A fair amount of time has passed since the spurned Microsoft offer to purchase Yahoo!, but that’s not a good thing for Yahoo!.
Two of the alternate options floated about – a partnership with News Corp or a merger with AOL – look to be off the table. Rupert Murdoch himself said no dice, and AOL has problems of its own – the company is “disintegrating” and the company itself is rumored to be up for sale.
A larger issue is the continuing economic deterioration. There are some serious economic headwinds that aren’t letting up anytime soon.
According to Silicon Alley Insider, a key moment will be Yahoo!’s earnings in late April. If less than stellar (which I’m predicting as such) the stock will take a hit, and the outstanding Microsoft offer of $31 a share will look increasingly worth it to shareholders and management.
Microsoft goes about its business until early April–nominating its slate of board members, preparing for a hostile shareholder meeting–and then, just after Yahoo reports a horrendous first quarter, pulls its offer for the company. Yahoo’s stock collapses, costing shareholders 40% overnight. Jerry & Co. are pummeled with shareholder complaints and lawsuits, and Yahoo’s employee and shareholder morale hit all-time low. Then, just when all hope seems lost, Microsoft comes charging back and saves the day with a $25 bid, and Yahoo owners flatten Jerry & Co. in a stampede to tender their shares.
Sounds like a crappy way to go for Yahoo!. Google?