Yahoo/Microsoft – the hunt goes on and on

This Yahoo/Microsoft thing just won’t go away will it? Just when you thought it was dead and buried, Microsoft has said publicly that it would be willing to buy the company, if only it were being run by a different bunch of people.

If you were a Yahoo board member, you’d have to feel happy about that. Picture what their kids tell friends at school: “my dad’s a corporate liability — Microsoft says so”.

And Microsoft would know. After all, this is the company that decided Vista was ready to ship. That’s judgment. Be proud, kid.

Having a few months ago offered Yahoo fully twice what the market at the time thought the company was worth and been told to jump, the Redmondian giant appeared momentarily to recover its senses and decide that the whole thing was more trouble than it was worth. I could have told them that for a very small consultant’s fee.

Microsoft walked away from the table, much to Yahoo’s chagrin. But no amount of “hey, we were bluffing” could lure Ballmer’s boys back.

That was followed by Carl Icahn, the corporate raider who simply won’t be told that he cahn’t. Icahn declared that Yahoo’s board and management should be sacked and a new team brought in to ensure a smooth transition to Microsoft’s ownership. Conveniently, he’d already picked just such a team.

If Microsoft and/or Yahoo would care to cut me a cheque for a small consultant’s fee I’ll be happy to tell them what I reckon of that idea, too. Just fly me over for a meeting – my preferred airline is TWA.

Yahoo has attempted to fend off Icahn by inking a deal that sees Google ads piggy-backed on Yahoo’s network. The board has clearly decided that the way to maximise shareholder value is to give its chief competitor a large pile of money and access to its customers, while also inviting the scrutiny of government regulators.

Two thumbs up for that idea. (Hey, you don’t pay me, you get the cheap advice.)

For whatever else you can say about Microsoft, one thing is clear: it recognises weakness in its enemies. Over decades of predatory behaviour it has learned to spot an opportunity to strike against its competition the way a lioness can pick the weakest zebra from the pack.

And Yahoo is looking at the moment like a very weak zebra.

It seems like not very long ago that Yahoo was a big company that had done some neat things a while ago and then kind of stagnated in the innovation department. That happens to lots of companies and it’s nothing to be ashamed of — a bit of a refresh can do wonders to restore vitality.

Microsoft’s aggressive bid for Yahoo, rather than acting as a wake-up call, seems to have startled it into making a series of poor decisions and poorer public statements. Like when you surprise a sleeping kitten and it runs straight into the wall. That never gets old.

One can’t help but wonder if Microsoft’s statement of renewed interest isn’t so much about an overture to resumed negotiations as it is a way to keep Icahn in the news, keep Yahoo unsettled and off balance, and force more ill-advised actions that will further erode Yahoo’s standing until it eventually topples of its own accord, assets to be picked up cheaply.

Didn’t anyone ever tell Steve Ballmer not to play with his food?

Those wishing to protest the author’s treatment of kittens and zebras should write to mjcp@optusnet.com.au

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