Yahoo! Update

March 12, 2008

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?

Comments

  1. tunequest says:

    So… if Yahoo becomes property of Microsoft, so quickly do you think Delicious and Flickr will become ghost towns?

  2. Jon Do says:

    Not really Ghost towns … but probably it will lose from users step by step … is like other things buyed from MS … they doesn’t put “heart” int their work … almost all is for money … this is way Google will win.

    Regards

  3. suicidalsam says:

    Yay for us, and thanks.

  4. Bhumika says:

    One thing is for sure… Yahoo will merge either with Microsoft or with Google… Google seems to be coming up with its own offer for which it asked Yahoo to stay quite on Microsoft bid

  5. Mike says:

    Such a shame. Just today, I was explaining the advantages of storing your photos on Flickr, instead of a site like Facebook (which downsizes your photos).

    Problem is, you apparently have to sign up for a Yahoo! email address to get a Flickr account. I see Yahoo! taking steps to open things up, such as implementing OpenID, but it would be really nice to see them open it all up a bit more. If they were more daring, then they might win people over a bit more who appreciate that sort of thing.

    If Microsoft ended up buying Yahoo!, they’d end up with something they wouldn’t be able to use, anyway. I hope Google steps in.