There's been no shortage of opinions on the failed takeover as bloggers offer plenty of advice for CEOs Yang and Ballmer—plus a few laughs
On Day 2, the finger-pointing began.
The collapse of the Microsoft-Yahoo courtship and immediate 15% retreat by Yahoo's (YHOO) shares, albeit not quite the meltdown that some expected, led many bloggers to assert that CEO Jerry Yang had blown it. There was plenty of bile directed northward, as well, to Microsoft (MSFT) headquarters where CEO Steve Ballmer stands accused of botching a dalliance he'd so recently described as crucial to the software maker's future.
Andrew Ross Sorkin of The New York Times took both sides to task on his Dealbook blog: "Yahoo may look like the big loser…but for Microsoft, this has been a remarkable lesson in how not to do a deal." Ballmer "miscalculated from the start," misreading his own shareholders and employees, both of which "hated the deal." But most of all, Sorkin wrote, "Ballmer didn't realize—though he had been warned by his advisers—that when you make a blockbuster unsolicited offer, you must be prepared to win. Not necessarily win at any cost, but win at a cost within reason. (Just ask Rupert Murdoch.) And the truth is, the few extra bucks that Yahoo wanted in order to save face was within Microsoft's ability to pay without wrecking the economics of the deal."
Yahoo Takes Some Heat
Sorkin went on to belittle Yahoo Chairman Roy Bostock's statement that many of Yahoo's shareholders agreed that Microsoft's $33-a-share bid undervalued the company. Responded Sorkin: "As if. Most of the big investors I spoke with, even long-term value investors, are furious at Yahoo."
Likewise, in a story titled "Yahoo Investors Up in Arms," Pete Carey of the San Jose Mercury News quoted a number of unhappy stockholders: "I haven't spoken to one Yahoo shareholder who is happy," said Eric Jackson of Ironfire Capital, a small, activist hedge fund. Jackson said the dozen investors he'd spoken to were "upset, frustrated and wanting to know what they can do." Larry Haverty of Gabelli Funds' GAMCO Investors said: "Jerry has not given the shareholders a vote in this. The shareholders never got a chance to say whether $33 was a good price or not, and people, including myself, are very skeptical about the forecasts he's put out."
At Silicon Alley Insider, Henry Blodget fell firmly into the Ballmer camp: "Yahoo has launched a PR offensive to try to get itself off the hook for blowing the negotiations. The message of this campaign is that Yahoo showed that it was willing to come down in price…. Yahoo is now telling this story to anyone who will listen—because the mercurial Ballmer really did get over this deal. (What Yahoo isn't saying, as it rolls out its global don't-blame-us campaign, is that OF COURSE Steve Ballmer is over this deal. For this merger to have a chance of working, both companies have to charge into it with 100% enthusiasm.)"
Curtains for Yang?
Noting some blistering remarks by Yahoo's biggest shareholder, Gordon Crawford of Capital Research Global Investors, Kara Swisher offered Yang a cautionary history lesson "for blowing the Microsoft deal." On her BoomTown blog, Swisher wrote: "Uh-oh, because BoomTown has seen this story before. It was back in 2002 and the exec under Crawford's withering gaze then was former AOL Time Warner (TWX) Chairman Steve Case. Jerry Yang might want to take notes, as the situations are a little too familiar to ignore." Crawford can be "active and relentless…when he gets irked by execs who disappoint him," Swisher pointed out; Case was forced out by early 2003.
Indeed, Erick Schonfeld of TechCrunch raised the possibility that Yang may already be losing his grip on the Yahoo lasso. Noting that it was Bostock rather than Yang who gave Yahoo's initial response when Microsoft broke off talks, Schonfeld said there were unconfirmed reports the board met on May 6 "and authorized Chairman Roy Bostock, not CEO Jerry Yang, to call Ballmer about restarting negotiations.… If this is true, it makes you wonder who is really in charge at Yahoo."
Schonfeld looked beyond the blame game to ponder other possibilities: "The Times of London is reporting that Microsoft and AOL are in 'preliminary talks' about an acquisition. Of course, Microsoft is still talking to everybody at this point, except maybe Yahoo. Whether it truly intends to set its sights on AOL is unclear because it needs to talk to AOL at the very least as a strategic ploy to try to thwart any possible deal between Yahoo and AOL."
Finding the Humor
This being the snark-o-sphere, of course, some bloggers just used the breakup spectacle to poke some fun. Wil Shipley, founder of the independent Macintosh software developer Delicious Monster, posted this observation on his public Twitter feed: "NEWS FLASH: Dinosaur decides not to buy albatross."
At Gizmodo, Wilson Rothman put it this way: "Bottom line: Jerry finally figured out everyone hates him for screwing up a good thing, and now he's sitting there calling Microsoft's number over and over, bottle of Beam by his side, hoping beyond hope that Microsoft, and not Microsoft's angry mom, picks up. Actually, Jerry, from what we've read, we're not sure anyone's gonna pick up."
Astride this blog entry was a photo of Yang with a cartoon-dialogue bubble reading: "Baby, Wait! Baabe? Wait! Baaaaabe!?!"