Microsoft has told Yahoo! they need to accept the January bid by a certain date (three weeks from now) or Microsoft will go “hostile” - meaning a proxy war and a lower bid.

Certainly, Microsoft still retains the upper hand. I agree with their statement that since January, the economy has deteriorated significantly. It won’t be better in three weeks, and will more likely be worse.

If Yahoo! turns down the Microsoft bid, or lets the deadline pass, Yahoo! stock will certainly shed all the gains it has taken on since the bid was floated, surely sending it below $20.

The next key date to watch is Yahoo! earnings: April 15. If they suck, hello Microhoo. It’s also possible that Yahoo! management knows all too well that they will suck, and will prefer to just join up with Microsoft before April 15 so those crappy earnings be someone else’s problem.

Of course, Yahoo! could always report some awesome earnings come April 15 - but seriously, the way things have been going - do you really think that’s going to happen? Hello, Microhoo. I just don’t see this working out any other way.

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