What a birthday gift for Jerry Yang. He is turning 40 today (6th Nov)
The last hope for Yahoo to keep Yahoo independent from Microsoft is over. Google announced they are moving away from the Yahoo-Google advertisement deal.

For those who are not aware of the history, Microsoft showed interest to buy Yahoo at $33 per share i.e. $47.5 billion total. At that time Yahoo was getting traded around $28. Yang responded with the price $37 and Microsoft refused.

Yang with Google Founders

To make the acquisition impossible, Yahoo made the ad sharing agreement with search giant Google. This deal was helpful for Yahoo in short term as they're getting more ads hence more revenue from Google. But in long term, they are doing nothing but sleeping with the enemy. All this is just to stay away from Microsoft.

But fate it seems, Yang has run out of options now. Google has said bye bye.

Many of the Yahoo senior executives left the ship already, others are going one by one. Share are now in 13-16$ range. Finally, Yang is now asking Microsoft to offer another deal for Yahoo. Another option can be merging with AOL, but it is again difficult due to AOL's relationship with Time Warner.

Balmer must be very happy with all this.

Microsoft is happy as the control is in their hands now. Beggars are not choosers. They are getting Yahoo at half the price than their previous offer. But considering the market situation few months before and now, Microsoft has also came down. Hence its not very easy for Microsoft as well. But with the power of money, they can do it.

What about Mr. Carl Ichan ?

He had plans to make great money with old Microsoft deal, but now being one of the major shareholder in Yahoo, he is also the part of the sinking ship.

Why all this happened ? Where exactly Yahoo went wrong ? As per my view, they did almost nothing in last 2 years compare to their competitors - Google and Microsoft. Both advanced with their own talent, research and acquisitions - power of money. Yahoo lacked on all these fronts. They also lost their talent, their senior management executives one by one which worsen the situation. This failure was well exploited by wall street to put immense pressure on Yahoo board. They failed to manage it well and made wrong decisions. Now the situation is not under their control. What they'll end up with ? Only time will tell ...


mandar.deodhar said...

And finally ... Yang is stepping down ....