Speaking as a Yahoo! shareholder

I have been mute on this story since it came out, but I wanted to pen some thoughts about the whole Microsoft/Yahoo! debacle.

First the disclosures, I am a Yahoo! shareholder (have been for a while), I am also a Google shareholder (have been for a while too) and was a Microsoft shareholder too (wasn’t performing, dumped it).

I am not sure what Yahoo! was thinking by walking away from the deal, by all accounts it was a good financial deal for the shareholders who were being offered a premium for their (languishing) Yahoo! stock. I can understand that Jerry Yang would be emotionally attached to his company and worried about what the future would look like under Microsoft. After all I did co-found a company and put 4 years of work into it. I am also fully aware that you need to look dispassionately at the options being laid out in front of you and do what is best for the shareholders, who ultimately are the true owners of the company.

But at the end of the day I think that Jerry Yang has let his emotions guide his thinking on this. The clearest indication is that he and the board have not offered any convincing alternative plans aside from the claim that the company is worth more than the offer on the table (never mind the stock price.)

The truth is that Yahoo! is a languishing property. Sure it has lots of traffic and some great properties (Yahoo! mail and Flickr are two great instances) but it has turned into a hodge-podge of offerings without a clear focus. We have known that for a while, so this should not be news to anyone (“peanut butter memo” anyone?)

Microsoft likewise has had a spotty record when it comes to internet offerings, and I suspect the hope was to merge the best of the two entities and produce an entity that could convincingly compete against you-know-who.

So I am glad that Carl Icahn has stepped up and is trying to force the issue.


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