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It has not been an easy week for Jerry Yang.
He's been courting rivals bid from just about anyone so that he doesn't have to say 'I do' to Microsoft, fighting off angry shareholders who think Yahoo should have accepted Microsoft's offer and seen the the first wave of redundancies in a wave of 1,100 job cuts - as well as the departure of high-profile staff like Bradley Horowitz, the well-respected executive, after he was scouted by Google.
It never rains, Jerry.
In its desperation to avoid being taken over by the evil empire, Yahoo has reportedly talked to Google and AOL about tie-ups and now the News Corp deal, which was first mooted last year; News Corp would basically swap MySpace for a 20% stake in Yahoo, as well as investing £7.7bn alongside a private investment firm.
Yahoo's just trying to boost the bid price
• There is a theory that the reports of a tie-up between Yahoo and News Corp are just "a lame ploy to get a higher bid". "Given Yahoo's desperate state of affairs, who wouldn't the company talk to?" says Betsy Schiffman at Wired. She quoted Kevin Lee, executive chairman of online ad firm Didit: "A News Corp. deal would do nothing to solve Yahoo's decline in search market share. It would allow Yahoo to create a larger display advertising property, but Yahoo already has more than enough of that inventory. I'm having a hard time understanding why this deal would happen."
Microsoft should buy Facebook instead
• "What if Microsoft just walked away from its bid?" asks Kara Swisher on AllThingsD. "One idea I have heard, for example, was that Microsoft take its $44.6 billion in cash and stock it plans on spending on Yahoo and go on a shopping spree of the Web 2.0 companies all around Silicon Valley and all over. And not just a few-lots and lots of them. And, more than one person suggested, it should start with Facebook, even at that wacky $15 billion valuation that Microsoft itself validated when it invested $240 million in the social networking site recently."
Analysts question News Corp deal
• Reuters reported concern among analysts who said that though a News Corp tie-up might have long-term strategic benefits for Yahoo, it would not produce the returns of Microsoft's $31-a-share offer. "It is hard to imagine that Rupert would be willing to put enough cash in the deal to make it interesting to Yahoo shareholders," RBC Capital Jordan Rohan said."Yahoo stock would settle out at $15 share depending on how much cash was in the picture," he said, acknowledging that Microsoft's hefty offer would make it hard for alternative bidders in a harder credit climate.
Yahoo shareholders deserve an exit
• E-Consultancy thinks enough is enough: "Yahoo should take the money and run," wrote Drama 2.0. "There are significant long-term risks for both Microsoft and Yahoo, and like most mergers, the outcome probably won't be anywhere near what was hoped for, but the smartest players know when to cash in their chips."
Planning for job cuts started ten weeks ago
• One senior executive told the New York Times that a lack of decisiveness has damaged morale even more. "They really, really mishandled this thing. That has a really bad effect on morale, and even the people who are left have a feeling things are really coming apart. It damaged the morale of otherwise good people they want to hang onto."
Expect retaliation from Microsoft imminently.
