My last post was February, so I’m well overdue. It’s now Memorial Day and what do you know, I have a little down time ;).
Well Yahoo made the blunder of shunning Microsoft’s offer (full disclosure, I’m a Yahoo stockholder – and as such I’m pissed). Most Yahoo stockholders, both holders prior to the MSFT offer and new activist investors such as Carl Icahn, are pretty upset as well. Icahn so much so that he’s trying to salvage the deal by ousting the YHOO directors. He’s and the other major holders should be upset. Jerry Yang and Yahoo’s board have lost site of their principle fiduciary responsibility of maximizing return to their shareholders. The MSFT offer was generous. Start listening to Kenny Rogers Jerry… you got to know when to hold ’em, know when to fold ’em.
As of this writing MSFT has reportedly come back to the table with a revised proposal that offers to buy part of Yahoo (the search advertising business) and taking a minority stake in the remainder. If that deal happens, I doubt it will be as lucrative to YHOO shareholders as the cleaner outright purchase would have been. If they couldn’t get that done – I see little hope in carving off pieces.
Yahoo is also reportedly discussing outsourcing the text ad sales to Google after a successful pilot program. This baffles me even more. I guess they’ve thrown up their hands in competing in this arena. If that’s the case – and it’s not a core strategic focus, why not sell it to Microsoft?
Someone (anyone please) needs to give Google a little competition in the area of paid search.