Yahoo Microsoft – the Sequel?

TechCrunch is reporting that Microsoft has “excused” the proposed slate of new Yahoo board members telling them that they won’t be needed anymore.    I don’t think this tells us much if anything about the status of a new deal which rumors suggest may come from the Yahoo board’s concern over losing…billions of dollars.

I think MS is just playing this very smart.  These little measures are designed to get the current Yahoo board to rethink their folly.   I think only Jerry was dead set against the merger and the rest of the board would have settled for 35 or even 34 per share.   Why wouldn’t they?   Yahoo has been languishing for years, and the chance of getting back to 34 *without Microsoft* is fairly slim in the coming lean advertising years, not to mention the fact that low morale, challenges at the company, and the declining prospects with Microsoft may take the stock even lower.

Yahoo should have sold at 33 and I think they will almost certainly sell at 35 due to pressure from Shareholders and (more importantly) heavily vested board members who are “losing”, collectively, several billion dollars by sticking to their guns in this.

2 thoughts on “Yahoo Microsoft – the Sequel?

  1. It will certainly be years–if ever–that Yahoo’s stock approaches anything over $30, much less $34 or $35. Even if the economy turns around in the next couple of years, Yahoo’s business model isn’t going to start miraculously working well enough to drive the stock price over those levels. And outsourcing Yahoo’s search business to Google is just feeding the lion your toes so he won’t eat your whole leg. Google isn’t going to be happy until their share of the display ad business is equal to their search revenue, either–and that’s going to come right out of Yahoo’s hide. You’re right, Joe, Steve Ballmer played Jerry Yang like Minnesota Fats (Jackie Gleason) played Fast Eddie Felson (Paul Newman) in The Hustler.

  2. …feeding the lion your toes so he won’t eat your whole leg

    OUCH – that is a neat but uncomfortable analogy … However based on my limited insider info I think Google has a kind of affection for Yahoo they do not have at all for Microsoft, so I think Google would be fine having Yahoo as an even more powerful second fiddle, especially since killing Microsoft is “job 2” at Google, only after making Google top of the heap.

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