The New York Times reported today that in an interview, Yahoo’s CEO and co-founder, Jerry Yang, claimed that Microsoft pulled its bid for his company after Yahoo counter offered the software giants previous bid.
This is in direct contrast to claims by Steve Ballmer and Microsoft’s advisers, that stated that the bid was pulled due to Yahoo’s unwillingness to counter, and Mr. Yang and his board’s decision to settle on a price of $37 a share their ultimate refusal to budge.
“They chose to walk away after we put a price on the table, and they didn’t want to negotiate,” Mr. Yang said. “From my perspective, we were open all along to selling to Microsoft. We just feel Yahoo, either stand-alone or with Microsoft, is worth more than what they put on the table.”
Mr. Yang and Roy Bostock, Yahoo’s chairman, made it very clear in their tale of the Microhoo affair, that they were more than open to the merger of the two tech companies.
“I feel like we now have the task to continue to build shareholder value,” he said. “This is just creating another set of challenges we have to overcome as a company. We have to show the world the opportunity that we have been talking about for the last three months.”
The people they really need to show are the Yahoo shareholders who are incensed to the point of litigation.
“I am extremely angry at Jerry Yang and at the so-called independent board,” said Gordon Crawford, portfolio manager for Capital Research Global Investors, a company whose parent owns 16 percent of Yahoo, making them the companies largest shareholder.
“I’m hoping that there is such an outpouring of outrage that the board is embarrassed into revisiting this thing,” Mr. Crawford added, “but I’m not optimistic about that.”
Now Yahoo is looking at a marriage of paid search products that could catapult its biggest competitor to an even larger market share. There have also been rumors about Yahoo getting involved with AOL and Myspace, neither of which would solve the companies search monetization issues.
Silicon Alley Insider believes that all of this talk is less about setting the record straight, as much as it is about letting Microsoft know that they are now willing to budge.
From Silicon Alley Insider:
And so much for Yahoo’s previous position that Microsoft’s bid “substantially undervalued” the company. If Microsoft was at $33 and $37 was just a number Yahoo tossed out there to get the negotiations started, it seems the “substantial undervaluation” amounted to about a dollar a share.
Having gotten its fanny spanked, Yahoo seems to finally be getting religion. Jerry, for example, has told Reuters that he’s open to new Microsoft talks: “If they have anything new to say… I am more than willing to listen.”
Yahoo’s unofficial asking price is now not $37 but about $34. It will be interesting to see how much more punishment Jerry and the board will take before Jerry goes from being “willing to listen” to picking up the phone and calling Steve.
It seems highly unlikely that Ballmer’s repeal of the bid is the final note in the Microhoo opera. Market analysts were likely on point about their perception that Ballmer’s move was intended to drive the Yahoo shares down in an attempt to soften the board’s viewpoint of a competitive bid.