Posted July 14, 2008 10:05 am by with 12 comments

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It’s times like this, that I take my hat off to mainstream media. The ability to keep up with the ongoing Yahoo/Microsoft/Icahn love triangle is something MSM journalists have honed down the years–even if it takes two New York Times staff writers to keep up!

The bottom line is that Microsoft (and Carl Icahn) last week submitted a new, sweetened bid for Yahoo’s search business.

The offer on the table was a revision of Microsoft’s previous bid for Yahoo’s search business, in which Yahoo would effectively outsource the advertising that runs alongside search results. This time, however, Microsoft would shorten the 10-year agreement to five years, while guaranteeing that Yahoo would earn $2.3 billion in annual revenue for five years, up from the three-year guarantee of the original proposal. The contract could be renewed for another five years.

Microsoft also proposed having Yahoo sell its Asian assets. It also proposed making an equity investment of $3.9 billion and a preferred debt investment of $2.8 billion.

That was rejected by Yahoo on Saturday. However, the struggling company turned around and suggested it would be interested in Microsoft’s original acquisition offer…

Yahoo’s board convened with its advisers on Saturday in a meeting that lasted more than four hours before informing Microsoft that it had rejected the bid. It then reiterated its willingness to sell the whole company at $33 a share.

“While this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders,” Mr. Bostock said in a statement.

That’s Yahoo chairman Roy Bostock accusing Microsoft of being erratic and unpredictable! I may send him this cartoon:


  • It is really interesting how often high paid “suits” ruin their company by setting their ego first. Mergers and acquisitions are the most dangerous areas for this behaviour. Some try to get a merger through to push up their ego (see HP), others try to fight it for the same reason.

  • Great cartoon. It appears that this thing is going to get more and more cartoonish anyway. It’s getting to be like Corporate America Meets the WWE. Maybe someone will hit Jerry over the head with a folding chair and take the company by force. Then they will need to stage “The To Do Over Yahoo! 2”. I’d pay $39.95 to watch that for sure.

    Frank Reed’s last blog post..Face It Yahoo – You Are NOT A Search Engine!

  • They need to show they have a plan for people to take them seriously as an independent. Needing to partner with Google to improve their search advertising doesn’t really show strength. If they showed a plan for their advertising unit, or started making moves of their own to be a top player rather than settling for second fittle to Google, maybe then people would think they’re for real.

    Erik’s last blog post..Surrounded by Freelance Entrepreneurs

  • I’ve figured it out. Yahoo is really a female and just can’t make up her mind!

  • A classic example of the pot calling the kettle black, indeed! What I find interesting about the latest offer is that Microsoft is trying to get Yahoo to sell their Asian interests. That is the biggest future market, with little penetration and a huge population. Both Yahoo and Google are courting the chinese especially, and trying to get them to sell their Asian interests won’t happen in a hurry.

  • Just like a young lady which just refused a man’s proposed, than she become regret for her decision.

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  • Hahaha Tiffany. That is so true! Fickle fickle….

  • JJ

    I think Yahoo is playing a little too thin. They may loose the whole thing altogether.

  • As Alex said, Yahoo mind is a female mind. Not able to decide what they want. They are highly unpredictable. Lets see want will be the conclusion.

  • Being in a state of confusion mind, Yahoo may end up in a big mess. They are not concentrating on their business and loosing a lot. Compared to last year the search engine market of yahoo is gone by about 10%. They should resolve this problem very soon if not they may end up in a scrap.

  • Yahoo wants to live a peaceful life on its own. Others should just shoo off 🙂

    Travel Point’s last blog post..The Samba of Brazil