Yahoo's Lousy Performance All Microsoft's Fault

Mounting shareholder discontent over Yahoo’s response to Microsoft’s $44.6 billion takeover bid has inspired a legal pig-pile on the Internet company. In an annual report filed yesterday with the U.S. Securities and Exchange Commission, Yahoo (YHOO) said the company has been named in seven shareholder lawsuits claiming it has mishandled its response to Microsoft’s (MSFT) offer. What an annoyance that must be, but not nearly as annoying as the offer that inspired it, which Yahoo memorializes in a section of the report entitled simply,

“Microsoft’s unsolicited acquisition proposal has created a distraction for our management and uncertainty that may adversely affect our business.”

“The review and consideration of the Microsoft proposal (and any alternate proposals that may be made by other parties) have been, and may continue to be, a significant distraction for our management and employees and have required, and may continue to require, the expenditure of significant time and resources by us,” the company wrote in its report. “Microsoft’s unsolicited acquisition proposal has also created uncertainty for our employees and this uncertainty may adversely affect our ability to retain key employees and to hire new talent. Microsoft’s unsolicited acquisition proposal may also create uncertainty for current and potential publishers, advertisers and other business partners, which may cause them to terminate, or not to renew or enter into, arrangements with us.”

The company goes on to note that its stock price, which has been “volatile historically” (Oh, reaaaaally?) may continue to be volatile regardless of its operating performance. And this too will be Microsoft’s fault. “We further believe that, as a result of Microsoft’s unsolicited acquisition proposal, and speculation concerning a potential acquisition, the future trading price of our common stock is likely to be volatile and could be subject to wide price fluctuations,” the company said. “There can be no assurance whether a transaction will occur or at what price. If a transaction does not occur, or the market perceives a transaction as unlikely to happen, our stock price may decline.”