The Yahoo Microsoft fiasco saga continues as Jerry Yang, in today’s interview with Kara Swisher, seemed to suggest he’d basically go down with the ship. Or perhaps more accurately he’s willing to take the ship down with him in what appears closer and closer to a Quixotic vision of what to do about Microsoft. Yang seems to suggest two incompatible things – first that Microsoft has not given a clear offer to Yahoo and second that:
“Their motivations are suspect and there is simply no good reason to think they will actually show up at the end of the day.”
Huh? MS is clearly prepared to buy Yahoo. This is obvious to everybody including Jerry. He could argue that they are going to screw up Yahoo after buying it, but that rings a bit hollow given the sad conditions of the company right now. In fact it’s hard to imagine how Yahoo, a key brand in the key global sector, can be doing so poorly right now. How in the world could Microsoft screw the company up more than Yahoo is screwed up right now?
Even if Microsoft *is* going to bring devastating changes to Yahoo, there is a shareholder obligation here that probably is not met without a sale to Microsoft. It is simply no longer viable to suggest that an independent Yahoo is likely to show the revenues required to bring the stock to 33+ within a year. Without any Microsoft interest YHOO would be trading at about $18, so the likely Icahnesque MS offer can arguably be viewed as a premium of close to 100% on what shareholders can expect if this deal *really* crumbles, which is what Yang clearly wants to happen.
I agree with Swisher:
… even with all the noise, it should be entirely clear by now that Microsoft and Yahoo need each other.
Disclosure: Long on YHOO