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Jun 12 2008

Yahoo strangles deal with Microsoft

Microsoft_Yahoo The deal that had had everyone’s ears to the meeting room’s walls was thought of to be dead and gone after Microsoft failed to convince Yahoo for accepting its takeover bid. Everyone had some hopes perhaps that it might just rekindle, but with Yahoo’ statement it was made clear that discussions related to either a partial or a complete takeover are now officially dead.

There have been numerous attempts by Microsoft to acquire even a grain bit of Yahoo over the last several months, whether this is what irritated Yahoo (that has been at split ends in every matter) or more likely that Yahoo is speeding up to announce a partnership with Google. Knowing that there have been trials where Google ran ads on Yahoo’s search results and the probability of this trial being extended is quite higher with an announcement being waited for any instant.

What effects (immediate ones) it has had over Yahoo? According to reports Yahoo’s stocks sunk nearly 12%, right after it announced a quits with Microsoft, not just that the shareholders sent the stock rumbling down to $23 from a starting $26.33, keeping in mind that Microsoft had offered $31 a share in cash and even rose that to $33. But you don’t expect a giant in its own class to stay there and take up all the tantrums, Microsoft walked away once Yahoo’s board showed no interest.

This is but just one battle along with many others Yahoo is struggling through; who can forget Carl Icahn who is bent upon trying anything to get Yahoo into a deal with Microsoft and had even gone far enough to call the removal of its Board members. Then yesterday there was Jeff Weiner who announced plans to quit on Yahoo. The only good thing that Yahoo direly looks up to is the partnership with Google, another rival in business.

The idea of Yahoo hitting out on Microsoft could very well be because of this Google/Yahoo deal in way; something that might just be the reason why Microsoft has tried tooth and nail to win over Yahoo. Why? Well if Yahoo and Google (that holds almost the entire market share) partner, Microsoft’s plan at neutralising Google’s influence would end abruptly as it would then hold almost 90% of the market share.

Whatever the results come out, Yahoo with this announcement has at least shown some sense of direction after months of complete confusion; something you don’t expect from a giant of its sort.