It would seem that Microsoft is sticking to their guns with their bid and refusing to raise the offer anywhere close to what Yahoo is looking towards. If we look at Microsoft’s share price ,it has actually taken a dip which realistically brings the offer from 44 to 41 billion dollars. We know of couse that Jerry Yang does not want to sell out to Microsoft, as he definitely has an emotional attachment to the company he co-created. It is like giving your kid up for adoption and while you have visitation rights you cannot take the kid home. The harsh reality here is that the Yahoo has many parents also known as shareholders who need to see some sort of long term positive turn around strategy plan coming from the Yahoo board. Their only other option would be to take Microsoft’s offer and call it a day.

Obviously we all know that Yahoo is courting many other companies like News Corp to assist it ,but that is not a long term plan just a save me Microsoft one. Short term great , but in the long term this could be the downfall of Yahoo anyway.

Bill Gates has stated he will not be looking to raise the bid any further, which I think means if you don’t take this offer now there will be no other. The other plan would be for Microsoft to aquire shares slowly and then make an offer for the outstanding share capital. But what I do know is Microsoft will never be able to organically grow their online business as they are already so far behind that no amount of money could change that. They need a Yahoo type of company to bring them into the game and help them with the growth part of the business they lack.

So what are the alternatives hsould they strick out with Yahoo,

1. Aquire more small high growth companies that  could boost thier presence

2. Organically grow their online business by competing head on with Google ,Yahoo and every man and his dog

3. Accept defeat and see where the road thakes them (Obviously not Microsoft’s style)

4. Focus on their core business and forget about the Interent (When hell freezes over)

5. Buyout Facebook for $15 billion and turn it into a web platform

It is difficult to say but I would go with number 1 or 5 as options to not getting Yahoo as a division in your company. 

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