Deal or No Deal? Oops, No Deal!
Look, a Yahoo-Microsoft deal could happen anytime. Just not yesterday, as it turns out.
It’s easy to be taken in by so-called “sources,” chatting up a new series of talks between Microsoft (MSFT) and Yahoo (YHOO), either to do a deal to revisit the partial search-outsourcing partnership or to try to one-up that by claiming rather grandly that there is yet another effort to buy the company whole.
But with Yahoo’s stock dropping like a knife and hovering near the dangerous $20-a-share mark yesterday, anyone reporting on the situation should have been deeply cautious about floating rumors about renewed deal-making between the star-crossed pair.
As it is often said, there’s one born every minute, and like clockwork, Yahoo’s stock got an undeserved boost due to those unconfirmed stories.
You did not hear it here first, because BoomTown suddenly got the exact same calls too yesterday–coincidence? I think not!–from “sources” touting Microsoft-Yahoo as “back on.”
But I simply could not confirm it to our site’s standards of reporting. Which is to say, aiming for trying to report with full accuracy versus repeating errant chatter that is so typical now in this deal.
Thus, I declined to crunch on that tasty, but non-nutritious, morsel and opted instead to try to get confirmation from sources who actually knew what is going on.
And those sources at both Yahoo and Microsoft, who certainly can spin like dervishes when need be, emphatically went out of their way yesterday–which is not so typical–to deny any talks were going on or that anything had changed since Microsoft had walked away from a bid for the whole of Yahoo in May or since it had lost out on another effort to do a partial deal.
While both sides did emphasize that nothing was different as of “today” (meaning yesterday, as no company ever wants to close the door, do they?), they did so since talks could obviously resume anytime.
That’s especially true, as Yahoo’s shares inevitably decline even further today when the market opens and investors take in the fact no deal is happening yet again.
That’s not to say that smart analysts should not opine about the should-haves, would-haves and could-haves of this takeover that was clearly botched by both sides.
It’s perplexing to me, for example, why Yahoo’s highly ineffectual board is not breaking land and speed records to try to revive a buyout from Microsoft or why Microsoft isn’t itching to do a deal now that the price is so low that Yahoo is practically giving itself away.
At the very least, Microsoft should have and should still try to win the partial search deal, as it needs that market share badly to compete with Google (GOOG).
In fact, right before all the noise started up, I noted rather emphatically yesterday that such talks should resume, given the cheap price and obvious need of Microsoft to acquire Yahoo’s still-attractive assets.
As I wrote:
But if Yahoo shares decline further, it should think twice. And then it should slap itself silly, until it realizes the opportunity it might be missing…
Why? Because, for all its management problems, Yahoo remains Microsoft’s single most important path to winning in the online display business and at least keeping itself in the game with Google in search and the search-ad business.
Yahoo is a much tarnished jewel, to be sure, but a jewel nonetheless.
And, if you really think hard about it, it is still Microsoft’s best chance to shine.”
That’s because, as I also wrote yesterday, also right before the heedless hubbub:
Microsoft does not have a secret plot to buy Yahoo.
Maybe Microsoft CEO Steve Ballmer should be hovering in the wings, like a digital Simon Legree ready to pounce again on poor Yahoo CEO Jerry Yang.
But he’s not.
And still the hopeful, the suspicious and, most of all, the beaten-down Yahoo shareholders continue to jump on any utterance from the software giant, even woefully mistranslating interviews with its top execs, to make it so.”
As the old cliche goes, if wishes were horses, all beggars would ride.
And, for now at least, investors in Yahoo might soon learn all about the beggar part, but none will be getting a free ride. In fact and incredibly, the road ahead looks bumpier than ever.