In an official statement released yesterday, Microsoft Corp., said it is “exploring a deal with Yahoo that falls short of a full acquisition.” They continued to say that they [Microsoft] “retain the right” to reconsider its bid to acquire 100% of Yahoo.
On May 3rd, Microsoft CEO Steve Ballmer gave up on negotiations with Yahoo saying that the price Jerry Yang (Yahoo’s CEO) demanded, was simply too high. This new proposal gives Yahoo another chance to find common ground with the largest software maker in the world. Carl Icahn (legendary billionaire investor) is threatening to oust Yahoo’s board of directors. So, decisions are going to be forced upon one side or another.
It seems as though Yahoo is not considering a compromise. Which by definition means both parties will be unsatisfied. Yahoo is playing with fire by treating Microsoft like an annoying uncle. They [Yahoo] need to realize that even though the energy and spirit behind Microsoft may feel much more “cold-and-corporate,” the point of an acquisition is to infuse both parties with what the other doesn’t have. In my personal opinion, Yahoo is overvaluing itself. I ONLY open up Yahoo when I want to be reminded of why I don’t use it. I have created email accounts to show people the invasive, “advertisement-hell” they put you through while routinely checking your inbox.
This being understood, it is safe to say that Microsoft is only concerned about Yahoo’s user-base. Microsoft has a fledgling presence in the search engine market and acquiring Yahoo’s user-base could give them the fuel they need to fight The Mighty Google.
In a Bloomberg Television interview last week, Troy Mastin, an analyst at William Blair & Co. in Chicago, said “The best strategy for Yahoo is to embrace Microsoft.” Yahoo said in a statement yesterday that it is open to pursuing any transaction in the best interest of investors.
Yahoo’s seemingly recent concern for it’s shareholders means one of two things. 1. They have realized that their shareholders are fumingly pissed, or 2. They have realized that $47.5 billion isn’t such a bad number and getting shareholders to understand the turbulent waves of these negotiations will ease the pain once the deal is done.
In a perfect world, Yahoo would be innovative enough to offer up some competition to Google. But, they’re not. So, the industry must find other ways to position Yahoo for a positive contribution… NOT for the biggest profit, or user-base. Google holds internet values and morals at such a high priority, that they will always be seen as the biggest, best and most trusted name online.
At this point, with Microsoft and Yahoo unable to work things out. Yahoo must remain close to its values and morals while at the same time working towards a solution. Backing out of this deal could destroy Yahoo’s credibility (what little they have left), as well as enrage shareholders. It’s a fine line between values, ethics, morals and flat out stupidity. We will be keeping a massive eye on this to see what unfolds.
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