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What Microsoft Will Likely Demand to Get the Deal Done
Posted May 07, 2008 10:47am EDT by Aaron Task in Investing, Internet, Venture Capital, M and A, IPOsUpdated from 10:47 a.m. EDT
With rumors Jerry Yang is being "benched" and Roy Bostock will now head Yahoo's effort to get Microsoft back to the negotiating table, a few things are clear:
- Bostock, Yahoo's chairman, should have been leading the effort from the get-go, and should have been at the infamous Seattle Airport meeting where the deal broke down.
- If "we're walking away" was a negotiating ploy by Microsoft, it has worked like a charm.
The problem for those buying Yahoo stock on hopes for a revival of negotiations (or a big Google outsourcing pact) is that walking away doesn't appear to be a negotiating tactic.
From Steve Ballmer's "clearly a deal is not meant to be" comment Saturday to Bill Gates' comments Monday on Fox Business News, the message from Microsoft is clear: "We've moved on," as Windows Live GM Brian Hall put it on Tuesday.
Update: In Tokyo Wednesday, Gates added: "Now at this point Microsoft is focused on its independent strategy."
Taking that message at face value, there really appears to be only one way for Yang, Bostock, and their M&A advisors to get Microsoft back to the negotiating table: Deliver Yahoo to Ballmer on a silver platter, with assurance of talent retention, regulatory assurances, and a deal price tied to performance targets.
In other words, Yahoo needs to do a 180-degree turn from its prior negotiating tactic of "any deal but Microsoft."
Barring that, expect some major fireworks at Yahoo's July 3 shareholder meeting.
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Yahoo! Finance User - Thursday May 08, 2008 02:18AM EDT
Microsoft would have destroyed Yahoo! Microsoft can make all the stupid decisions they want because they've got a monopoly in their money making markets. Kudos to Jerry for holding onto his company. A bunch of already over paid rich white guys who would have brokered the deal lost a lot when it broke down, who cares? We'll have more compeition and more innovative products without this merger. MSFT would do its best to turn the Internet into one big unusable Vista mess without Yahoo! out there.