It's looking more and more like "No deal." Good old Jerry from Yahoo is determined to open 5 more cases in hopes the Microsoft banker will up the offer.
Well, it looks like the banker will not only not raise the offer - but will take their dollies and go home. "As we said recently to the board, unless there's progress by this weekend, we will reconsider our alternatives," said Chris Liddell, Microsoft's chief financial officer, in a conference call yesterday to discuss the company's financial results.
Hmmm.... that's pretty toned-down from the big bully "proxy fight" words from Steve Ballmer only a couple of weeks ago.
It seems that Microsoft thought that with a pretty big number they could get this deal through quickly. Yahoo's stock price before the offer was in the shitter - and I think Microsoft gambled that the shareholders would apply pressure to Jerry & Company to accept it and move on.
We all know how that turned out. Yahoo has cranked up it's "we're not dead yet" PR machine into an absolute frenzy - announcing new platforms, offering to open up their search engine to developers, announced "great" financial results (well, they were the same as last year - but they made a good investment that gave a one-time payout of $400 million), etc.
On the flip side, Microsoft's stock was hammered when they announced the deal - so if they do decide to walk away - one can only assume that it will be "rewarded" by a bump in their own stock price - and a billion dollars worth of publicity.
But the results for Yahoo if Microsoft walks away will be disastrous - regardless of what their PR says. The company was clearly in decline over the last few years, and now that they have formed an advertising alliance with Google (someone Microsoft hates more than anyone - including open source) - Microsoft could just get plain nasty.
For example, what if Microsoft walks away? They eat a little crow - but their stock goes higher on the news, so other than a few million spent in lawyers, PR and plane fare, they're no worse for ware. But - what if they decided they were a little miffed?
They could just call up their buddies at the antitrust department of the Department of Justice and file a lawsuit against Yahoo and Google to get them to stop their partnership.
Either way - Microsoft comes out smelling like a rose. Not so for Yahoo.
Yahoo can still do a couple of things:
- Accept Microsoft's offer
- Continue to work alone - with its "great" offerings
- Accept a bid from someone else (if anyone was dumb enough to offer one)
- Continue to work in partnership with Google (and pray they don't get an antitrust lawsuit)
- Ask Microsoft to extend the bid deadline
I'm betting #2. Jerry thinks his company doesn't suck - and I think they will try to remain independent. If that's the case - you better sit by your computer Monday morning and sell Yahoo's stock short - because it's going to tank.
Oh, and if Microsoft does walk away - Jerry better get lawyered up - because not only WILL Microsoft go after the Google deal on antitrust issues - but Yahoo's own shareholders will start suing the hell out him too.
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