Microsoft's ditching of Yahoo ‘a cunning plan’

The strokers of beards and ponderers of business are starting to think that walking away from the negotiating table is just another smart move in Microsoft’s strategy to take over the company.

The shy and retiring Microsoft CEO Steve Ballmer seemed to offer Yahoo more money and then called off the deal claiming it could build a bigger online advertising and services business by itself.

However, according to the LA Times, this does not mean that the deal is off. Indeed it is more likely that Microsoft will watch what Yahoo’s share price does over the next few weeks as investors suddenly realise what a lemon they have been stuck with.

Without Microsoft, Yahoo is starting to look quite shaky and its share price is expected to fall dramatically. This means that the Yahoo board’s certainty that the company can get much more cash than the $33 per share that Microsoft was offering is going to look silly.

When the share price falls below $20 a share then Wall Street expects Ballmer to be back with his cheque book having saved his company $13 a share on the deal. It also means that the board will have to swallow its pride and take what it can get before shareholders start demanding their heads on a plate.

The board will have to find a way of explaining why it lost its shareholders a lot of cash by not going through with the deal.

The only thing standing in the way of such a cunning plan is Yahoo outsourcing some of its advertising to Google. However it is likely that such deals might fall foul of anti-trust rules and Microsoft will be the key complainer to the courts.