We're all accustomed to a certain lifestyle, and most folks fall on tougher times at least once or twice in life, and have to downgrade their spending. I'm not suggesting folks here are a couple of paychecks away from being homeless, as I assume we're all of at least average intelligence and have some savings, good health insurance, and don't consider debt a fun hobby...just that we're all pretty spoiled, and we all probably have some expenses we wouldn't hang on to if our own personal revenue took a dramatic turn south.

But, I agree. I hope that folks who work in volatile industries (like finance, or our very own home turf, technology, to give another example) are thinking ahead when times are good, and have an understanding that times will not always be good. (You guys who missed the first bubble know that, right? We will see another crash in tech. Don't imagine human nature is so dramatically different this time around, or that enough of the folks who experienced the first one are still around and taking part to impart wisdom to prevent it from happening again. It'll look different, because it won't be played out in the public markets, and the names will mostly be different...but it'll come, and not every high flying Web 2.0 company will survive it.)

I come at this from the other perspective. I was a business guy who has learnt some hacking and got into the whole startup thing about 2 or so years ago. Nearly all my friends are non-hackers, they laugh at me when i receive tweets and think I am crazy and raise eyebrows when I make some programming joke.

But you know what, underneath it all they kind of envy me because I have a palpable passion which many of them lack. They see that for me, life is not something you endure its something you enjoy. I have recently made more hacker friends and have great conversations with them...

But ultimately the people i get on best with are the entrepreneurial types. They can be selling lemonade on the road or trying to do the next big web thing, they dont have to be hackers and so i would suggest you broaden your pallet. Look for those kind of people.

Mix and match and you will be happy. I am sure u can have friends who have little interest in internet startups but still get on well with. I just hope u have something more to you than internet startups.

I can't personally see why Yahoo would be worth $38 a share. The job of the board is to do what's in the best interest of shareholders but ultimately it personally seems this deal was not rejected because of the numbers but because of the sentimental attachment to Yahoo independence.

Expect some litigation

The shareholders sue the management, the management spends its time defending itself from lawsuits rather than leading innovation and increasing stockholder value, department projects go awry and more employees leave, and the stock drops. Microsoft makes the same kind of offer a few years later, but at an even lower price. The new management, seeing what happened to their predecessors, will take the offer, and Microsoft gets all of Yahoo!'s assets at a bargain price.

It's absolute short-sightedness on the part of stockholders. Surely the mere fact that Microsoft was willing to buy the company at a 70% premium indicates that the stock was undervalued to begin with, and that people with the tech & business knowledge to see the big picture (not just the Microsoft execs, the Yahoo! execs too) knew the value of the company could be increased.

Even if the management at Yahoo! can defend itself from these lawsuits, they'll have been put on the defensive, on every front. No major initiatives, no bold new plans, no big mergers or acquisitions that could actually help the company; if they rock the boat a second time so soon again, they won't avoid being tossed out. So while they stay the course set by the backseat drivers who don't even have a full view of the road, Microsoft is free to out-compete.

That does not follow. MSFT might see more value in yahoo as a part of msft than yahoo run independently.

Perhaps you are right. But shareholders rarely hold stock to build good businesses they are there to make money. They would happily invest in a bad company if it was about to be bought out for a huge premium. Once you go public, few things matter other than the numbers.

Plus 72% of Yahoo shareholders are professional money managers, arbitrageurs, and regular investors. These people are likely to want this deal to go through.

It's not only bad VCs that can do this, apparently bad shareholders can too.

They should have dumped their stock when the offer was first floated (and stocks reached about the same premium MS was offering). Yahoo's management never said it would accept that first offer and all shareholders who "lost" money are those who expected a reversal of the initial positions ("we won't pay a penny more" and "we will not sell at this price").

Things like these happens all the time.

And I would not rule out an evil plan where all MS intended was to keep Yahoo's management buried in zillions of frivolous lawsuits (that would have to prove Yahoo's management somehow knew this offer was in Yahoo's shareholders' best interest and resisted despite of that)

IIRC, MS was buying back stock. By making this offer they got a nice discount.

It is not their responsibility as shareholders to do that, but it is the responsibility of the company to offer the best value to its shareholders.

The market thinks about this, and MSFT's price when the markets open tomorrow morning reflects their guess as to whether I will get 51% of the company or not, whether Ballmer will have me killed^H^H^H^H^H^H tied up in litigation to prevent me buying the company and firing him, whether Yahoo will raise some money from Google to buy MSFT as a white knight, whatever.

The point is, the market price when a company is "in play" reflects a bunch of people making wild-assed guesses about the possible outcomes and the relative likelihood of each outcome.

If you are strictly in it for the money, it's your responsibility to make your own guess. If you guess is higher than the market value, you hang on to the stock. If your guess is less than the market value, you sell.

Lawyers will do anything, but IMHO, the only time you sue management is if they make a promise they do not deliver.

But what if Ballmer stands up and says, "Do not sell to Reg for $35, we are $28 today but I am going to buy Yahoo and our stock will be worth substantially more than $35 as a result of the transaction." I don't get my 51%, and then Ballmer doesn't buy yahoo. Now shareholders should sue, they hung on to their stock because of what Ballmer promised.

Consider what happens if MSFT's stock trades at $33 and Ballmer blocks me from buying MSFT in court, then the stock drops back to $28. I can see a lawsuit. But what really happened? Shareholders culd have had a sure $33 in cash by calling or emailing their broker and saying "sell."

They _chose_ to hang on. Why? because they gambled on getting $35 if I got 51% of the stock? or hoping for $40 if I had to raise my bid? That's their gamble, why should Ballmer be on the hook for their wagering?

Hanging on to your stock because you guess that the stock will be worth more is entirely your problem. Hanging on to your stock because management make vague promises about the long term value of the stock is also your problem. You certainly can't sue the week after the offer.

But Yahoo management has a legal obligation to do what's best for the company's shareholders. Unless they've got a silver bullet that will double YHOO's market cap soon, their performance on this front seems to be below average.

This is a company with virtually unlimited resources (talent, cash, experience, partners) that wants to win every war, but can't seem to win even a single battle as the world passes by. Whats missing? Leadership. Time for vision to replace bullying. Stay tuned...

The two things they lack are respect for their competition, and respect for new ideas. The ideas were there, but Microsoft didn't listen. Their competitors did.

Probably the result of Microsoft getting huge and evil and not caring about their customers. They didn't notice that technology was passing them by.

And then there was Google. When you get a lot of smart people working on something and give them a head start, it makes it very difficult for a competitor to catch up. :)

I don't think Yahoo is much better. If the average Yahoo shareholder understood how bad "Panama" is given all the hype it got, they probably would have sued Yahoo by now.

http://www.sunworld.com/swol-01-1996/swol-01-apple.html

The board turned Sun down and then went out and paid $400 million to buy NeXT. For all intents and purposes, they paidf $400 million to buy an operating system, hire an OS team headed by Avie Trevanian, and oh yes, provide a nice signing bonus for their new part-time CEO, some guy named Steve.

Lots of shareholders grumbled.

Of course, that was Apple and this is Yahoo. I don't personally think Jerry has Steve's touch, but I sincerely hope he makes me look like the wrong end of an Equine.

Steve Jobs came back in 1996 - it took 5 years for them to launch the iPod. It's anyone's guess where Yahoo will be in 5 years - maybe Jerry Yang will be looked at as a hero, maybe not. Predicting Yahoo's position five years from now is impossible.

Maybe radical changes can only start within a certain distance from the top, and as the company gets bigger, the bottom moves further away from the top and can no longer initiate those sorts of things. Just a thought.

So I studied Buffett, Peter Lynch and few other well known investors strategies. It took me about 4-6 months tracking their histories and the reasons behind their decisions. From this I developed my own strategy based largely on Buffett's and its worked a treat. Generally getting about 15% growth a year.

But then I spend weekends looking at annual statements, reading investment forums and have even gone to the Annual General Meetings. For me its all fun.

I guess the Googlers may not have time for that but I believe it makes no sense buying stock of companies you can reasonably assume will perform badly for the next 5years or so (e.g. mortage companies!). Thats what you do when you buy an index fund. You get the good with the very bad.

In which case it would seem logical to make x million the quickest and easiest way possible. I think many will agree its easier to do that building "mundane, income-producing businesses" than trying to create the next Google. In which case, keep the mundane apps coming...

I'd imagine 37signals is in that category too...it sounds like they're making a few million in profit each year.

It's also possible to have a mixed model, which is working very well for us. We do some consulting work but only pick clients that are interesting in terms of improving our products or doing work we like. This allows us to be profitable and work on our own interesting stuff without the pressure of concerned investors.

update - just to be more explicit, the founders of a business need not be involved in its future to make it successful.

Out of interest how are they handling unicode support?

http://code.google.com/p/starling/