Well, it’s back on. I have a longer post on this debacle tomorrow but all I can do for now is quote myself smugly:
I’ve said it many times before but Microsoft must be crazy. Even if they got Yahoo for free it would be a waste of money. TC says:
Another source at Microsoft reiterates to us that they’re a buyer at the right price, but isn’t saying what that price is.
I predict that price is – ding – $31 per share.
The more I read about this dude the more I like him. Eschewing the usual corporate bromides he writes:
Until now I naively believed that self-destructive doomsday machines were fictional devices found only in James Bond movies. I never believed that anyone would actually create and activate one in real life. I guess I never knew about Yang and the Yahoo Board.
What a card! I also reverse my view that MS is wasting its money, we have had at least $45bn of entertainment. Cheers Jerry!
Pic: Boston Globe
Buying Yahoo will be the worst mistake in the history of the Microsoft Corporation. The Ichan boot recently connected with the Yang backside clearing the way for the catastrophe. Microsoft is a big, slow moving, well organised company founded by a brilliant strategist. Yahoo is a big, slow moving, badly organised company founded by an terrible strategist.
Microsoft are behaving like a kid who has seen a new toy. They have a perfectly good business making operating systems and enterprise software. Instead of focusing on this area of expertise they are tossing out half baked rubbish like Sharepoint to chase after a company they will never be able to integrate and will end up selling for half of what they bought it for, if they are lucky. Yes there is a lot of money in online advertising, Google may eventually be given serious competition from somewhere but certainly not from Microhoo, if it ever happens.
Buying Yahoo is the obvious but wrong move. They should be picking up companies like PBwiki, Connectbeam and Trampoline Systems to build the next generation of enterprise apps which will ultimately replace Office. Instead they are going to blow their entire pile on Yahoo for the privilege of managing its decline more efficiently.
My inaugural post was on the mystery of Yahoo and things have not got any clearer since then. Why, why, why does Microsoft want this company? Why do they think buying an inferior search engine will help them catch Google? I said in the original post that the only way Yahoo will catch them is by actually using delicious properly, something they have never shown the inclination to do and something MS is even less likely to achieve than they are.
It now turns out that the Terry Semel turned down $40 per share which has shareholders reaching for the smelling salts and lawyers. To cap it all the lawsuit had unearthed a memo from Jerry Yang arguing that doing the search deal he subsequently brokered with Google would create an effective monopoly in search.
What will Ballmer actually do if he ever gets Yahoo? All he will end up with is an even bigger, slower company when what he should be doing is making MS smaller and nimbler.
Read more:
On breaking up Microsoft
On Yahoo’s problems
On breaking up Yahoo
As predicted Microsoft is back in for Yahoo although this time it is not a takeover which is proposed, rather a search deal. I can see two explanations for this, one is that MS wants to spike Google’s guns and the other is that they are pulling the classic estate agent’s trick of showing you a shocking house then taking you to a reasonable one. The mistake Ballmer made last time was to show Jerry the nice $33 per share house first, before taking him to the crappy search deal shack.
Even better from Ballmer’s point of view is that this time a host of angry shareholders have reddened Jerry’s cheeks after the last deal fell through. What Yahoo’s shareholders really want is perfectly simple: money. The current Yahoo board may have some philosophical objection to Microsoft money but the shareholders don’t care. They have had enough of Yang, Bostock et al farting around and now they want the cash. To them a search deal is worthless. As Wesley Snipes said in New Jack City, money talks and bullshit runs the marathon.
Microsoft will play them around for a while longer with this nonsense then put the $33 offer back on the table (or the $31 if they are feeling cruel) then let the Yahoo shareholders’ hungry bellies do the rest.
