The Yahoo countdown begins

Is this the face of Yahoo's next boss?

OK, Jerry, so now what?

Don't you know that Jerry Yang would grab Microsoft's original $31 a share buyout bid if he could turn back the clock. Of course, that ain't about to happen, so mark November 5, 2008 as the start of the Great Countdown until the company's fate gets decided by Microsoft, or some still unknown third party. From this point on, its CEO has run out of options.

Google announced Wednesday that it was backing out of its proposed search ad partnership because it didn't have the stomach for a fight with Uncle Sam's antitrust lawyers. From a Google perspective, that's a perfectly understandable tactical retreat. In the near-term, the deal would have helped Yahoo more than Google anyway. (Yahoo expected the deal would have raised its revenue by $800 million in its first year, adding an additional $250 million to $450 million in incremental operating cash flow.)

It's hard to believe Microsoft won't go after Yahoo again. At a sharply discounted price to its original offer, why wouldn't it? Yahoo still possesses a coveted franchise, but this economy is a world removed from what it was in late winter when Microsoft was hot to do an acquisition. Back then, Yang could plausibly argue to his board and shareholders the logic of holding out for a higher price or negotiating a partnership with Google.

He gambled and lost.

Yang may still object to a Microsoft sale, but with the stock stuck near its all-time lows, Yahoo's shareholders won't care what he thinks. They've been badly hosed by being too patient.

[redwall_hp]

I don't want Yahoo to fail. They're starting to get interesting again. First the awesome BOSS Search API, and their new features coming to their homepage sound interesting. I don't use much from Yahoo, though I like their APIs, and some of their properties, such as Del.icio.us.

I don't want Microsoft to buy them either. Can't stand that company at all anymore...

[stuxstu]

Yahoo is now primed for aquisition.... It is over for Yang. At least with a Microsoft merger there can be some "balance in the force young Netsurfer"...

I think 25 a share is a done deal at this point.

[rdean]

I, too, don't want Yahoo to fail. However, I don't feel that Yahoo! would be properly handled in combination with Microsoft. The cultural and technical differences are not insurmountable, but the process of resolving them would be damaging to the combined company.

My prediction is that such a combination would be eerily similar to the AOL-Netscape debacle. Yahoo would be unable to stop the stampede to the door as employees wonder how long until their jobs are rendered moot by the buyer putting the current systems into pure maintenance mode, and then Microsoft would be left wondering what the heck it purchased.

[benjwah]

It wouldn't be a combined company. It would be Microsoft, with Yahoo in it. Kind of like a body has a toe.

[Penguinisto]

Err, you folks know that there's a new party running Washington DC, a party eager to show its anti-business muscle... right?

I'm thinking that after January, if MSFT so much as breathes in Yahoo's direction, they'll be met with a solid brick wall built by a DOJ that doesn't work for Bush anymore.

/P

[Vegaman_Dan]

Err, you do know that the election is over and those elected officials have no responsibility to make good on their campaign promises, right? If you think those officials are going to Washington are there for your best interest, then I've got a bridge to sell you.

That's simply not the way politics are played, my friend. You say whatever you need to in order to get elected. Then you turn your back on it immediately and distance yourself from those promises. This happens regardless of what party you are with.

[Penguinisto]

Just look at history, Dan... MSFT was convicted for abusing its monopoly during the Clinton years. The only reason MSFT still exists is because Bush's DOJ decided not to split the thing as the rest of the planet figured would happen.

MSFT makes a perfect target, too - it gives the left a perfect excuse to build their anti-corporate bonafides without having to actually pound on businesses at large.

[fdunn3]

It would be foolish for Microsoft to buy anything but the search portion of Yahoo. It is in a position to far surpass Yahoo particularly at the Institutional and Enterprise Level.

Like he said in the article "He gambled and lost."....BIG TIME!

Don't think Microsoft's stock hasn't taken a beating either but it is still far more liquid than Yahoo. I would be surprised if Yahoo is around in 2010.

[Penguinisto]

I doubt that, Fred. Right now, MSFT is a very, very distant 3rd to Google.

[Vegaman_Dan]

Microsoft has passed on Yahoo and has another plan in play now. They don't need Yahoo. They may still buy them up if only for the customers or to prevent another company from buying it up as competition.

But I don't think Yahoo has much of a chance for survival.

[mdsuter]

It?s only 849 miles from Redmond to Palo Alto, but that might as well be light years.

The average Yahoo employee has gotten out of bed every day believing that Redmond equates to the dark side. Their peers, with whom they drink at Gordon Biersch or against whom they play Ultimate, all believe the same thing. They have spent their careers trying to disprove that ?Resistance is Futile?. So how do you convert someone for whom the battle has taken on quasi-religious overtones? A more fundamental question is ?Should you??

More at: http://iplicensing.net/category/yahoo/

That's my .02!

[alan_06]

OK... Now who's is the real winner and looser out of this issue?

More you think about it, more you'll get confused :-)
1. MS has succeeded in breaking the Yahoo-Google ad partnership.
2. Google has succeeded in breaking MS Yahoo takeover.
3. Yahoo had avoided MS takeover by convincing their investors about google ad partnership.

Right now the obvious loosers seems to be the Yahoo investors :)