How Sincere Was Yahoo

Posted by: Catherine Holahan on June 13, 2008

I was listening to the replay of Google’s partnership announcement with Yahoo today. Something Google CEO Eric Schmidt said towards the end of the call made me question how sincerely Yahoo CEO Jerry Yang
considered Microsoft’s offer. Schmidt said:

From our perspective we started talking about, talking to Yahoo in early February and the executives have had long social relationships over the years and know each other pretty well so we began by saying is there a partnership that would make sense, is there one that is strategic for both companies, and in particular a partnership that would allow Yahoo to remain independent.

It seems to me that Yang should have entered those conversations by saying: “is there a deal we can strike that would make Yahoo worth more than $33-per share?” Not by saying is there a deal we can strike that would be strategic and, in particular, keep us independent.

In my mind, Schmidt’s statement appears to give credence to Carl Icahn’s claims that Yang never wanted the Microsoft acquisition to happen.

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