How Microsoft's Letter Is Good for Yahoo

With the letter that Microsoft (MSFT) sent to Yahoo's (YHOO) board on Saturday, the MSFT-YHOO negotiations took a break from being entirely leak-based. Finally, some actual communications between the two companies, not just vague reports of meeting in the WSJ.

That's good for Yahoo. Media-based negotiation was not playing to its strength. Microsoft, in a sense, was free-rolling. The market wouldn't mind if it dropped the bid entirely, and to some extent, a successful bid is priced in, so they've got nothing to lose. Yahoo has everything to lose, and so Microsoft had the power to make Yahoo's stock dip at a moment's notice, just by coughing.

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Anyway, an argument we've heard before, from CNET's Charlie Cooper, that Microsoft should buy Salesforce.com (CRM). I don't really buy it. But speaking of Salesforce.com, did you know that CEO Marc Benioff recently held a live debate with SAP (SAP) founder Hasso Plattner on the future of software? It sounds like it was awesome. Larry Dignan has a partial blow-by-blow.

Comments

[Robert DiAl...:]

Enough already. Close the deal Microsoft. Don't overpay. Hang tough and get it done. Yahoo is foolish if they push the envelope. Yahoo was trading at a terrible price before the offer and their earnings will not dazzle. Get what you can and move on.

2008 Apr 06 01:00 PM