I guess someone at Yahoo did not like being bought by Microsoft and showed Microsoft’s offer the door. I am sure you have read about the offer made by Microsoft to buy Yahoo. There was a lot of talk how the Yahoos (Yahoo employees) felt about the offer and nobody was really looking forward to see Steve Ballmer take the reigns at a combined company. So, it was not a surprise that Yahoo founder Jerry Yang announced that Yahoo would not be up for sale for the price offered - closing the door on a quick deal, but leaving the door open for a higher offer. I wonder if the calculation of attracting a higher bid offer will actually work out? I wonder if Yahoo can actually afford not to be bought by Microsoft? Yahoo has been losing market share quite a bit and has no real reply to how to turn business around. Without having an idea how to re-energize the employee moral and to get the business attract more visitors (= customers) this is a lose-lose situation. The Microsoft offer stirred up emotions and energized the Yahoos to stick together and to show that they can do better, but how long will this last? The Microsoft offer pushed the Yahoo share price to ~$29.00 (note: I sold my Yahoo stock at $29.40 last week after I had bought it when the price was down in the dumpster a couple weeks before that). Some of that will stick to the share price in expectation of a higher bid. But the overall fundamental data for Yahoo has not changed and the price is too high to stick too long if no offer arrives. If I would be Microsoft, I would let Yahoo go. Let the stock price go back down and then buy the company in a hostile takeover. Microsoft will probably end up saving a couple billion dollars that way.

If Yahoo does not respond fast by turning the business around, the stock price will go way below $20.00 (where it was before the Microsoft offer came along) and the Yahoos better get used to that kind of stock price. The whining will be loud, but that’s what they wanted in my opinion. Google is already having its hands in this mix by offering help for Yahoo, but why do you think Google is doing this?! They don’t care if Yahoo goes down the drain, they only care about themselves. But they do care if Microsoft will takeover Yahoo and suddenly gains a lot of search power that way. A combined Microsoft/Yahoo is a real threat to Google and Google will not be standing there with a “wait and see” approach. I am sure Sergey, Larry, and Eric are already privately buying larger chunks of Yahoo stock.