Yahoo's Microsoft-Icahn-Google bill reaches $73 million

Yahoo has no search advertising deal with Google, and ditto for its disappointment in luring Microsoft back to the table for an outright buyout of the entire company. But what it does have to show for its efforts is a $73 million bill to outside advisers, according to the company's filing with the Securities and Exchange Commission.

According to the SEC filing, filed last week, here are the various components that make up the $73 million bill:

Income from operations for the three and nine months ended September 30, 2008 includes incremental costs of $37 million and $73 million, respectively, for outside advisers related to Microsoft's ("Microsoft") proposals to acquire all or a part of the company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defense costs.

The Internet search pioneer began accruing its bill back in February, when Microsoft launched its unsolicited buyout bid to acquire the entire company for $31 a share. That offer was later upped to $33 a share, but withdrawn in May after Yahoo countered with a $37 a share price and time had, in essence, lapsed to complete a deal before a change in presidents.

When Microsoft stepped away from the negotiating table, Yahoo faced another fight on its hands when shareholder activist Carl Icahn launched a proxy fight against the company to gain control of the board. Ultimately, the parties settled and Icahn and two representatives from his dissident directors slate in the Yahoo proxy fight were named to the Internet search pioneer's board of directors.

Meanwhile, more recently, the company's search advertising deal with Google, which was discussed when Microsoft was still in the hunt for the Internet company, fell by the wayside this month after antitrust regulators said they would file a lawsuit to block the deal and Google opted to step back from the agreement.

While those various expenses have subsided, one continuing cost for Yahoo is defending itself against the number of shareholder lawsuits that were filed after it rejected Microsoft's initial $31 a share bid and its sweetened $33 a share offer.

When Microsoft made its first offer in February, Yahoo's stock was trading in the high $14 a share range. Today, the stock is trading in the low $11 a share range.

[The_Decider]

There is a lesson in all of this:

Don't sell your company out to wall street or VC's.

[AnonTip]

Or how about the lesson - "Don't let a dumb kid try to run a real business?"

[smithsonianwil]

Jim Cramer recently interviewed Google CEO Eric Schmidt on Obama and on the Yahoo deal:

http://equedia.com/blog/view.php/Jim-Cramer-Interviews-Google-Chariman-and-CEO-Eric-Schmidt

[gsmiller88]

Had Yahoo tried fixing their problems instead of wasting the past year they probably wouldn't be in this mess.

[crue24]

Yang is definitely out of his league, here. Yahoo has made too many mistakes and has been in long, long steady decline. When you go public you do have a certain responsibility to the shareholder and Yahoo blew it with the MS deal. I'm no MS fan, but they were offering a huge premium on the stock and Yahoo had nothing else clearly going for it, and still doesn't. I understand all the Yahoo loyalists who didn't want to see it happen, but at the same time, Yahoo is corporation and should act accordingly. They had an opportunity to sell at decent price and save the company, even if it ultimately meant the company would be forever changed. But now the company is simply going to become irrelevant. Revenues and share price are continually going down and the economy is just going to fast track it that much more. I can't imagine them surviving without being acquired and unfortunately for investors, it is not going to be nearly as profitable a deal as MS offered.

[EcuadorHomesOnline]

Exactly - 100% correct.