsoft and Yahoo would be one of the biggest technology firms, and would rival industry leader Google. Microsoft said that Yahoo’s rejection of its initial offer was “unfortunate,” but that it still had belief in the merits of its proposal which it felt was “full and fair.” As it rejected the Microsoft offer, Yahoo said that the deal undervalued its brand, audience, investments in advertising platforms and future growth prospects, free cash flow and earnings potential. The company said that its board of directors was continually evaluating all of its strategic options. A source quoted by the Wall Street Journal said that Yahoo’s board would be unlikely to consider anything below $40 per share. A $40 a share offer would be a 109% premium to the $19.18 closing price of Yahoo’s shares the day before the original offer was announced. Yahoo’s shares have not traded above $40 for two years. Analysts say Microsoft is likely to come up with an improved offer. A report suggests that Yahoo may approach Time Warner’s online division AOL in the hope of drumming up an alternative tie-up. Although Yahoo’s shares have fallen sharply in past months, its Web sites remain among the world’s most popular. Microsoft’s original offer was worth as much as $44.6bn, but since the deal was announced Microsoft shares have fallen. As half of Microsoft’s offer is in cash and half in stock, that has reduced the value of the bid to about $41.8bn.

Double boost for Blu-ray backers The backers of the Blu-ray high definition DVD system have received a twin boost in their ongoing format war with HD DVD. Best Buy—the US’s largest consumer electronics chain—has announced that it will recommend that its customers choose Sony’s Blu-ray format. Its shops will carry HD DVD, but Blu-ray will be displayed more prominently. Online video rental company Netflix said it would phase out its HD DVD stock and exclusively offer Blu-ray. Netflix has become the US’s largest company in a fast-growing field—DVD rental by mail—and announced a year ago that it had made its billionth DVD delivery after just eight years in business. It has stocked both Blu-ray and HD DVD since the formats came on the market in early 2006 but said it had been prompted to reconsider this after a majority of the major Hollywood studios came out in favor of Blu-ray. Walt Disney, Sony Pictures, Twentieth Century Fox, Warner Brothers and MGM are the studios that have endorsed Blu-ray. Paramount and Universal Studios publish their high-definition DVDs in Toshiba’s HD DVD format. The company also said that the reality was that not many customers were ordering HD DVDs. From the Netflix perspective, focusing on one format will enable it to create the best experience for its subscribers, it said in a statement. Netflix’s rival Blockbuster said last June that it planned to stock only Blu-ray titles in its 1,450 US stores. The battle between HD DVD and Blu-ray has echoes of the rivalry between Betamax and VHS in the 1980s over which was the better video format for customers. Although both competed side-by-side for several years, the cheaper VHS format eventually won total dominance of the market.

EU regulator raids Intel offices Intel, the world’s biggest maker of computer processors, has been raided by European Union competition regulators amid claims that it abused its market position. Chuck Mulloy, a spokesman for Intel, said that the regulators raided the company’s office in Munich, Germany. Mulloy said Intel was co-operating with the investigators. Intel has been accused of trying to abuse its dominant market position by selling its products below cost price and making cash payments to customers. The European Commission has yet to name Intel, but confirmed that officials had carried out “unannounced inspections” at the premises of a chipmaker. Commission spokesman Jonathan Todd said it had reason to believe the firm in question had violated European laws on restrictive business practices. A number of Intel’s main suppliers have also had their offices visited by inspectors. UK retailer DSG International, which owns PC World and Currys, said Commission officials had visited its offices in Hertfordshire. The investigation started after a complaint from Intel’s rival AMD. The initial findings of a probe by the Commission unveiled last summer concluded that the chip firm engaged in anti-competitive action to thwart AMD. It accused Intel of giving rebates to customers provided that they bought Intel products and offering incentives to companies to delay or cancel products containing AMD technology. Intel faces a closed hearing in Brussels on 11 and 12 March on the charges. European regulators have the power to fine Intel up to 10% of its annual turnover if they find it guilty of stifling competition. Intel has said it was “confident” that it had acted lawfully.

Google Android phones debut The first mobile phones to be loaded with Google’s Android software for mobile phones have emerged into the limelight. About a dozen companies such as ARM, Texas Instruments and Qualcomm showed off prototype handsets at the annual Mobile World Congress in Barcelona. The free software system was launched in November 2007 and is being developed by an alliance of more than 30 companies including Google. The first Android-enabled phone is expected to go on sale later this year. One firm showing off a prototype phone was the UK processor designer ARM. It's really a demonstration vehicle rather than a full phone, Ian Drew said in an interview. However, he said the wireless phone did show off several applications. The Google Android platform is based on open source Linux software that allows developers access to the underlying code. This gives programmers the flexibility to build applications and features tailored to individual phones. Many companies showed off Android prototypes such as Marvell, Texas Instruments, Qualcomm, NEC and ST Microelectronics. Samsung has also said that it hopes to have a phone based on Android out by early 2009. That said, Android was not the only Linux platform making waves in Barcelona. The Mobile Linux foundation said that 18 phones from seven different firms would be demonstrated at 3GSM using its Limo software. LG and Samsung were amongst the handset manufacturers showing off Limo devices.