At Least I'm Not The Only One

Posted by: Arik Hesseldahl on February 09

At least I’m not the only one who thinks that Microsoft + Yahoo = A Good Idea. Yahoo’s board of directors is sending Microsoft a “no thanks” letter this coming week in response to its unsolicited acquisition bid, according to this Reuters report. As Rob Hof notes next door on the Tech Beat blog the board is holding out for a price far north of the $31 a share that Microsoft bid a little more than a week ago now. Rob also argues in this week’s magazine that its probably a fiduciary move that will only forestall the inevitable, given Yahoo’s limited options.

I for one am pulling for Yahoo to remain independent, or at least stay out of Microsoft’s hands, whether that means a partnership with Google, or whatever it takes. Not only that, but I think its a bad move for Microsoft, and I outlined my reasoning in my open letter to Steve Ballmer on Friday. Big tech mergers by and large don’t work. And in grabbing Yahoo, Microsoft is trying to re-fight a war it has already lost to Google. Better to cut lose those business units where Microsoft isn’t a leader, pour some resources into research and development, and to try and get ahead of the next important trends on the Internet.

Microsoft shareholders don’t appear to like the idea of paying so much for a strategy that’s unlikely to yield any positive results. They’ve slashed Microsoft’s share price by more than 12% since Microsoft made its move, and the farther the stock falls, and the higher Yahoo pushes its minimum price, the lower you can expect the stock to go.

Meanwhile, Peter Kafka at SIlicon Alley Insider puts it thusly: Yahoo will reject Microsoft bid. Translation: Yahoo desperately hoping Microsoft will raise bid.

Microsoft? It’s your move.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/