Yahoo Cries Over Spilled Milk as Google's Deal Completion is Announced

It’s not exactly a huge surprise, given the anti-trust brouhaha that the proposal caused in Washington, but Google (GOOG) formally announced that its search deal with Yahoo (YHOO) is over, kaput, deceased, pushing up the daisies — it is an ex-agreement. It wasn’t just the anti-trust concerns either; some advertisers were apparently worried about a lack of choice as a result of the tie-up, and not without reason. So how badly is Yahoo screwed right now? On a scale of one to 10, I would say Yahoo is now at 11.

As John Paczkowski notes at All Things D, this deal was supposed to generate as much as half a billion dollars worth of additional cash flow in its first year, money Yahoo could definitely use. But more than that, this deal was a way of trying to stand on its own two feet (albeit while leaning on Google for support), and that is now gone. Microsoft (MSFT), which had its takeover bid for Yahoo derailed by the Google arrangement — among other things — is no doubt doing the math on another bid.

The only problem for Yahoo is that instead of a $45-billion deal at $31 a share, Microsoft is more likely to bid about half of that, and that’s if it even makes another bid for Yahoo at all. Nice job, Jerry. How many failed Hail Mary passes can one CEO throw?

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Comments

[Albhum:]

Everybody is trashing Yang for not wanting to let MSFT swallow Yahoo. Yang and his board made a decission, if they could save Yahoo, it was worth way more than MSFT offer. What nobody knew is that the whole stock market would go down so sharply, affecting everyone.
Actually, before the offer yahoo was at around 20 a share. Now it is 30% below that number, so is MS, at least.
If Yang really turns around the damaged company he inherited I still believe in the long run he will generate far more value. Another story is the one of those investors who could care less about the company future and in a disasterous market cry for the pofits never made out of that quick, easy sale.
As an enterpreneur myself I have respect for investors, but I don't feel sorry for them not succeding at speculation. Sometimes we have to care about real wealth generation, enough of brokers, please.

2008 Nov 06 05:28 AM